Option 1: Enter a check with the refund and other earnings:

Important considerations:

• This solution is only for current employees.
• The check must have taxable earnings other than this negative deduction.
• Do not use this solution if changes were made to the pretax deduction settings since the original check.
• Only use this solution for checks issued in the current year.
• This method does not correct the taxable and subject-to of local taxes for a pretax deduction withheld in error. If checks issued with the incorrect deduction had local Taxes on them, you must void and re-issue the checks.

1. Process your payroll as normal.
2. From the Tasks menu, select Enter Checks.
3. Click List, select the correct time entry view, and then click OK.
4. Type the correct date in the Period Begin Date box, and click OK.
5. Click List, select the correct Employee, and then click OK.
6. Type the correct date in the Period End Date box.
7. Press the TAB key twice, and then click Deduct.
8. Click List, select the deduction ID, and then type the amount of the refund as a negative amount.
   Note: Negative deductions add a positive amount to the net of the check.
9. Click Accept Line, and then click Process.
10. Select the calculation frequency, and then click OK.
11. Click Chk Info, and verify that the amounts are correct.
    Note: If the amounts are not correct, make corrections and process again.
12. Click OK.
13. Click Accept Check and then click Finish.
14. Print the check (Task, Print Checks).

Option 2: Enter a check with the refund and no other earnings:

Important Considerations:

• Do not use this solution if you have Local taxes. If checks issued with the incorrect deduction had local taxes on them, you must void and re-issue the checks. This method does not correct the taxable and subject-to of local taxes for a pretax deduction withheld in error. When you include the local tax on a refund of a pretax deduction, you can create odd values for taxable and subject to amounts for Local and State taxes. The odd value can appear as "n.an". This odd value will not only be written to that specific check but can also affect the master.prm tax record. Instead of seeing correct YTD Taxable and YTD Subject to amounts, you will also see "n.an". See Payroll Taxable/Subject to amounts may be written incorrectly to checks when earnings are coded to a local tax group and a refund of a pretax deduction is included on the check.
• Do not use this solution if changes were made to the pretax deduction settings since the original check.
• You may need to adjust the tax amounts on future checks for taxes that do not self-adjust and tax types other than withholding that calculate after the deduction.
• To calculate the tax amount, select Setup, Taxes, Tax Rates, List, select the tax ID, and note the tax percent.
• If the employee exceeded the limit of a specific tax, you do not need to enter an amount.

Verify the setup of deduction ID:

1. In Payroll, from the Setup menu, select Deductions.
2. Click List, select the deduction ID, and then click OK.
3. Press the TAB key.
4. Note the tax selections for Before employee taxes and Before employer taxes.
5. Click Cancel and then click Close.

Enter a check to refund the deduction:

1. From the Tasks menu, select Enter Checks.
2. Click List, select the time entry view, and then click OK twice.
3. Click List, select the employee ID, and then click OK.
4. Type the period end date, and then press the TAB key twice.
5. Click Deduct, click List, select the deduction ID, and then click OK.
6. In the Amount box, type the refund amount as a negative amount.

Correct the employee tax amounts:

1. Click Tax, click List, select the tax ID, enter 0.00 for the amount and then click OK.
2. Repeat this step for each tax selected as pretax in the deduction setup. For example, if FWH is selected on the deduction ID, select FWH.
3. Type the correct tax id for each tax that was pretax to this deduction. (Since you file withholding taxes at year-end, it is not necessary to enter tax amounts for withholding taxes, however, you can enter an amount.)
   • If the tax marked as pretax on the deduction setup has met the subject to limit, you must still enter the tax id. This way the taxable record will be created.
   • If the tax marked as pretax is a self adjusting tax, and you do not enter an amount for MED, MED_E, SOC or SOC_E. The tax will self adjust on the next check this employee receives. If this employee is no longer an active employee, calculate the FICA and FICA_E tax amounts and enter them on this check. Remember to also add the MEDADDL tax id to this check. This employee may not meet the current subject to on this tax, however it is important to note that all taxes which were marked as pretax on the deduction setup must be manually entered on this check. This way the taxable record will be created for those taxes.

Correct the employer taxes:

1. Click Emplr Tax, click List, select an employer tax ID that is marked pretax in the deduction setup, and then click OK.
2. In the Amount box, type the appropriate tax amounts for taxable income.
3. Click Process, select the On demand check box, and clear all of the other check boxes.
4. Click OK, Accept Check, Finish.
5. Print and post the check.

Review the deposit summary report to verify the taxable and subject-to income amounts are correct:

1. From the Reports menu, select Pay Period Processing, Deposit Summary.
2. Select New and then click OK.
3. Type a date range, and then click Start.