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Enter payroll checks

Troubleshooting payroll check tax calculations

If taxes are not calculating correctly on payroll checks, here are some steps to take to identify, understand, and correct the problem.

Verify exemption selections

  • Setup > Clients > Payroll Taxes tab:
     In the Taxes section, are any of the checkboxes in the Wage Exempt column marked?
  • Setup > Payroll Items:
     Are any items excluded from gross or net pay? Are any jurisdictions marked on the Tax Exemptions tab that should not be?
  • Setup > Employees > Payroll Taxes tab:
     Is the Federal tax exempt checkbox marked? Is the Tax exempt checkbox under the State Withholding section marked? Are any of the checkboxes in the Wage Exempt column marked in the Taxes section?

FIT (Federal Income Tax)

FIT is withheld according to
IRS Publication 15
.
Make sure the frequency on the payroll check is correct:
  1. Enter Transactions
     screen:
    1. The
      Frequency
       field is located within the
      Handwritten/Check #
       section.
  2. Enter Batch Payroll Checks
     screen:
    1. The
      Frequency
       is located near the Payroll schedule field.
  3. Setup
     >
    Clients
     >
    Payroll Information
     tab:
    1. Select the ellipsis near Payroll Schedules
    2. The
      Pay Frequency
       is within the
      Pay Schedule Information
       section.

FICA-SS and FICA-MED

Accounting CS keeps track of how much has been withheld for FICA-SS and FICA-MED so that at the end of the year the correct amount is withheld. Incorrect withholdings are usually the result of the FICA amounts being overridden on previous payroll checks. If the withholding seems to be incorrect, use the following procedures to verify the withholding amounts are actually incorrect and find the checks where overrides were made.
Use reports to show the amounts are actually not correct YTD
Use the following reports/steps to verify that because overrides were made, the withholding amounts YTD are not correct and therefore Accounting CS is not calculating the exact percentage expected.
  1. Run a Payroll Tax Summary - Detailed report.
  2. OR, run a Payroll Journal with Taxable Wages.
  3. Take the YTD taxable wage amount and calculate what the withholding should be.
How to check for FICA overrides on payroll checks
  1. In
    Enter Transactions
    , select
    Bank Account Mode
    .
  2. In the
    Filter
    , filter for a particular employee by ID or name.
  3. Sort the list of transactions by date, and then locate the 1st payroll check for the year.
  4. Select each payroll check and look for amounts in red for
    FICA-SS
     and
    FICA-MED
    .
If you do see overrides on the FICA taxes, Accounting CS is changing the amount withheld so that at the end of the year, the correct amount is withheld for the employee. Note: the employer FICA-MED amounts will need to be adjusted as they’ll populate based on calculated Employee FICA-MED amounts.
There are 3 options:
  1. Delete and re-enter the checks without making overrides.
  2. Let Accounting CS make up for the past overrides, adjusting employer FICA-Med amounts as needed.
  3. Continue to override the FICA amounts for the remainder of the year.
If the FICA wage limits are not being honored, or are using old limits, verify that Accounting CS is being run as an Administrator.
  1. Close the Accounting CS application.
  2. Right-click on the Accounting CS icon on your desktop and select
    Properties
    .
  3. On the Compatibility tab, select the
    Run this program as an administrator
     checkbox.
  4. Select
    Apply
     and
    OK
    .
  5. Open Accounting CS and verify that the FICA taxes are calculating properly.
For after the fact payroll, or clients or employees who started after the 1st payroll of the year, previous payroll information needs to be entered in the correct date order for the FICA amounts to calculate correctly.

FUTA

Sometimes the FUTA amount is double what it should be.
  • Select Setup > Employees and select the Payroll Taxes tab.
  • Unmark the
    Full FUTA rate
     checkbox.

Multi-state calculations

Employees who work in multiple states will have different withholdings depending on which states are involved. Accounting CS works in the background with your setup selections to determine which state withholdings should calculate. Before you continue with these steps, be sure that you know which taxes for which states should be calculating.

