Fica Status for employee changed mid year, not reflected on w2 wages

[rfwoodvt]

Hi!

My daughter worked for our company and in the first half of the year she was under 18 and not subject to FICA/Medicare taxes. In the latter half she was.

The payrolls for the period she was not subject show FICA, Medicare, SUTA and FUTA exempt and no taxes were withheld.

The period she was subject show her as not exempt any longer and taxes were witheld.

However, the W2 Shows the total of both those subject and not in the boxes for FICA and Medicare wages when in fact the wages should only be those actually subject to FICA and Medicare.

My 941 Reports were correct.

Any thots as to why and what I can do to correct it?

[Paul Mayer]

The 941's where printed after each Quarter so the figures where correct. Unfortunately, the W2's use that "exempt" flag and now that she is not exempt, you will need to create a manual corrected W2 for her.

[rfwoodvt]

I have a number of students who come as exempt and some eventually work for us. this could be very problematic.

It would seem that since the payroll transactions are readily available in the database then generating proper and correct reports would be a simple matter. An readily visible warning in the documentation would have been nice.

In my daughter's case we were fortunate that her birthday was between pay periods and quarters. What would have happened to the 941's if her status had changed such that it was in the middle of a quarter?

[Paul Mayer]

I have a number of students who come as exempt and some eventually work for us. this could be very problematic.

It would seem that since the payroll transactions are readily available in the database then generating proper and correct reports would be a simple matter. An readily visible warning in the documentation would have been nice.

In my daughter's case we were fortunate that her birthday was between pay periods and quarters. What would have happened to the 941's if her status had changed such that it was in the middle of a quarter?

After discussing this with a few others, the consensus is to create a new Employee account when the person changes taxable status during the year and mark the non-taxable account as unemployed to not confuse the employee list when paying. The employee will receive two W2 Forms to file, one taxable and one with the non-taxable wages shown.