Hi guys,
I do have the most recent version of Sage 300 (18.4 Update 2) but I think I found an error with the Federal Tax Withholding calculations, unless I'm interpreting something very wrong.
Whenever the new year starts, I spot check tax withholding by calculating the tax withholding on a few checks manually. Everything is fine for people who are using an older W-4 form, but I have one employee who has submitted a new W4 and that's where the tax calculations seem off.
My employee is Single and the total amount for Step 3 is $2,000. No other boxes are checked and no other fields have data.
I did my manual calculation using the IRS worksheet and tables located in Publication 15-T, and I've attached the worksheet for reference. My calculations result in $99.38 to be withheld per weekly pay period, Sage comes up with $137.84. After trying a few different things, I figured out where we vary. I get the amount of Sage's withholding if I count the $2,000 as a DEDUCTION but the IRS considers it to be a tax CREDIT. Can someone confirm if that my understanding of the calculation is correct before I run off to Sage and tell them the error?
Thanks much!
