PR - Additional Medicare Tax double on paycheck last quarter

SUGGESTED

There was a single payroll check the end of last quarter that for some reason doubled the medicare - additional tax deduction for an employee. When filing the quarterly 940 return it was noticed and we showed as overpayment/refund.

What is the best way to correct this for employee? Should we just reduce the "medicare - additional tax" on next paycheck to bring YTD in balance?

Parents
  • 0
    SUGGESTED
    Good Morning!
    FICA and MEDADDL taxes are self adjusting taxes. Before making any changes, look at the employees YTD Subject to amount for that tax, and multiply it by the rate (.9), if the YTD tax shown is correct, the software will not adjust the MEDADDL tax and will calculate the correct amount. If the calculation is short, the software will "make up" the difference on the next check. MEDADDL tax will start to calculate once the YTD taxable is at 200,000.00.
    There are some instances where that YTD taxable value may be wrong, such as if the year wasn't closed before you processed the first check of 2016, or if there was a bonus or 2cd sequence check which was processed before a 1st sequence check.
    You may need to run recalculate subject to on this employee if you find that the Taxable and Subject to values for thise employee are not accurate. I hope this helps!
    Gaylene
Reply
  • 0
    SUGGESTED
    Good Morning!
    FICA and MEDADDL taxes are self adjusting taxes. Before making any changes, look at the employees YTD Subject to amount for that tax, and multiply it by the rate (.9), if the YTD tax shown is correct, the software will not adjust the MEDADDL tax and will calculate the correct amount. If the calculation is short, the software will "make up" the difference on the next check. MEDADDL tax will start to calculate once the YTD taxable is at 200,000.00.
    There are some instances where that YTD taxable value may be wrong, such as if the year wasn't closed before you processed the first check of 2016, or if there was a bonus or 2cd sequence check which was processed before a 1st sequence check.
    You may need to run recalculate subject to on this employee if you find that the Taxable and Subject to values for thise employee are not accurate. I hope this helps!
    Gaylene
Children