Paymasters

[JackieCPA]

I have a client who runs their payroll through a third party service called Paymasters. The W-2s issed to their employees show that the employer is the third party service. Obviously, my client still pays for the payroll and taxes, but even the 941's are under the third party service's name. 

Is this still considered their wages for QBI? I am not finding a straight answer when I research the issue. 

[jklcpa]

The name on the W-2 isn't just an "in care of" is it?  How about the EIN, is that also not your client?

I looked at the Paymaster website and appears that it acts like other outside payroll services plus HR. I didn't see anything to indicate an arrangement like you describe or for something like leased or outsourced employees.

[JackieCPA]

Yeah, the EIN is for paymasters and it doesn't say "in care of". 

It is kind of a weird scenario. I've never heard of anything like this before. 

[Yardley CPA]

As the employer, I would want my name reflected as the one paying the wages to MY employees.  I wouldn't want a third parties name and EIN as the payee.  It does seem strange.  

I wonder if Paymasters pays their own employees under a different corporate name/EIN?

 

 

[Medlin Software, Dennis]

I remember seeing something about leased employees still being allowed to be considered employees of the business doing the leasing.

Sounds like this could be a case of unintentional leasing, unless the third party has some way to actually save money with a lease arrangement.