How do I recalculate subject-to for the current year?
Description

Note: If you have employees who live or work in Pennsylvania and you use Comparison Taxes, you have special considerations to keep in mind. See How do I set up Local ACT 32 Taxes for Pennsylvania?

Cause
Resolution
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 midyear
  • Employees' residence local changed midyear
  • New taxes were added midyear including
  1. Use File Tools to backup all Payroll files that contain earnings information for the current year (Master.prm, Current.prt, History.prt). Refer to How do I use File Tools to back up data files? for steps and considerations.
    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 (Reports,Tax Preparation).
  3. Determine which files contain earnings information for the year. Some customers used named files, and may have more than just a Current.prt for current year checks.
    Note: If the earnings information is stored in more than one file using named files (for example, Quarter1.prt, Quarter2.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. From the Setup menu, select Taxes, Tax Rates.
    2. Select 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. Select Save, then select Close.
  5. From the Tools menu, select Recalculate Subject-To.
  6. Select Current or select the oldest named file that contains current year checks.
  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. Select Start, and then click Yes to verify that you have backed up your Payroll files.
  11. If your current year checks are in more than one file, repeat steps 5 - 10 until all files with current year checks have been recalculated.
  12. Print the Subject-to Employee and Subject-to Employer reports and verify that the subject-to and taxable amounts are now correct.
  13. If you changed the tax limit in step 4, restore the current tax limit: From the Setup menu, select Taxes, Tax Rates.
  14. Select List, select the tax, and then type the correct limits.
  15. Select Save, then select Close.

Note:

  • 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, 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.

For example, to recalculate subject-to and taxable amounts for current year earnings dated January 1 - June 30 in a file named 1stHalf.prt, and for current year earnings dated July 1 to the current period in a file named 2ndHalf.prt, recalculate subject-to on the 1stHalf.prt file first and select the Clear taxable and subject-to period totals check box. Then recalculate subject-to on the 2ndHalf.prt file without selecting the Clear taxable and subject-to period totals check box.

Steps to duplicate
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