Earlier this week, I received the first of a series of calls from clients who had no applied the update before running payrolls in 2013. So FICA/S was withheld at 4.2% instead of the new (old) rate of 6.2%. Looking for an elegant solution (involving the least amount of work), I went looking for other opinions and found the following community conversation...
Quite a few different approaches are tossed out there by a variety of well-qualified contributors :) But, I have found the following process (gleaned from the discussion) to work best for most situations.
- Determine the amount of social security to be added to each employee
- Transactions>>Payroll>>Manual Checks
- Enter a Beginning Balance type transaction for each employee, taking care to make sure all dates are in the appropriate month
- Click Transactions
- Enter a FICA Social Security transaction type (for employee underwithholding)
- Enter the additional tax amount to be added to their FICA social security
- Leave taxable wages as zero, since the wages were already counted towards FICA wages
- If you wanted to, you could then record a second transaction for each employee on the same manual check
- Federal Tax transaction type
- Enter a NEGATIVE tax amount equal to the FICA/S adjustment entered above
- Leave taxable wages was zero, since the wages were already counted towards Federal wages
- This would effectively move a portion of their Fed withholding to FICA/S so there would not be an additional cost to the employer and/or no need to collect additional from the employee
Feel free to share your questions and comments :)
Christina Phillips is a Microsoft Certified Trainer and Dynamics GP Certified Professional. She is a supervising consultant with BKD Technologies, providing training, support, and project management services to new and existing Microsoft Dynamics customers. This blog represents her views only, not those of her employer.