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Ediehm
08-13-2010, 05:42 AM
I am having a problem with the Federal Income tax not being calculated for any of my employees. I have looked and insured that none of them are set to be exempt from this, put the the system is not having any of them pay federal tax.

I used your dummy employees and came out with the same exact numbers I did, except with your dummy employees Federal Tax was withheld, and with my actual employee it was set at zero still.

For example, I have an employee who has 0 exemptions and is filing Married, and makes $840.00 per month Gross. The system is not charging them any federal tax.

When I used your dummy employee with the same exemptions the FICA and Medicare were same as my actual employee, but they ALSO had Federal tax taken out.

What is the solution to this?

As a side note...none of my employees are having federal tax withheld. Is there a threshold of income that must be met before the system will start charging them federal taxes?

Paul Mayer
08-13-2010, 03:21 PM
Yes there is a wage threshold before taxes are taken out. If you look at Circular E for 2010 that you should have received from the IRS, you can see your example on page 55. A married employee with zero exemptions on a Monthly schedule has to earn at least $1160.00 before any tax is taken out.

Our sample file the employees are set to a Weekly schedule where the tax starts at a threshold of $270.00 before any taxes start.