Cafeteria Plan

Question

Cafeteria Plan deduction does not calculate taxes when I enter it as a negative amount to reimburse an employee, does anyone know what I need to do? 
 
 Thanks for all your help! 
 Rosa

Linda KR · Accepted Answer

If you had earnings on the check, tax rule 805158 would reduce the earnings by the deduction amount prior to calculating the federal taxes. I cannot say for the state without knowing what state. Since you only are using a deduction code, there are no earnings to reduce so you must do the taxes manually. If you want the earnings to show that you withheld the deduction which reduced earnings, now you are giving it back which would increase those earnings, you will need to edit the tax summary for the earnings it previously reduced. On the original check I would increase the federal & state wages that it previously reduced. If original check shows gross $1000, federal withholding $900 (which is what $100 deduction would show for original entry), change the $900 to $1000 if that is the only deduction that reduced earnings. Then the Quarterly tax report should show gross - deduction = wages subject to tax $1000 and the deduction washed out. This may require a support call if this is still confusing.

Linda KR · Answer

Did the cafeteria plan reduce the taxes of the earnings tax on the original check where it was withheld? Then the Deduction code was assigned a tax rule. 
 Now you are trying to reimburse the employee "ONLY" the cafeteria plan deduction? Then you need to enter Manual Taxes as positives if you are paying him back for the deduction that reduced his original taxes. This would be calculating manually how much that deduction reduced the taxes on earnings on the original check and how much the original check taxes would have been without the deduction. Enter the difference in as positive manual taxes to correct the transaction. 
 Which taxes to review depends on the tax rule used on the original check. If it reduced no taxes for the cafeteria plan, no tax calculations are needed. If they are reimbursed with earnings, the system will calculate the reimbursement with the earnings taxes.

Sage 100

Cafeteria Plan

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