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Third Party Sick Pay- NJ

looking for any ideas/ advice regarding reporting the third party sick pay to the IRS:
NJ sends out the disability info in Jan for payments paid throughout the prior year. These wages need to be added to the 941 and the employer needs to pay his portion of FICA taxes.
In the past as per an IRS rep we had spoken to, we file the 941 return without the disability and then with 1st Quarter we file an amended 941 and make the payments via EFTPS.
if we included it on the original form that taxes would be late...
the problem with this is every year something doesn't go right and we receive notices from the IRS, we have to call.. .usually everything is straightened out but it's a lot of wasted time like this.
how do others deal with this?
any ideas would be helpful.


  • Any reasonably modern payroll system should easily handle 3rd party sick pay. Just be VERY sure on just what the 3rd party is doing and what the employer still needs to done.

    Just a thought, but if you pay for the benefit (sick pay) with post-tax employee deductions, then the benefit becomes non-taxable and non-reportable. Problem solved.

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