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. 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.
No Federal, Ohio, or OSDI 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.
If the Non-Cash Taxable Benefit Pay Type was NOT USED prior to the last pay of the calendar year, the Taxable Benefits (NC3) payment amount must be entered under the CORE/ADJUSTMENT JOURNAL in order for the Non-Cash Taxable Benefit amount to show correctly on the W2 form and to insure that the Quarter balances. The W2 Report will automatically adjust the Federal, State, City, Medicare, etc. gross and taxable gross amounts. No manual adjustment are needed.