FICA exemption to showing up in 941

[hiho]

HELP! Checking "Y" FICA and Medicare box exemption in box 3, exempts income (year end health insurance payments reporting) from FICA deductions on paycheck (paystub) and wage report. But, the FICA exemption does not follow through to the 941 (medicare works fine) where all income is posted in box 5a column 1.

[Paul Mayer]

I just tested and it is working as expected.

In my test I first just set the deduction exempt from FIT and the settings were as seen below in the company settings:

198

The result on the 941 is as seen below where the taxable FIT wages is $56308.26 and the FICA and Medicare wages $58483.50:

199

Then I changed the company settings for the deduction to be exempt from FIT, FICA and Medicare like seen below:

200

And the 941 Form then reflected the changes as expected:

201

Now, the settings in order to be legal must have been set all from the start though in order for the taxes to have been properly calculated as the 941 form will audit and that fraction of cents line 7 will be a very high number if it was not set while you paid all employees that use the deduction.