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If Non-Taxable

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  • Go to Core/Adjustments

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  • , click Create

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    • Enter the employee name or ID

    • Choose the payroll item from the drop down -Federal Tax 001

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    • Choose the type = Third Party Pay

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    • Enter a transaction date within the current posting period

    • Enter in the amount

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    • of the non

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    • taxable third party pay

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    • A description can be added (optional)

    • Click

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    • Save

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Info

This will cause the amount to print in box 12 with code J.

If Taxable

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  • Go to Core/Adjustments

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  • , click Create

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    • Employee

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    • = Locate the employee by

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    • name or id

    • Payroll Item = Federal Tax, Ohio State Tax, and OSDI (if applicable)

    • Type = Total Gross

    • Transaction Date

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    • = Enter

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    • a date within the current posting period

    • Amount

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    • = Enter

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    • the amount

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    • of third party

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    • payment

    • Description = Can be added if desired

    • Click Save

  • Go to Core/Adjustments

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  • , click Create

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    • Employee

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    • = Locate the employee by

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    • name or id

    • Payroll Item = Federal Tax, Ohio State Tax, and OSDI (if applicable)

    • Type = Applicable Gross

    • Transaction Date

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    • = Enter

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    • a date within the current posting period

    • Amount

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    • = Enter

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    • the amount

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    • of third party

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Medicare 

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    • payment

    • Description = Can be added if desired

    • Click Save

On the Medicare record, increase the total Medicare tax by any amounts the company withheld from the benefit

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  • Go to Core/Adjustments

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  • , click Create

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    • Employee

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    • = Locate the employee by

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Payroll Item -Choose Medicare Tax 6XX

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    • name or id

    • Payroll Item = Medicare

    • Type = Amount Withheld

    • Transaction Date

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    • = Enter

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    • a date within the current posting period

    • Amount

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    • = Enter

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    • the Medicare amount withheld

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Description - Enter in a description (optional)

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Click 'Save'

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    • Description = Can be added if desired

    • Click Save

The district will need to pay any board amount that is due for it to show properly on the W2

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.

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  • Go to Core/Adjustments

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  • , click Create

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    • Employee

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    • = Locate the employee by

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    • name or id

    • Payroll Item = Medicare

    • Type = Board's Amount of payroll item

    • Transaction Date = Enter a date within the current posting period

    • Amount = Enter the Medicare amount withheld

    • Description = Can be added if desired

    • Click Save 

Contact any city involved for the employee, ask if the amount is city taxable.

  • If yes,

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  • increase the total and

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  • applicable gross amounts on the corresponding city record as follows:

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  • Go to

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  • Core>Adjustments, click Create

    • Employee - Find employee by typing in a few characters of first or last name

    • Payroll Item - Choose City Tax Code XXX

    • Type -

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    • Total Gross

    • Transaction Date - Enter or choose date from calendar

    • Amount - Enter in the amount to increase the total gross by

    • Description - Enter in a description (optional)

    • Click 'Save'

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  • Go to

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  • Core>Adjustments, click Create

    • Employee - Find employee by typing in a few characters of first or last name

    • Payroll Item - Choose City Tax Code XXX

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    • Type -

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    • Applicable

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    • Gross

    • Transaction Date - Enter or choose date from calendar

    • Amount - Enter in the amount to increase the applicable gross by

    • Description - Enter in a description (optional)

    • Click 'Save'

Tip

If desired, calculate the tax amount due on the payment and enter that figure as an error adjustment on the City Payroll Item for a remaining payroll; otherwise the employee will have to pay the tax later.

Warning

There is a special field on the 941 for adjustments needed due to Third Party sick payments and how they relate to Medicare withholdings. The district should reference the 941 instructions as well as the information in IRS Publication 15-A on these payments as needed.

Warning

If the notice from the company indicates FICA tax was withheld, the district will need to contact the agency as it is our understanding most school district employees should not have FICA tax withheld from this payment. The agency will need to correct this and issue a new statement as the employee can not recover the incorrect withholding on a tax return, tax returns are for federal income tax, not federal FICA or Medicare.

Revised: 12-Nov-2018

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