Notice 2015-6: Third-party sick pay recap

Notice 2015-6: Third-party sick pay recap

The IRS today released an advance version of Notice 2015-6, concerning Form 8922, Third-Party Sick Pay Recap, and providing guidance on the filing of a third-party sick pay recap.

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Notice 2015-6 [PDF 65 KB] provides that:

  • Form 8922 is used by third parties and employers to report total payments of certain sick pay paid by third parties on or after January 1, 2014.
  • Form 8922 must be used for filing “third-party sick pay recaps” to reconcile the reporting of sick pay paid by a third party, made on behalf of employers to employees in situations when the liability for the Federal Insurance Contributions Act (FICA) taxes on the sick pay is split between the employer and the third party under applicable regulations.
  • Forms 8922 must be filed—instead of Form W-2 and Form W-3 third-party sick pay recaps, filed with the Social Security Administration (SSA) for third-party sick pay paid before January 1, 2014.
  • Employers and third parties will file the Form 8922 with the IRS—rather than the SSA—and will no longer file third-party sick pay recaps with the SSA for payments made on or after January 1, 2014.
  • If a taxpayer (either a third party or an employer) was previously required to file with the SSA, third-party sick pay recaps on Forms W-2 and W-3 for sick pay paid in 2013 and prior years, and if the sick pay is paid under the same factual circumstances, the taxpayer is required to file Form 8922 with the IRS for sick pay paid in 2014 and subsequent years.

Notice 2015-6 sets forth a modified procedure that only affects the filing of the third-party sick pay recaps and does not otherwise affect the current rules for: (1) furnishing statements of the third-party sick pay to individual employees on Form W-2, Wage and Tax Statement; (2) filing with the SSA copies of the Forms W-2 together with Form W-3, Transmittal of Wage and Tax Statements, that are not third-party sick pay recaps; and (3) reporting such payments to the IRS on Form 941, Employer’s QUARTERLY Federal Tax Return (or on Form 944, Employer’s ANNUAL Federal Tax Return, if applicable).

The IRS notice states that the change to using Form 8922 also has no effect on liability for employment taxes (e.g., FICA tax, income tax withholding, FUTA tax).

Notice 2015-6 sets forth rules concerning responsibility for the withholding and payment of employment taxes and for reporting employment taxes and wages with respect to third-party sick pay.

Comments requested

With today’s release, the IRS has requested comments on the appropriate length of time to retain a rule under which third-party filers (insurers or agents) of Form 8922 are not required to complete the boxes for the other party’s name and EIN, including whether third-party filers would need additional transition time prior to being required to complete these boxes if electronic filing of Form 8922 becomes available. Comments are due on or before June 30, 2015.

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