We recently gave an employee a bonus, but forgot to check that income paycode was subject to local tax.
How can we now increase the annual local taxable income and withhold the applicable amount? Is there something we can do to correct this in the next payroll run?
I saw lots of help on the GP site for overwithholding, but I did not see anything for underwithholding.
Thanks for any help you can provide.
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Well, we did a little poking around and now know how to adjust taxable wage base when taxes are under-reported and under-withheld -
1. Create a manual paycheck.
2. Select a Transaction Type of Local Tax, and enter the locality code.
3. In the Taxable Wage amount box, enter the amount of taxable income that should have been recorded, but was not. Do not enter any other amounts.
4. Save and Post.
When you make this entry, it will adjust the employee's taxable wage base for that tax without generating any GL entries. Susan's suggestion with make sure the employee has the correct amount of tax withheld. Just be sure to do the two (taxable wage vs tax withholding) separately, and everything will come out correctly!
This will also work for Federal and state tax base and withholding corrections.
Thank you, Susan. That looks like an easy way to take care of the withholding amount - we do have the correct amount that should be withheld.The amount is not much so we'll probably do it all in the next check.
However, do you (or does anyone else) know how to adjust the local taxable wage base so that will also be correct at year end?
Thanks again!
Robert
If you know the amount you under with held and just want to catch that up, you can do that in the next check run by putting the amount in the additional withholding field for the local tax and it will pull that amount. Or do it over a series of checks before month end. (Calculate the number of payroll weeks left and then divide the amount underwithheld and put that amount in the Additional withholding.) Especially if you are going to kill the employees ability tolive on that next paycheck.
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