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I DESPERATELY NEED AN ANSWER! How to manually record EmployEE Portion of FICA Taxes Beginning Balance Adjustment

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Posted on by PattiK323 235

updated 1-14-23  Terry has been radio silent for several days. I'm desperate for an answer. I need to get these corrections made so that I can run year-end payroll reports AND financials for the auditors, who will be here Monday morning, January 15th!  I also need everything corrected before I can run W-2's!  Please! Anyone?!  Thank you in advance!

1. Employee has excess HSA contribution for 2022.

2. Excess contribution needs to be reported as taxable income in 2022, [Employee will also be withdrawing excess, plus income, from their HSA account, as per CPA guidance]

3. We, as the employer, need to cover both the employEE and employER portion of FICA and Medicare.

4. How do I record this in GP so that the employee's 2022 W-2 is reflected correctly-the taxable wage AND the related employEE FICA taxes, which we, as the employER are paying, since there aren't any funds to deduct this from? This is a "books-only" transaction. 

I tried (in our test system) doing a Manual Checks transaction and selecting Beginning Balance.  

a. I entered Transaction Type FICA Soc Sec Tax (the employee has reached the Medicare max) with Taxable Wage $1,000 and EFIC Amount $124.00. But, this records everything to Employer Taxes.  I need to record the EMPLOYEE portion, as well. If I enter $62.00 for EFIC, this appears to correctly report the taxable wages for the employee, as well as the employER portion of the FICA taxes; but, it does not record the employEE portion. NOTE:  I realize that I tested this incorrectly. I should have used FICA  Medicare Tax, as it is the FICA Soc Sec Tax that the employee has met the maximum for, not vice versa.  However, the logic and the result, and underlying issue are the same-employEE portion of taxes are not recording. 

Thank you for your help!

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Microsoft Dynamics GP
  • PattiK323 Profile Picture
    PattiK323 235 on at
    RE: I DESPERATELY NEED AN ANSWER! How to manually record EmployEE Portion of FICA Taxes Beginning Balance Adjustment

    Thanks, Terry. I had submitted a support ticket and got the help that I needed.

  • Suggested answer
    Terry R Heley Profile Picture
    Terry R Heley Microsoft Employee on at
    RE: I DESPERATELY NEED AN ANSWER! How to manually record EmployEE Portion of FICA Taxes Beginning Balance Adjustment

    Hi Patti, sorry you are having so many issues with this, if ever you need immediate help from support you can always log a case as we just periodically watch the forums in our community area.

    Here is the link to create a case.

    And last if you want to talk to the most technical folks you can find that are passionate to help you with your Dynamics GP issue, create a case with technical support! support.serviceshub.microsoft.com/supportforbusiness

    As you read the blog about manual checks, it is manual check, meaning if you want gross to update you need to do a trx for it.  If you want to update federal wage too, again another trx for the federal wage option

    community.dynamics.com/.../how-to-process-a-manual-check-in-payroll

    So more trx will need to be entered if you want those fields to update as well.

    Manual checks are just adjustments to update the numbers to how you want them, it does not matter that it creates a negative check as we are doing one sided transaction to update numbers, thus we do not put this in a batch either.

    Thanks

    Terry Heley

    Microsoft

  • PattiK323 Profile Picture
    PattiK323 235 on at
    RE: How to manually record EmployEE Portion of FICA Taxes Beginning Balance Adjustment

    Terry-

    I refer to the blog article often!  I even have it printed out and saved in the procedures book!

    If I do a manual check as you note above, FICA Medicare Wages and FICA Medicare Tax Withheld are updated appropriately; but, this results in a negative check amount. I updated the distribution to record to an expense account, rather than against cash/checking; but, this still  reduced Net Wages by the amount of the Employee Medicare expense.   Gross Wages and Federal Wages were also not increased by the Taxable Wage Amount (the amount of the excess contribution), as they should have been.

    I tried a Beginning Balance Adjustment, too; but, got the same result.

    In addition to the employer and employee portions of taxes being recorded correctly, I also need Gross and Federal Wages to be increased for the Taxable Wage Amount. Net Wages should increase by this amount, too, since there is no check being cut.  Net Wages paid to the employee remain unchanged: we, the employer, are recording the increase in taxable wages for 941 and W-2 purposes and paying both the employer and employee portions of the Medicare and-if applicable-FICA tax.

    How do I make this happen?

    Thank you!

  • Terry R Heley Profile Picture
    Terry R Heley Microsoft Employee on at
    RE: How to manually record EmployEE Portion of FICA Taxes Beginning Balance Adjustment

    Hi Patti,

    Here is a blog on manual checks which links to our payroll manual check documentation if that helps

    community.dynamics.com/.../how-to-process-a-manual-check-in-payroll

    You are right FICA SS and FICA MED are the same.

    I would choose an employee

    Go to Cards | Payroll | Summary change the month to December so we see YTD values and do a screenshot

    Then enter a manual check for FICA SS as an example.
    The amount field below is the employee withheld that you want to adjust by
    The Taxable wage is that and the EFIC is the Employer amount to adjust by, whatever you populate will change by that.
    Save the trx and post it

    Now go back to Cards | Payroll | Summary and you should notice the employee change if you changed the taxable wage or amount field.
    To see employer type information it is stored in the UPR30100 table and also the Edit Liabilities window UPR30200 table under Routines.
    Look for Audit trail code UPRMC and the date you posted.

    Screenshot-2023_2D00_01_2D00_05-184903.JPG

    Thanks

    Terry Heley
    Microsoft

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