No. The the payroll tax cut was extended to the end of 2012. The rate remains at 4.2% for employees until the end of the year. See: IRS Bulletin

tags: faq140

Social Security (FICA-SS) and Medicare (FICA-MC) will be displayed as ZEROS on the Tax Deposit and 941 reports if you have not yet updated your tax formulas for the New Year. See: Update Tax Formulas

tags: faq096

You may compare the amount withheld in Procare to the IRS Publication 15 - Circular E.

1. Confirm you have current tax tables installed at the Payroll Formulas screen and the right number of pay periods (weekly, every 2 weeks, etc.) at the Region Options screen.
2. Verify the proper withholdings are assigned to each person on the Employee Withholdings screen, including any Variables like filing status (single, married), allowance claimed, and any additional amount to withhold.
3. Do a sample Paycheck Calculation and write down the amount of Gross Pay and withholdings for Federal Income Tax.
4. Compare the amount calculated in Procare to IRS Publication 15 - Circular E. There may be slight differences, since computer calculations are based on an "annualized" amount, but they should be very close.

See the full article on how to Verify Taxes Withheld for more detail, including screen shots.

tags: faq097

A pretax withholding, sometimes referred to as pre-taxed or tax exempt, means the amount is deducted from gross pay prior to taxes being calculated. The amount withheld is not taxed.

Important! Be sure to check with your tax adviser before marking a withholding as exempt.

1. From the Procare Home screen click Configuration > System > Accounting Management > Payroll > dbl-click Payroll Formulas.
2. At the Payroll Formulas screen select the Category "General" from the list (upper left).



3. Click once on the formula you want to mark as exempt, just to select it.
4. Click the Exempt From button (lower left).



5. Check off any items from which it is exempt, then click Save > Exit.
   

Example:
If your retirement plan is exempt from Federal Income Tax and a person earns 1,000 in gross pay with 100 withheld for retirement; their taxable income would be 900.

tags: FrmWithholdingExemptFrom, faq098, exemption, exemptions

To print the remaining balance of vacation, sick time, etc. that is available you must place a check mark in the Check Stub column of the Benefit Codes screen. Some benefits like paid holidays, etc. typically do not have a balance remaining that a person can use in the future so those would be left unchecked.

From the Procare Home screen go to Configuration > System > Accounting Management > Employee Data > dbl-click Benefit Codes.

tags: faq099

The federal form W-4 is where employees determine the number of allowances to claim for tax purposes. Some employees may claim they are "exempt" from withholdings. Their earnings are still taxable, but they want nothing withheld. In Procare you simply do not assign the Federal Income Tax withholding to them.

Go to the Employee Withholdings screen:

1. Confirm Federal Income Tax (and possibly State Income Tax) is not assigned to them.
2. If it is assigned, click once on the line to select it and use the Delete button to remove the withholding.

Important! Do not check the "exclude" box. Excluding a tax affects taxable earnings (and the W2).

tags: FrmWithholdingExemptFrom, faq150, w4, exemption, exemptions

If you mistakenly withheld an amount from a paycheck and that withholding was marked as tax exempt it affects the taxes deducted from the check and your employer share of taxes for Social Security, Medicare, FUTA and SUTA (if it was marked as exempt from any of those items).

We'll assume the check has already been cashed. You'll void the check in Procare then repost it so the amount withheld is no longer treated as tax exempt (steps below). You won't actually give them a new check - this is just for calculation purposes. Finally, you'll adjust the taxes on their next check to account for the difference.

To correct the issue:

1. Void the Original Check. You'll probably want the Void Date to match the original Print Date. See: How Voids Affect Financial Reports
2. Do you need to change the exempt status of the withholding?
   1. If you intended to withhold the money, but the withholding should not have been marked as exempt go to Payroll Formulas and remove the "Is Exempt" check marks as needed.
   2. If the withholding was correctly marked as exempt, but you did not intend to withhold anything from a particular employee then Delete the withholding from their Employee Withholdings screen.
3. Calculate the Paycheck a second time, but do not post it yet.
   1. Go to the Withholdings tab and make a note of the correct amounts that should've been withheld for everything.
   2. Then type over the withholdings with the amounts you really withheld.

   Note: If there is no place to put the amount (example: withheld for retirement plan, but person does not participate in the plan) then add it into the Federal Income Tax box. You'll adjust it on their next check.

   3. On the Summary tab confirm the Check Amount is the same as before.
   4. Post the check using the original Post Date and Print Date.
4. On their next check manually adjust the taxes to make up the difference.
5. You may need to manually adjust your next tax deposit, if the deposit was paid prior to making the correction.

tags: FrmWithholdingExemptFrom, faq100

Check the Exclude box on the Employee Withholdings screen in the following situations ONLY:

1. To temporarily turn off General Withholdings you create such as employee child care, etc. The withholding will be skipped for any paychecks issued to this person until you return and uncheck the box.

