Thanks for dropping by the Community today, Ramm6.
Let me provide some information on how the payroll service handles third-party sick pay.
The information on the W-2 form depends on the payroll data entered into QuickBooks Desktop (QBDT) Payroll. This also goes to recording the third-party sick pay since it can be set up as taxable and non-taxable.
Aside from that, the tax tracking affects how the payroll item is reported on the tax form. Thus, I recommend consulting with a tax adviser for further assistance. They can guide you on how to handle this type of situation and make sure your W-2 data is correct.
I’m adding some links below for additional resources. These articles provide detailed information on how the payroll service handles third-party sick pay and which box it will show on the mentioned tax form.