How do I set up third party pay for Federal Withholding, Medicare, and Social Security?

Third party pay codes

Important! The 2019.08 release will update the third party Federal Withholding pay code type to meet federal reporting requirements for third party pay. This update impacts the following pay code types: Third Party Federal Withholding, Third Party Medicare; and Third Party Social Security.

When you set up a third party pay code that uses a third party pay code type, Connect will show the third party federal tax withheld in the W-2 employee record (Government Reporting) when you convert year-end tax information.

Third Party Federal Tax Withheld in W-2 Employees (Government Reporting))

Watch a video

2019.08 or later includes new pay code types for third party Social Security, third party Medicare, and third party Federal Withholding. You can set the maximum limit and maximum wage limit on third party pay codes. Watch a video (02m05s).

Abbreviations for third-party pay codes

3F, Third-party Federal Withholding

3S, Third-party Social Security

3M, Third-party Medicare

Locations to view the Third Party Federal Withholding Tax

You can find the Third Party Federal Withholding Tax in the following places.

Convert Year-end Tax Report

This report prints when you run the Convert Year-end Tax Information routine.

W-2 Box 2

The Third Party Federal Withholding Tax prints on Form W-2 in Box 2.

W-2 Box 14

The Third Party Federal Withholding Tax prints on Form W-2 in Box 14.

Electronic W-2 RT

The Third Party Federal Withholding Tax is saved in RT Record/Income Tax Withhold by Third Party Payer/325-339.

2019.08, 2019May15