Reporting Medical Payments for Sub-S Corporation User Guide

Transcription

1 Reporting Medical Payments for Sub-S Corporation User Guide Davisware 514 Market Loop West Dundee, IL Phone: (847) Fax: (847) Contents are the exclusive property of Davisware. Copyright All Rights Reserved. Published NR/RL

2 Table of Contents Reporting Medical Payments... 3 Create adjustment codes... 3 Apply adjustments... 6 Run payroll calculations... 6 Enter accruals... 7 Close payroll and check W Davisware 2

3 Medical Payments Reporting Purpose: Instructions on reporting medical payments for Sub-S Corporations. Overview: Many shareholders who own 2% or more of Sub-Chapter S Corporation stock are required to report the value of medical insurance premiums on their W2 forms at year end. Please use this document as a guide to reporting these amounts using the GlobalEdge (GE) Payroll process. Access: Payroll Management Reporting Medical Payments Create adjustment codes 1. Set up one adjustment as an Add to Gross which is subject to Federal and State withholding. The adjustment is NOT subject to FICA, Medicare, or any unemployment. Please check with your accounting firm for direction on taxability at the city and county levels. The calculation type should be FX fixed amount. a. Access the Payroll Management > Payroll Maintenance Menu and click Adjustment Code Maintenance. Result: The Payroll Adjustment Maintenance window displays. b. Click F2-New. Davisware 3

4 c. Complete the fields using the following information: Field Data Entry/Selection Adjustment Id SUBA Description Sub-S Health Insur Add Short Desc Sub-S Hlth Addition/Deduction Addition Gross/Net Gross Fund Class Z Adjust 14 (Goes to box 14) Calculation Type FX FIXED AMOUNT Adjust Net Pay G. L. Code 9999 Choice Dept. Blank Matches Check Type R,B Federal State Result: The Sub-S Health Insur Add adjustment screen appears as follows. d. Click F8-OK. Result: The adjustment record is added to the table. Davisware 4

5 2. Create an additional adjustment that is a deduction from net pay, fixed amount. Since the adjustment is a deduction from net, the system ignores the taxing fields for the various FICA, Medicare, etc., so you can keep the Federal and State fields checked. a. From the Payroll Adjustment Maintenance window, click F2-New. b. Complete the fields using the following information. Field Adjustment Id Description Short Desc Addition/Deduction Gross/Net Fund Class Calculation Type Adjust Net Pay Data Entry/Selection SUBD Sub-S Health Deduction Sub-S Hlth Ded Deduction Net blank FX FIXED AMOUNT G. L. Code 9999 Choice Dept. Matches Check Type Federal State Blank R,B c. Result: The Sub-S Health Deduction adjustment screen appears as follows. d. Click F8-OK. Result: The adjustment record is added to the table. Davisware 5

6 Apply adjustments 3. You can use the addition/deduction adjustments on either an existing open payroll or create a 0.00 bonus check for each employee who receives the medical addition to gross wages. For example an office bonus entry may appear as follows: 4. Add the addition adjustment, SUBA, and then the deduction adjustment, SUBD, for the amount of the health insurance through the One Time Adjustment Entry program. Make sure to change the Check Type to B. Run payroll calculations 5. Next run Payroll Calculations for the employee(s). 6. Review the results on the check proof. For example: Note that federal withholding was calculated on this check; the accrual program will zero out the federal income tax and 0.00 the net pay. Davisware 6

7 Enter accruals 7. Update the check using the Payroll > Periodic Processing > Accrual Entry Program. a. Enter the employee ID. b. Enter 0.00 in the Federal WH field and 0.00 in the Net Pay field. Close payroll and check W2 8. Close the payroll, and then check the W2. This employee had no earnings prior to the medical posting. Note that the employee now shows the amount in the federal taxable, state taxable, but not FICA or Medicare taxable. The adjustment amount shows in the W2 box 14. Davisware 7