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Warning! If you "exclude" a federal or state withholding (income tax, Social Security, Medicare) the taxable earnings (and W2) will be affected. The person's gross pay will not count toward taxable earnings for either employer or employee paid taxes. In other words, neither party will pay tax on those earnings. This is almost ALWAYS WRONG.

See: How to handle employees who claim "exempt" on form W-4.

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2. To permanently exclude a withholding. Used when neither the employee nor employer pay any amount for that person. For example, certain religious workers might not have Social Security or Medicare withheld. Be sure to assign the withholding to them and mark it to Exclude. Again, this affects taxable earnings and the W2.

tags: faq151, KB0310

If you marked "exclude"  to prevent taxes from being withheld, the taxable earnings (and W2) will be affected. When a person is excluded it means neither the employee nor employer are required to pay taxes on that amount. If you mistakenly did this for federal or state income tax, Social Security or Medicare, you'll need to make a correction as follows:

We'll assume the check has already been cashed. You'll void the check in Procare and then repost it so the earnings are correctly treated as being taxable. You won't actually give them a new check - this is just for calculation purposes. You may need to adjust the taxes on their next check to account for the difference.

To correct the issue:

1. Void the Original Check. You'll probably want the Void Date to match the original Print Date. See: How Voids Affect Financial Reports
2. Remove the check mark from the "Exclude" box on their Employee Withholdings screen. Or, if the person claims they are exempt from federal or state income tax withholdings, delete that withholding from them entirely, which will still count the earnings as taxable.
3. Calculate the Paycheck a second time, but do not post it yet.
   1. Go to the Withholdings tab and type over the withholdings with the amounts you actually withheld (if different).
   2. On the Summary tab confirm the Check Amount is the same as before.
   3. Post the check using the original Post Date and Print Date.
4. On their next check, any differences to Social Security should be adjusted automatically (version 10.2.4393 or higher). Manually type over any other withholding amounts (as needed) to make up for under withholding on the original check.
5. You may need to manually adjust your next tax deposit, if the deposit was paid prior to making the correction.

tags: FrmWithholdingExemptFrom, faq149

The amount to withhold is based on the number of days in the pay period. Since the number of days in each Custom Pay Period may vary, it would be normal for taxes to fluctuate somewhat even when the taxable gross pay is the same.

Custom Pay Periods: Tax Example

Pay Period	Days	Periods per Year	Annual Earnings	Tax this Check
Jan 1 - Jan 15	15	365 ÷ 15 = 24	24 x Taxable Gross this Check	Annual Tax ÷ 24
Jan 16 - Jan 31	16	365 ÷ 16 = 23	23 x Taxable Gross this Check	Annual Tax ÷ 23

tags: faq101, FrmCustomPayPeriods, withholdings, taxes, amount to withhold

The Advanced Earned Income Tax Credit, known as AEITC, EITC, or just EIC expired at the end of December 2010. Although workers who qualify may still claim the credit on their personal tax returns it is no longer advanced to them on individual paychecks. If people previously had EIC assigned to them as a Credit in the Payroll module, the amount added to their checks should now be zero.

See: IRS Information on the Earned Income Credit

You'll need to manually edit the FUTA settings in the Region Options screen. When running reports for the 1st half of the year you'll want to temporarily change back to the old rate. See article: FUTA & SUTA Rates

tags: faq103

According to IRS Notice 1036 if you withhold the employee's share of Social Security at the old, higher rate of 6.2% early in 2011, you should make an offsetting adjustment on a future paycheck(s) so the proper overall amount has been withheld. Any adjustments should be made as soon as possible, but no later than March 31, 2011.

To do so in Procare:

1. Print the following report(s) for the year to date (Jan 1st until now).
   1. For version 10 (v10): Reports > Standard Reports > Payroll > Employee Summary > Employee Earning / Withholding Summary.
   2. For version 9.1 (Earnings):  Reports > General Reports > Payroll > G - Earning Summary > Earning Summary.
   3. And version 9.1 (withholdings): Reports > General Reports > Payroll > H - Withholdings Summary > Simple Withholdings Summary.
2. For each employee multiply their Social Security Earnings (shown as FICA-SS) by .042. That will be the amount you should have withheld.
3. Find the actual amount withheld for Social Security. For v10 this is on the same report. Version 9.1 shows this on a separate report.
4. Subtract the amount you should have withheld (step 2) from the actual amount withheld (step 3). This is the amount you'll need to adjust on their next check.
5. The next time you calculate paychecks manually adjust the amount withheld for Social Security. Presumably you'll need to withhold less than usual to account for overwithholding earlier in the year.
6. To double check yourself run the same reports again (after you've made the paycheck adjustments). Your manual calculation of .042 times the Social Security Earnings should match the actual amount withheld so far this year.

Note: It's okay if there is a difference of a few cents.

tags: faq104