Time Tracking and Job Cost Modules

[ebjelovs]

Everyone-

Below are the FAQs for Sage ERP MAS 90 and 200 Year End for Payroll, Electronic Reporting and Accounts Payable.  As noted in the FAQs, Sage plans to post the year end IRD and TTU on Sage Online on December 20.  There are two important things to note.

First, for all US residents, there is still debate in the US Congress regarding potential extension of payroll tax cuts.Below is the latest info on this topic as reported by CNN.

"In two weeks, the payroll tax cut that has saved workers an average of $1,000 this year will expire -- unless lawmakers in the next few days do what both parties swear they want to do and extend it. This being Congress, however, there is no longer any such thing as simple. Both parties agree on extending the cut, but they're still at loggerheads over how to pay for it and still disagree as well over other measures that should be in the bill. That means the Senate could be in session this weekend duking it out, and the House will have to return next week from its Christmas break to vote on what the Senate produces. The likelihood is still high that a payroll tax cut extension will be approved."

If the extension is approved, Sage will post an updated TTU as soon as possible after the Social Security Administration releases the new information.  Please check the Sage Online Tax Update site regularly for this potential change as well as any late-breaking state tax changes.

Second, for New York employers, on December 7, 2011, the New York State Senate passed a “Middle Class Tax Cut and Job Creation Plan” that will impact compliance for the state of New York.  Changes for this new legislation are NOT included in the December 20, 2011 release of the Q1 2012 Tax Table Update because we are still waiting for the state to officially release the new tax tables.  As mentioned above, check the posting site each week for this change and any other late breaking changes yet to come.  Happy Holidays, everyone!

[thebottomline]

Thanks Erika.

And Happy Holidays to you also.

[mas90guru]

Isn't democracy great?

[theresel]

Thanks much, Erika - and Happy Holidays to you as well!!

[dlanderos]

Erika,

Will the tax table update include the new "recapture" provision, which applies to those employees who receive more than $18,350 in wages during the two-month period that the social security 4.2% rate was extended?  The provision imposes an additional federal income tax on these higher-income employees equal to 2% of the wages they receive in January and February in excess of $18,350.

[ebjelovs]

dlanderos,

Sorry for the delay in responding, I had some vacation time between Christmas and New Year's and managed to come down with a nasty cold that kept me sidelined most of this week.  In response to your question, we checked  the IRS site here:  http://www.irs.gov/newsroom/article/0,,id=251650,00.html?portlet=108  and found the following info.  Since this extra tax will be collected when the employee files his or her income taxes in 2013 (for tax year 2012), there is nothing for Sage to do to at present to accomodate this change. But thanks for asking the question so we got clarity!  Also, pay special attention to what I highlighted in red below.  There may be more changes to come from Congress, so we all need to stay tuned!

Payroll Tax Cut Temporarily Extended into 2012

IR-2011-124, Dec. 23, 2011 WASHINGTON — Nearly 160 million workers will benefit from the extension of the reduced payroll tax rate that has been in effect for 2011. The Temporary Payroll Tax Cut Continuation Act of 2011 temporarily extends the two percentage point payroll tax cut for employees, continuing the reduction of their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through Feb. 29, 2012. This reduced Social Security withholding will have no effect on employees’ future Social Security benefits. Employers should implement the new payroll tax rate as soon as possible in 2012 but not later than Jan. 31, 2012. For any Social Security tax over-withheld during January, employers should make an offsetting adjustment in workers’ pay as soon as possible but not later than March 31, 2012. Employers and payroll companies will handle the withholding changes, so workers should not need to take any additional action. Under the terms negotiated by Congress, the law also includes a new “recapture” provision, which applies only to those employees who receive more than $18,350 in wages during the two-month period (the Social Security wage base for 2012 is $110,100, and $18,350 represents two months of the full-year amount). This provision imposes an additional income tax on these higher-income employees in an amount equal to 2 percent of the amount of wages they receive during the two-month period in excess of $18,350 (and not greater than $110,100).     This additional recapture tax is an add-on to income tax liability that the employee would otherwise pay for 2012 and is not subject to reduction by credits or deductions. The recapture tax would be payable in 2013 when the employee files his or her income tax return for the 2012 tax year. With the possibility of a full-year extension of the payroll tax cut being discussed for 2012, the IRS will closely monitor the situation in case future legislation changes the recapture provision. The IRS will issue additional guidance as needed to implement th e provisions of this new two-month extension, including revised employment tax forms and instructions and information for employees who may be subject to the new “recapture” provision. For most employers, the quarterly employment tax return for the quarter ending March 31, 2012, is due April 30, 2012.

[jckc_costcutters]

The PR Tax cut has been extented.  However our last payroll on 2-29-12 did not reflect this.  For the first 4 payrolls in 2012, the correct amount  for Social Security was withheld at 4.2%. However the payroll for 2-29-12 withheld 6.2%.  I have the latest PR tax table installed, but I think it is wrong since the 2-29-12 payroll withheld the wrong amount.  How can this be fixed?  Will the correct amount be withheld for the rest of the payrolls for 2012?