Social Security withheld appears at different rates

[wahoos1]

6 employees for year. All employees, except the one hired 9/23/2011 shows a range of social security withheld rates from 4.6-6.2%.

Employee 1: employed all year wages 13389.77 SS withheld 620.94
Employee 2: employed all year ( decreased hours significantly Q3) wages 8934.33 SS withheld 460.04
Employee 3: left employ 2/25/2011 wages 902.22 SS withheld 55.94
Employee 4: left employ 5/19/2011 wages 526.00 SS withheld 31.40
Employee 5: left employ 8/11/2011 wages 7043.75 SS withheld 373.23

Employee 6: Hired 9/23/2011 wages 4964.29 SS withheld 208.49


W3: total wages 35760.36 SS withheld 1750.04

What have a screwed up?

[Paul Mayer]

Doing the math on your examples, you were using the old tax tables from 2010 up until about the beginning of May. That was when you updated and started using the 4.2% tax rate.

Now the problem is that you actually collected too much FICA tax from the employees. You've paid those taxes to the IRS and *must* report what you collected.

Did you not use the update checker through the year? Especially on January 1, 2011 when the 2011 tax tables were released? Also when you printed the Quarterly 941 Forms, it would have shown a red flag by the adjustment line being more than a few cents. All you can legally do now is report what you've collected and paid.

[wahoos1]

Part of the problem is that the w2s are being held up int their turbo taxes. Is there anyway to adjust and send a corrected W3 etc.

[Paul Mayer]

Give the IRS a call and ask them what you can do explaining how you didn't update the FICA percent until the beginning of May and would like to know what they suggest. I have a feeling if Congress does not continue the 4.2% rate after February, we will see the same problem from those that do not check for updates before each pay day.

In the mean time I will see what I can learn about the problem myself. If you get info from the IRS before I do, post a message in this thread on what they said. I'm going to talk to the W2Express people as they are experts in this area.

[Paul Mayer]

I just got off the phone with the folks that do the W2Express program that is an add-on for PayWindow that will allow you to edit the W2 Forms before printing them on plain paper by the way. I believe it is $45 and you can load it which you will see from the link I will paste in below, edit the forms and then print them. You will need to reimburse the people that you over taxed and give them the new W2's to use. I'm hoping that you have not distributed those that were using the wrong FICA rate nor send in the red copy to the IRS yet. See this link below and after loading the data from PayWindow, calculate each employee's FICA by multiplying the FICA wages by 4.2% and edit the forms and save them.
See this page in the help file:

http://zpay.com/pw-online-help/module_12_4_2_1.htm?mw=MjMw&st=MQ==&sct=Mzk0&ms=AAA=

[wahoos1]

Worked perfectly. Staff all quite pleased with a sudden, if not terribly large, surprise bit of cash.