01-03-2011 05:36 AM
It seems that in order to calculate the first payroll of 2011 correctly the 1QTTU must be installed so that the Employee Soc Sec rate is 4.2%. This means in many cases TTU will have to be installed before W-2s are done. But, 2010 W-2s will be incorrect if the rate is 4.2% when processed. Is the best practice to (1) install the 1QTTU now; (2) manually change the Employee FICA rate to 6.2% when printing W-2s; (3) change the rate back to 4.2% after W-2s are printed?
01-03-2011 11:03 AM
I tested this on a customer who had an employee who went over the FICA limit. I previewed the W2 before and after the percentage change and the W2 looked the same. (Wages were the same, withheld was the same.)
I know what Sage says, but FWIW - doesn't look like it effects the W2 printing.
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01-03-2011 06:34 PM
According to Regina Gutcher, MAS Customer Support Payroll specialist, the recommended procedure if you need to run a 2011 payroll before printing 2010 W-2s is:
1. Back up all Payroll data.
2. Create a new company code in Company Maintenance. Copy Company to copy P/R, C/I and G/L (and Job Cost, if integrated).
3.. Run year-end for the original company.
4. Install the updated 2011 tax tables.
5.. Process payroll for the original company for the current year.
6.. Before printing the W-2s, install last year’s tax tables(2010) and access the Copy Company.
7. Reinstall the updated tax tables when finished.
Keep in mind that FICA is not the only limit we need to be concerned about when printing W-2s. For some states, the limits for State Disability or State Unemployment may also need to be printed on the W-2. This method ensures the correct tables are being used for the correct year's activities.
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01-03-2011 08:51 PM
Thanks for your response.
I tested printing 2010 W2s after the 2011 tax table was installed and the Employee FICA rate was 4.2%.
It looked like the W-2s were correct. I am guessing the amounts are pulled form the P/R Tax Summary files.
What is confusing is that in the past where tax tables were updated before W-2s were printed, a change in the Soc Sec Wage Base caused the W-2s to be incorrect. So, I thought that a similar result would occur with the rate change, even thought the 2011 wage base did not change. But, as you said, the W-2s seem to be correct.
So, if the tax rate changes, which may be a historical first, W2s are okay; but, if the wage base changes, which has happened since State of the Art times, the W2s are wrong.