[PR] Reporting 3rd-Party Sick Pay on W-2s

Objective

Ensure that 3rd-Party Sick Pay is properly displayed and reported on employee W-2 forms and the employer’s W-3 submission in Vista Payroll.

Step 1: Set the 3rd Party Sick Pay Indicator for the Employer

1. Navigate to: PR – Payroll – W-2 Process
2. Go to the Info tab.
3. Check the box labeled “Third Party Sick Pay Indicator.”
4. This alerts the IRS that your W-2 file includes employees who received 3rd-Party Sick Pay.
5. Save your changes.

This step flags the entire employer submission as containing 3rd-Party Sick Pay information.

Step 2: Flag Employees Who Received 3rd-Party Sick Pay

1. Still in the W-2 Process screen, go to the Employees tab.
2. Locate each employee who received 3rd-Party Sick Pay.
3. Check the box under the “Third Party Sick Pay” column for those employees.
4. This tells the IRS that this specific employee’s W-2 includes 3rd-Party Sick Pay.
5. Save your changes.

This ensures that the W-2s for these employees include the proper indicator.

Step 3: Report 3rd-Party Sick Pay Amounts on the W-3

1. Go to the menu: File > Launch Aatrix Print and eFile.

2. Proceed through the Aatrix W-2 setup process until you reach the W-3 Information page.

3. In the section for 3rd-Party Sick Pay, enter the total amount of 3rd-Party Sick Pay paid to all employees.

4. This helps the IRS reconcile FICA deductions and liabilities that may not match due to the 3rd-Party Sick Pay.

This step ensures accurate employer-level reporting on the W-3 form.

Step 4: Verify and Submit

1. Review all employee W-2s and confirm that:
2. The 3rd-Party Sick Pay box is checked for applicable employees.

3. The employer-level indicator is marked on the Info tab.

4. Review the W-3 totals in Aatrix to confirm:

5. The 3rd-Party Sick Pay total is reported correctly.

6. Once verified, submit or print/e-file the W-2s and W-3 through Aatrix.

Step 5: Documentation & Audit

• Keep a record of:
• Which employees received 3rd-Party Sick Pay.
• Corresponding 3rd-Party provider reports.
• Screenshots or confirmation pages from the W-2/W-3 submission.
• Good documentation ensures compliance and simplifies future audits or corrections.