Need to be able to create new Earnings Codes to handle exempt employees either for HIRE ACT or non-residential alien exempt statuses and comply with Federal regulations specifically related to tipped earnings.
The HIRE Act allows employers who hire unemployed workers this year may qualify for a 6.2-percent payroll tax incentive, in effect exempting them from their share of Social Security taxes on wages paid to these workers after March 18, 2010
Per publication 515 Non-Residential aliens should not be taxable for Social Security and Medicare on all earnings including tips.
by: Regina G. | over a year ago | Payroll / Job Cost
Comments
Published instructions for processing non-resident alien payroll in Sage 2018+ payroll follow. In what world do we want to have to manually override taxable wages!?! There has to be a way you can have the system calculate the right tax without having to add and delete lines and then manually override wage amounts.
Resolution
Setup Payroll, Setup Options, Tax Profile Maintenance for the State/Local that is involved.
Setup Earnings Code to add the Federal adjustment that should be taxed for Federal withholding tax only. Miscellaneous, Fixed Amount per Publication 15 for Paycycle, Fixed Amount, Tax Rule (one that has this earnings code subject to Federal withholding taxes but no other taxes for Federal, State to be determined by user what should be taxable. Tax Rule -800115 taxes only Federal w/h but does not tax SS, Med, FUTA.
Setup Deduction Code to deduct the Federal adjustment after tax has been calculated. Employee does not get paid for this amount of adjustment. Standard Deduction, Fixed Amount same as Earnings code, Automatically Apply Deduction to Earnings Code setup in Step 2. Apply to Employees as needed.
Make Sure Employee is set to Single and no more than 1 exemption per Publication 15.
Create payroll, first line will be regular paid wages. Select Yes to apply auto deductions which brings in the deduction and connected earnings.
Run Tax calculation and note that the Federal withholding tax is more than it would be for just the regular earnings.
After the check is updated, the Federal Withholding wage will need to be edited in the Tax Summary for those employees as the Adjustment amount is not to be reported on the W2 and possibly not on the 941.