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fincoord
Level 2

adjusting social security/Medicare wages

I entered a company contribution on an employee's paycheck for Taxable Group Life Insurance. The employee quit before the month was over and wasn't eligible for the life insurance but I forgot to remove the entry from her totals before her last check.  I did a payroll liability adjustment for the employee and deducted the amount so her totals now look correct.  But when I  run my quarterly report there is too much in Social Security Wages and Medicare wages on the company side.  I don't know how to lower those amounts.

5 Comments 5
GlinetteC
Moderator

adjusting social security/Medicare wages

Hi there, fincoord.

 

Creating a liability adjustment can be done to both employee and company side. Now that you're done creating the adjustment to your employee, you also need to create an adjustment on the company side to correct the amount.  Let me show you how:
 

  1. Go to the Employees menu.
  2. Click Payroll Center.
  3. Select the Payroll tab and go to Pay Liabilities.
  4. Under the Other Activities section, select Adjust Payroll Liabilities.
  5. Enter the Date and choose Employees.
  6. Under Taxes and Liabilities, select Social Security Company, then enter the Amount and Wage Base.
  7. In the next line item, select Medicare Company, then enter the Amount and Wage Base.
  8. Click the Accounts Affected button, then select Affect liability and expense accounts.
  9. Click OK, then click OK again.

Let's run the report again to review the adjustments.

 

You can reach out to me if you need anything else.

chrisn2
Level 1

adjusting social security/Medicare wages

I have a similar situation.  I recorded a Third Party Sick Pay amount for an employee.  Normally, this is taxable to Federal, Social Security, Medicare, and FUTA tax, but because it was a payment received after 6 months of the illness, it is only taxable for Federal purposes.  When I added the income, I zeroed out the Social Security and Medicare taxes both on the employer and on the employee side, but the wages are still showing on the taxable line of the 941 for this quarter.  How can I change the wage base for Social Security and Medicare for this employee.  I need to reduce the amount of her SS/Med taxable wages so her W2 is correct at year end and so the 941 wages are correct on the report.

GlinetteC
Moderator

adjusting social security/Medicare wages

Let me welcome you first in the Community, chrisn2.

 

I'm here to help you with adjusting your employee's Social Security and Medicare so you'll have the correct 941 and W-2 reports.

 

Let's make sure to modify the amount of the adjustment for SS and Medicare both employer and employee, then add the taxable wage. Doing this will give us the deducted taxable wage for Social Security and Medicare for your employee. Here's how:

  1. Go to the Employees menu.
  2. Click Payroll Center.
  3. Select the Payroll tab and go to Pay Liabilities.
  4. Under the Other Activities section, select Adjust Payroll Liabilities.
  5. Enter the Date and choose Employees.
  6. Under Taxes and Liabilities, select Social Security Company, then enter the Amount and Wage Base.
  7. In the next line item, select Medicare Company, then enter the Amount and Wage Base.
  8. Click the Accounts Affected button, then select Affect liability and expense accounts.
  9. Click OK, then click OK again. 

I've added a screenshot for your reference:

 

Once done, let's pull up the report again to verify the adjustments. 

 

I've also added these articles about wage base and tax adjustments for your reference:

I'd appreciate it if you'll update me on how this turns out. I want to make sure this is taken care of.

chrisn2
Level 1

adjusting social security/Medicare wages

I received a response from GlinetteC (Moderator) and am just writing a note

of thanks.  Your instructions worked well and my issue is resolved.  I appreciate

your help!

MorganB
Content Leader

adjusting social security/Medicare wages

It's great to hear my colleague was able to help out and that you found the answer you needed here in the Community, chrisn2! You're always welcome here if you ever need assistance again in the future.

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