Note:

If you have employees who live or work in Pennsylvania and you use Comparison Taxes, see information about Local ACT 32 Taxes for Pennsylvania.

All checks for the year recalculate using your current tax setup. Contact Sage Support or your certified Sage consultant if:

• Employees' residence state changed mid-year
• Employees' residence local changed mid-year
• New taxes were added mid-year including:
  • WAPFL - Washington Paid Family Leave (2019)
  • DCPFL - District of Columbia Paid Family Leave (2019)
  • MAPFL - Massachusetts Paid Family Leave (2019)
  • NYPFL - New York Paid Family Leave (2019)

To recalculate subject-to for the prior year:

Note: The Recalculate Subject-to tool will recalculate taxable and subject-to values for federal and state taxes only. Local taxes will be unaffected.

1. Review considerations for using the Recalculate Subject-To tool.
2. Verify all transaction files that have prior year earnings are in the folder where you’ll recalculate subject-to amounts. Check Inquiry, Check Information, Check Activity, Current.
   Note: Add conditions for Check Date to view the checks in the affected period.
3. Use File Tools to back up all Payroll files with earnings information for the current and prior quarter. For example, the Master.prm, Current.prt, History.prt files. See How do I use File Tools to back up data files? and Recalculate Subject-To and Taxable totals for details.
4. Print the Prior Period Subject-to Employee and Prior Period Subject-to Employer reports (Reports, Tax Preparation).
5. From Setup, select Taxes, Tax Rates. Verify the tax Limits in the tax file are correct for the period you need to recalculate.
   Note: If the limits are wrong for the period, change the limits temporarily or restore a backup tax file that has the correct limits. See How do I restore my Payroll taxes after using the Download Taxes feature in Payroll?
6. Recalculate subject-to:
   1. From Tools, select Recalculate Subject-To.
   2. Select the related file:
      • If all checks for the period are in the current file, select Current.
      • If some checks for the period are in History and some are in Current, recalculate the History file first. Run recalculate again on the Current file.
      • If you're using named files, you must recalculate subject-to amounts for the oldest file first. This ensures the correct amounts update the taxable and subject-to totals for each period. Select the file with earnings from the beginning of the prior year and continue in chronological order through the current period.
   3. Click OK.
   4. Select Prior Year.
   5. Select the Clear taxable and subject-to period totals check box.
      • Note: Select this box when you have only one Payroll transaction file or when you select the oldest file to recalculate. Select this box if you don't use named files.
   6. Check the I have verified that the tax file contains the correct limits for the prior year box.
   7. If you want to limit the number of employees recalculating, click Ranges. Select the employees to recalculate. Click OK.
   8. Click Printer Setup and make any print selections. Click OK.
   9. Click Start. Click Yes to verify that you’ve backed up your Payroll files.
7. Repeat step 5 for each file that contains earnings for the current and prior year.
   Note: Don’t select the Clear taxable and subject-to period totals check box for each file. See the note on step 5d for details on when to select this check box.
8. To verify the new amounts, print the Prior Period Subject-to Employee and Prior Period Subject-to Employer reports.
9. Correct any tax Limit amounts that you changed in step 4, or restore your current tax file.

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 prior year's checks are in multiple files, you must recalculate the subject-to amounts for the oldest file first. This ensures that the correct amounts update the month, quarter, and year-to-date taxable and subject-to totals.
  Example: You need to recalculate subject-to and taxable amounts for prior year earnings dated January 1 - June 30 in a History file. You also need to recalculate prior year earnings dated July 1 to the current period in a Current file. You'll 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 checking the Clear taxable and subject-to period totals box.