Hi Tamera ,

Thank you for reaching out. If you’re addressing a non-taxable benefit over-deduction that spans across calendar years, here’s a recommended approach based on GAAP and payroll best practices:

1. Document the Over-Deduction
   Record the details of the over-deduction, including amounts, periods affected, and the impacted employee. This ensures proper tracking and compliance for reporting purposes.

2. Refund the Employee
   Issue a refund for the over-deducted amount to the employee. Make sure to provide a clear breakdown of the adjustment in their pay stub or a separate statement.

3. Adjust Payroll Records for 2024
   Update the employee's payroll record in Sage to correct the deduction balance for 2024. You can follow this article for guidance: Adjust Employee’s Pay in a New Tax Year. Ensure the adjustments reflect the refund and prevent further discrepancies.

4. Correct Reporting
   If this adjustment affects year-end reporting (like T4s in Canada), consult with your accountant or tax advisor to ensure that the records accurately reflect the corrected non-taxable benefit deduction.

5. Communicate with the Employee
   Clearly communicate the adjustment and refund to the employee to avoid confusion. Provide them with any necessary documentation.

Let us know if you need further assistance with specific steps in Sage or reporting corrections.

Warm Regards,
Erzsi

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