To include in last Payroll of the year
Using the PAYROLL/PAYROLL PAYMENTS - CURRENT or PAYROLL/PAYMENTS-FUTURE program, the amount should be entered using a pay type of Non-Cash Taxable Benefits Pay Type (NC3). This pay type represents one kind of non-cash earnings for the employee. This amount is taxed and is included as taxable wages but does not increase the employee's check in any fashion.
Federal, Ohio, or OSDI City (if applicable) OSDI and Medicare tax amounts will be calculated. All of these will be treated according to the federal rules. The software provides the ability to withhold city tax on non-cash earnings. This can be activated by checking the "Tax Non Cash Earn" field on the city tax record in the CORE/PAYROLL ITEM CONFIGURATION program.
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If the 'Non-cash Taxable Benefit' pay type was not used during payroll processing, the Taxable Benefits (NC3) payment amount must be entered under the CORE/ADJUSTMENT JOURNAL using the Taxable Benefits Type in order for the Taxable Benefits (NC3) amount to show correctly on the W2 form. This amount would only be entered under the 001 Federal Payroll Item. This will update the total and taxable gross totals on the Federal, State, City (If applicable) OSDI and Medicare records during W2 Report. No manual adjustments are needed for the Gross and Taxable Gross amounts.
Go to Core>Adjustments.
Click Create.
Enter the Employee, Payroll item 001, Type of Taxable Benefits, a Transaction Date, Amount equaling the Taxable Benefit and a Description for future reference.
Click Save
Effects on Quarter Report: None
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When Taxable Benefits (NC3) Adjustment is added, each OSDI Payroll Items> Applicable Gross is increased by the Taxable Benefit amount. If an employee lived in multiple school districts throughout the year, the Applicable Gross for each OSDI Payroll Item will need to be calculated and Adjustments to reduce the OSDI's Applicable Gross accordingly should be entered. The Applicable Gross for OSDI Payroll Item is calculated by the following:
Go to Core>Adjustments and create an adjustment for a negative value to adjust the Applicable Gross according to the calculations above. |
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$1.45 Amount Withheld for 692
$1.45 Board's Amount of payroll item for 692
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This amount will affect the Quarter report:
Deductions Items Summary, 692-Employee Contruction *TD Totals for Employee portion only x 1
Form 941 QTD Employees' Medicare Contributions x 1 and Employers' Medicare Contributions x 1
Form 941 Line 13) Federal Withholding Deposits x 2
5. If the Medicare is fully board paid (referred to as Medicare Pickup), adjustments will need to be created. (Board will need to pay for both Employee and Employer portion of Medicare.)
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$1.47 Is the amount of Applicable Gross. This will update the employee's W2 Taxable Gross for Medicare.
Adjustment records that need to be created:
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This amount will only affect these lines on the Quarter Report:
Deductions Items Summary 692-Employee Contribution *TD Taxable x 1
Deductions Items Summary 692-Employer Pickup *TD Totals x 1
Form 941 Line 2) QTD Taxable Wages x 1
Form 941 QTD Employees' Medicare Contributions x 1
Form 941 QTD Employer's Medicare Contributions x 1
Form 941 'Includes board paid Medicare/FICA' and 'Picked up by board' amount x 1
Form 941 Line 13) Federal Withholding Deposits x 2