Has anyone set up a way to record 3rd party sick pay without having to send reports to quickbooks? I do most all my filings outside of quickbooks.

You can manually record third-party sick pay in QuickBooks Online Payroll (QBO Payroll) by creating a journal entry, bethak.

Since you’re filing taxes outside of QBO, you'll simply need to record the proper wages and tax liabilities related to third-party sick pay.
 

When creating a journal entry, I recommend consulting with your accountant for guidance. They can ensure it is accurate and complies with accounting rules to avoid errors in your tax reporting.
 

Let us know in the comments below if you have additional questions. We're here to help.

I'm not sure yet. The situation (and why I had to do it outside of QB) was I had 2 employees who were both paid through a Short Term Disability policy.  The company paid them, withheld the employee's tax, reported them under their name and their EIN and will prepare a W2 at year end under their EIN.

I still have to report it as well and pay the employer's portion of FICA but because they will get a W2 from the insurance company I don't want it to reflect in my system so that they get hit twice with it.

This is going to be a big concern as the State of MN has made it mandatory beginning 1/1/26 that all employers with one or more employees has to have personal leave insurance in place and it would be like third party sick pay if and when utilized by an employee. This will impact 941 forms, W2s, etc. which will all need to be done manually if Quickbooks is unable to incorporate tracking and recording third party sick pay.