Courtesy of a fabulous webinar by Microsoft and Terry Heley, here is the bottom line scoop on many of the questions that have been flying around with the change in the FICA rates:
Q. What do I do if I already applied the 2011 tax tables BEFORE I built the year end wage file?
A. Easy fix. Manually edit the FICA/Social Security tax table (Tools>>Setup>>System>>Payroll Tax) to set the rate back to 6.2. Build the year end wage file (Tools>>Routines>>Payroll). Then set the rate back to 4.2% (the new rate for 2011)
Q. Following the method above, can I rebuild the year end wage file even if I have processed payrolls in 2011?
A. Yes, yes you can! Just make sure to change the FICA/Social Security rate in the tax tables before, and then reset it after.
Q. Can I print my 941 for 2010 even if I have applied the tax tables for 2011?
A. Yes, prior to the release of the update from Microsoft (scheduled for 1/24), you can simply change the tax tables as noted above and set your user date back to 2010 to print the 941. Once the update has been released, the report will be date sensitive so you can print it for either 2010 or 2011 (based on your user date) without changing the tax tables.
Q. What manual adjustments do I need to make prior to the release of the update from Microsoft?
A. You only need to consider (2) things. First, that you adjust your tax deposit to the government to include an additional 2%. Second, you need to adjust the FICA employer expense and liability in the General Ledger for the same amount (for more information on this, refer to Mike Lupro's excellent post on this topic).
Good luck in finishing up your year end!
Take care,
Christina
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