Please provide ACCURATE instructions for reporting sick pay (3rd party payer who also provides W-2)
If the existing KB instructions are used:
1) it requires a calculation be created but fails to provide detailed instruction on creating this calculation.
2) if you get past creating a calculation the employee portion of social security & medicare are included on the payroll record. The 3rd party collects and pays these taxes that are withheld from employee.
3. All payroll calculations are included in the check register 5-1-2-41.
QUESTIONS:
Where is the correct amount of tax liability to be paid in each week's tax liability?
by: vickie s. | over a year ago | Payroll
Comments
Hi Vicky
I just spent some time researching this for CA and here's what I can tell you. When you create the payroll record 5-2-2 to record the 3rd party sick pay payment, you need to select pay type 6-third party at the top. Put the gross wages in the salary box. Then click on the calculations tab, and manually enter the ee deductions for Medicare and Social Security AND the employer calculations as well. You will have to research your own State rules (if not CA) but it is also applicable for employer SUI/ETT. It is NOT applicable for SDI.
When you run the quarterly 941, there is a row that will show the adjustment for 3rd party sick pay.
When you run the DE9 & DE9c for CA, it does not have a special line for the adjustments. If the employee only received 3rd party sick pay for that quarter, then on his row of the DE9c, select R in the drop down at the far right, that shows it is applicable for SUI but not for SDI. This will recalculate the DE9 cover page appropriately.
If said employee received both 3rd party sick pay but also regular pay for a different week but in the same quarter, it appears that we have to manually adjust the DE9c to separate those wages out so that one row is designated as "R" and the regular wages remain the "S".
I have submitted the CA documentation in hopes that Aatrix will revise the DE9c reporting to automatically split wages and apply the appropriate designation in the future. Please see my enhancement request and vote on it.
Char DeLange
Please note: in our current situation, the insurance company did not withhold the FIT or CA State income tax (PIT) and it is optional for the employee to have those deducted so they won't owe them at the end of the year. But the employee will have to fill out a DE 4S to withhold PIT and the Form W-4S for FIT to be withheld and submit them to the employer and insurance co.