Setup items in Accounting CS that may be affecting multi-state calculations

Residency certificate on file checkbox
  1. Select
    Setup > Employees > Payroll Taxes
     tab.
  2. In the
    State Withholding
     section, select the
    nonresident state
    .
  3. Select or unmark the
    Nonresident exemption certificate
     checkbox.
Nexus checkbox
  1. Select
    Setup > Clients > Payroll Taxes
     tab.
  2. In the
    State section
    , select the state from the dropdown.
  3. Select or unmark the
    Client has nexus in this state
     checkbox.
  4. Alternatively, if a local tax isn't calculating select the
    Local
     button and select or unmark the checkbox for the locality in the Nexus column.
Resident and/or Taxing addresses
Because Accounting CS uses the addresses entered to determine what taxes calculate, it is important to review how the addresses are set up.
  • Select
    Setup > Clients > Main tab.
    • Verify that the correct address is marked as the
      Taxing address
      .
    • Select the
      bars button
       near the address to look up and validate the address.
    • If the client has more than 1 location, select the
      Locations
       button and make sure that the correct address is marked as the
      Taxing address
       for each location.
  • Select
    Setup > Employees > Main tab
    • Make sure that the correct address is marked as the
      Resident address
      .
    • Select the
      bars button
       to the right of the 1st line of the address to look up and validate the address.
Employee locations
  1. Select Setup > Employees > Main tab.
  2. In the Locations and Departments section, make sure that the employee is assigned to the correct locations.
Pay item tax exemptions
This happens sometimes with clients converted from CSA who have different pay items set up for different states or localities. You will need to make the pay items not exempt from the other jurisdiction's tax and enter the hours using the ellipsis button for the correct location.
  1. Select
    Setup
     >
    Payroll Items
    .
  2. Find the pay item and edit it.
  3. On the Tax Exemptions tab, look for anything that is marked.
Wage exemptions
  • Employees can be wage exempt in certain circumstances according to IRS Publication 15. The Wage Exempt checkbox should be marked ONLY if the employee meets the requirements for the circumstances described by the IRS. 
  • There are 2 places where the Wage Exempt checkbox can be marked: on the Payroll Taxes tab on Setup > Clients and Setup > Employees. Note that marking the Wage Exempt checkbox on Setup > Clients makes ALL employees' wage exempt.
  • Marking the Wage Exempt checkbox in the Taxes section indicates that the employee is not subject to that tax at all. Wages for that employee won’t be reported on payroll tax forms, or included on any reports generated from Accounting CS.
Tax Exempt checkboxes
Marking the
Federal tax exempt
 or
Tax exempt
 checkboxes in the
Federal and State Withholding
 sections on
Setup > Employees > Payroll Taxes
 tab means that the employee's wages are still reported on the payroll tax forms, but no amounts are withheld from the payroll checks. These wages will also appear on reports generated from Accounting CS.
  • If you are unsure whether or not an employee qualifies to be tax exempt, refer to
    IRS tax topic 753
    .

Local withholdings

If you are not seeing local taxes calculate like you expected, first refer to the particular state's website.
  • Use
    Ohio's The Finder website
     to determine what should be withheld according to the state.
  • Use
    Pennsylvania's website
     to determine what should be calculating according to the state.

Setup items in Accounting CS that may be affecting local tax calculations

Verify addresses
One of the best troubleshooting steps you can take when troubleshooting a local tax not calculating (OH and PA especially) is to make sure that the addresses entered in Accounting CS are good, and that they’ve been properly verified
  1. Select Setup > Clients > Main tab and verify the existing client (work location) address by selecting the bars button to the right of the 1st line of the address.
  2. Select Setup > Employees > Main tab and verify the existing employee (resident location) address by selecting the bars button to the right of the 1st line of the address.
  3. Select Actions > Enter Transactions and start entering a payroll check for the employee. If you enter a check for $100.00, you can easily see the rates everything is calculating at.
Nexus checkbox
If a client has nexus in a jurisdiction, it means that they have a business connection or a presence in that jurisdiction and are therefore subject to state or local income and sales taxes. You can use this checkbox to turn on courtesy withholdings for local jurisdictions.
  1. Select Setup > Clients > Payroll Taxes tab.
  2. In the State section, select the state from the dropdown menu.
  3. Select Local and select or unmark the checkbox for the locality in the Nexus column.
Employee locations
  1. Select Setup > Employees > Main tab.
  2. In the Locations and Departments section, verify that the employee is assigned to the correct locations.
Pay item tax exemptions
This happens sometimes with clients converted from CSA that have different pay items set up for different states or localities. You will need to make the pay items not exempt from the other jurisdiction's tax and enter the hours using the ellipsis button for the correct location.
  1. Select
    Setup > Payroll Items
    .
  2. Find the pay item and edit it.
  3. On the
    Tax Exemptions
     tab, look for anything that is marked.
If you are still not seeing the correct taxes withheld after all of this, you may also want to check the address at the United States Postal Service website to see if the address given to you by your client agrees with their database.
Exemption allowances:
 The application uses the number of state allowances to figure the local as well. There is not a way to indicate that the local exemption allowances are different from the state allowances. You will need to manually calculate and override one of the withholding amounts in these situations, or you can vote on Idea #2355 on the Accounting CS Ideas Community.
The Accounting CS Ideas Community is the best way to report incorrect address verifications for local taxes to our development team. The scope, feasibility, and popularity of a suggestion will impact whether it will be implemented in a future release of Accounting CS.

Limits being ignored (FUTA or SUTA)

This usually happens with after-the-fact payroll clients when the payroll checks are not entered in the correct sequence.
If you enter a check for June before you enter a check for April where the employee hit the limit, Accounting CS doesn’t know that the limit was reached and will calculate the withholding on the June check.
The Payroll tax summary - detailed report is helpful in this situation.
Unfortunately, the only resolution is to delete the checks that have FUTA or SUTA amounts on them.  Additionally, delete any checks that have incorrect FUTA/SUTA amounts.  You'll need to re-enter the corrected checks in sequential order. When you re-enter the checks, you don’t need to enter each one individually unless you, or your client are looking for that level of detail on the reports. Otherwise, if you don’t need so much detail, you can enter monthly, quarterly, or year to date checks for the employee.

Multiple checks with the same payroll check date

Prior year-to-date taxable wages on payroll checks are calculated based on both unprinted and printed checks with the same or an earlier check date.   When multiple checks are entered with the same date, the calculation is based on the order the checks were entered.  Suspended batches of checks don't impact calculations.
For example, if an unprinted payroll check is entered and reaches a tax limit, then a 2nd check is entered for the same employee using the same check date. The calculations included in the previously entered unprinted check will be factored in when calculating the prior year-to-date amounts.

This article applies to:

  • Product: Accounting CS Client Access
  • Subject: Payroll checks

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