Note: All checks for the year are recalculated using your current tax setup. Contact Sage Support or your certified Sage consultant if any of the following apply to you:

• Employees' residence state changed mid-year
• Employees' residence local changed mid year
• New taxes were added mid-year

See What do I consider before using Recalculate Subject-to? for more considerations.

1. Use File Tools to backup all Payroll files that contain earnings information for the current year (Master.prm, Current.prt, History.prt).
   Note: All transaction files that have earnings information for the current year must be located in the current data folder.
2. Print the Subject-to Employee and Subject-to Employer reports under Reports, Tax Preparation.
3. Determine which files contain earnings information for the year (for example, Current.prt or History.prt).
   Note: If the earnings information is stored in more than one file (for example, in both the Current.prt and the History.prt ), select the file that contains earnings from the beginning of the year (oldest file first) and proceed in order until taxes are recalculated through the current period.
4. Verify the tax limits are correct:
   1. Go to Setup, Taxes, Tax Rates.
   2. Click List and select the tax that has limits (for example: FUTA_E).
   3. Verify the tax limits in the tax file are correct.
      Note: If the limits are not correct for the recalculation period, either change the limits temporarily or restore a backup tax file that contains the correct limits.
   4. Click Save and then click Close.
5. Go to Tools, Recalculate Subject-To.
6. Select Current or History, and then click OK.
   Note: Select the history file first if checks for the current year are in the history file.
7. Select Current year.
8. Select the Clear taxable and subject-to period totals check box.
   Note: Select this check box when you have only one Payroll transaction file or when you select the oldest file to recalculate.
9. To limit the number of employees to recalculate, click Ranges, select the employees, and then click OK.
10. Click Start, and then click Yes to verify that you have backed up your Payroll files.
11. Print the Subject-to Employee and Subject-to Employer reports and verify that the subject-to and taxable amounts are now correct.
12. If you changed the tax limit in step 4, restore the current tax limit:
    1. Go to Setup, Taxes, Tax Rates.
    2. Click List, select the tax, and then type the correct limits.
    3. Click Save and then click Close.

Notes:

• Only the employee and employer portion of taxable and subject-to amounts recalculate and change. If necessary, you can adjust tax amounts manually after you review the subject-to reports.
• If the current year's checks are in multiple current files or checks are in the history file, it is important to recalculate the subject-to amounts for the oldest file first so that the correct amounts update the month, quarter, and year-to-date taxable and subject-to totals.
• SUI Hours will be recalculated, on the Check Tax and Employee tax record. Values stored on the Pay Group setup are used.

For example, to recalculate subject-to and taxable amounts for current year earnings dated January 1 - June 30 in a history file, and for current year earnings dated July 1 to the current period in a current file, recalculate subject-to on the history file first and select the Clear taxable and subject-to period totals check box. Then recalculate subject-to on the current file without selecting the Clear taxable and subject-to period totals check box.