How to Add Third Party Sick Pay (Disability Payments)

During the year and especially at year-end, you may receive notices regarding third party sick pay or disability payments for an employee. As an employer, you will be required to report these short-term or long-term disability payments on the employee's W-2. 

Note: You may also be responsible for reporting and paying the employer Federal income, Federal unemployment (FUTA), state unemployment (SUI/SUTA) tax amounts, as well as matching Social Security and Medicare. Confirm the details in the plan to ensure you are recording and paying correctly. 

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Adding Third Party Sick Pay

You will receive a statement from either the state agency or the third party disability provider with the payment and tax amounts. 

Once you've received the disbursement information from the provider, reach out to Homebase's support team to enter this payroll record manually.

Note: Any requests received after December 15, 2025 will be filed as an amendment to your original tax filings. Homebase charges a $200 fee for amendments.