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The reporting of third-party sick pay recaps to the Social Security Administration (SSA) ends after tax year 2013. Beginning with tax year 2014 (processing year 2015) taxpayers will file Form 8922 with the IRS. For tax year 2014 a paper Form 8922 is required. The purpose of filing Form 8922 is to reconcile employment tax returns (for example, Form 941) with Forms W-2 when third-party sick pay is paid by a party other than the employer and when the liability for Federal Insurance Contributions Act (FICA) taxes is split between the third party and the employer for which services are normally performed. 

This form replaces the Third- Party Sick Pay Recaps that were filed on Form W-2 and Form W-3 with SSA. Other reporting requirements for third party sick pay remain unchanged. Third parties or employers are still required to report sick pay paid to individual employees on Forms W-2 and to report the wages, Federal Insurance Contributions Act (FICA) taxes and income tax withholding on employment tax returns.

Who Files Form 8922

  • If the employer is reporting the third-party sick pay to its employees on Form W-2, the third party (insurer/agent) files Form 8922 with respect to the sick pay
  • If the third party is reporting the third party sick pay paid to the employer’s employees on Form W-2, the employer should file Form 8922 reporting the sick pay.

There are boxes on Form 8922 to indicate whether the filer is an employer or an insurer/agent. If the Employer box is checked, the employer must provide the name and EIN of the third party (insurer or agent). If the employer has contracts with more than one third party, the employer must file a separate Form 8922 for the wages and taxes related to each third party. 

However, if the Insurer/Agent box is checked, the third party (insurer or agent) has three options in satisfying its obligation to file Form 8922:

  1. The third party may provide one Form 8922 including total third-party sick pay paid on behalf of all employers without providing names and EINs of any employer; or
  2. The third party may, but is not required to, provide the name and EIN of the employer on separate Forms 8922 for each employer with the sick pay wages and associated taxes; or
  3. The third party may provide names and EINs for some employers and file separate Forms 8922 for each employer with respect to which it is providing names and EINs, and then file one other Form 8922 including the total third-party sick pay paid on behalf of all other employers for which it is not providing names and EINs.

Form 8922 for 2014 sick pay must be filed by March 2, 2015.

Source: Internal Revenue Service