how2pr06.htm

How to withold ADDITIONAL FICA from an employee's paycheck

Why this might be necessary:

Prior to payroll module version 02.10.30a, employees having 99 federal exemptions triggered a "bypass tax" feature that could also have caused the module to erroneously bypass taking FICA tax from employee wages in addition to bypassing federal taxes.

Procedure:

1. You need the both payroll module version 02.10.30a and the payroll finish module 02.10.30a or later to perform this procedure.
2. The employee(s) in question must still be working, AND receive pay in the next payroll period(s).
3. Calculate the amount of missed FICA withholding for each employee. The best report to use is the YTD Employee Tax Report (from detail) which lists each paydate. The report includes a fica wage column as well as the fica tax column; if the fica tax column has a few blanks, it is easy to calculate the missing fica tax payable by multiplying the fica wage column by .062 (the current FICA percentage). The difference between the calculated value and the total on the report is the amount that was not withheld.
4. Open any text editor such as Notepad, WordPad, etc.
5. Type the employee number requiring the additional tax, then a comma, and then the amount of extra fica to withhold. Do not use any dollar signs. Example: 205 , 34.78
6. Add a new line entry for each additional employee requiring additional fica withholding.
7. When done, click FILE - SAVE AS.
8. Along the bottom, change the "save as type" to "all files" so that a TXT or DOC or other extension isn't automatically added to the file.
9. Locate the CDCO folder, and then type in this name for the file: XTRAFICA.DAT
10. Click OK to save the XTRAFICA.DAT file into the CDCO folder.
11. Close the text editor.
12. The next time you run the payroll module, the XTRAFICA.DAT file will be scanned and the appropriate amount of additional fica withholding will be included in that employee's calculations.
13. Continue the payroll as you normally would, including the normal payroll finish. The finish procedure will remove the xtrafica.dat file so it can't accidentally do it again.

Important Notes:

• Be sure to discuss the matter with the employee first. Tell him/her that on one (or more) paychecks the proper amount if FICA tax was not withheld from their paycheck, and that neither of you have an option to ignore the problem. You may have to work out a plan to make up the difference over one or more payroll periods.
• It is possible that the extra fica to be withheld is greater than the employee's earnings during the current payroll period. This would create a negative payroll check, and the system will catch the problem. In this case, you will have to use the procedure over multiple payrolls for that employee. You should use the text editor again to edit the xtrafica.dat file, reduce the respective employee's extra fica withholding, resave the xtrafica.dat file again, and re-run the trial process. Be sure to keep track of the changes as you'll have to do it again for a subsequent payroll.

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