W2 Federal Taxable Wages

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Posted on by Sunil Chhabra

1,958

We just noticed that the W2's are picking up incorrect Federal Taxable Wages.

We offer a tax free benefit and it is setup as a paycode .

If I look at the Employee Summary Inquiry Window it correctly shows all the wages types

For example, the tax free benefit for the year is $20 - the Gross Wages are 50000, Taxable Fed Wages are 49980, FICA/MC wages are also the same 49980. There are no tax deferred deductions.

But when we print the w2 - the Box 1 lists as $50000 (Box 1 is federal taxable wages it should be 49800)

SS Box 2 and MC Box 5 wages are correct as 49980.

What could be causing this?

Thanks for your assistance

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Microsoft Dynamics GP

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Sunil Chhabra 1,958 on at

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RE: W2 Federal Taxable Wages

Thanks Terry. Not the answer I was looking for but it is GP and I have learned to expect the unexpected.

Not sure why it will not add the amount to SS and MC wages as well at least it will be consistent - rather then just Federal Wages on W2. Also makes no sense why allow the user to uncheck the Federal Tax and other tax boxes for Paycode unless it is a Business Expense.
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Terry R Heley Microsoft Employee on at

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RE: W2 Federal Taxable Wages

Hello, all pay codes are added to gross even if it is not subject to tax

The pay code needs to be a business expense pay type that is the only one that will not be added to gross

For W2 time, to figure box 1 we take gross – TSA + taxable benefits.

For this year, you may need to edit the W2, then process this with a new pay code for the 2020 year so the record is updated correctly. Thanks

Terry Heley

Microsoft