Please verify with your Tax Accountant If these benefits need to be reported in boxes 1, 16 and 14. The following Instructions are for that specific senario.

1. Setup your In/Out pay. You will check the boxes for all taxes except FWH and SWH. This benefit is subject to withholding taxes.
2. Use Enter Checks to enter a check with this pay.
   Note: If you enter this with a regular earnings check for this employee, the withholding taxes will be higher than a usual check.

If you choose to enter this benefit pay on a separate check, use Enter checks:

• You will receive a warning about negative net pay. This is normal and you will zero out the amount which calculated for FWH and SWH taxes.
• Process this check again, and then click Manual and enter Check number and a Check date that falls within the year you are reporting this benefit for.
  Note: When processing this pay on a separate check, clear all calculation frequencies when processing and only taxes and the deduction portion of this pay will calculate.

If this Taxable Benefit is reportable in boxes 1, 3, 5, 14 and 16, you will have additional considerations:

• Boxes 3 and 5 are reporting FICA taxes. These taxes are self adjusting taxes and the tax will need to calculate for MED, MED_E, and MEDADDL (if this employee has a taxable amount of over 200,000.00). If the employee has not exceeded a subject to of 117,000.00 for SOC or SOC_E, these taxes will also need to calculate.
• When entering a check for this benefit, you cannot zero out the amount which calculates for FICA or MEDADDL taxes unless there is going to be another check issued in this year for that employee. If there is another check these taxes will self adjust and additional taxes for FICA and MEDADDL taxes will calculate on the next check.
• It is recommended that this type of benefit be entered with a regular earnings check before the end of the reporting year. The correct amount of taxes will then calculate for FICA and MEDADDL taxes, and there will be no need for self adjusting.

If you have any questions about the exempt vs non exempt status of these benefits, we recommend you contact your tax accountant, or see the IRS documents for W-2 reporting.

Additional considerations:

• If you have already closed your W-2 reporting year and need to have these benefits show on the prior year W-2, you'll enter the pretax benefit on a separate check. Do not include these prior year pays on a current year check.
• Follow the instructions listed above for the way you want these benefits to update the W-2. The check date must be in the prior year in order to post to the prior year and be included in your W-2 totals.
• If this benefit is considered taxable for FICA taxes (SOC, MED, MEDADDL, SOC_E, MED_E), you'll want to verify if the limits for SOC, SOC_E, and MEDADDL taxes were met in the prior year. If they are not, enter the amounts, date the check for the prior year, and post those checks.
• If limits were met for SOC, SOC_E or MEDADDL or this benefit will cause the limit to be exceeded for those taxes for the prior year, you'll need to determine the appropriate tax amounts which should have calculated on this check, and enter those amounts. It is recommended that if you have questions about this issue to contact your tax accountant.
• Once this check is posted and if limits are met, you will run the Tools, Recalculate Subject-to in order to correct the prior year Subject to and Taxable amounts.
• Please see the attached document for running Recalculate Subject to on a prior year.