A former employee came back to work with us during this last quarter. Somehow the medicare box under the tax tab became unchecked and no medicare taxes were withheld. This is reflected on his W2 and the draft 941. How can I correct this to make everything match for yearend?
It's nice to see you in the Community. Allow me to help and walk you through in correcting the employee's Medicare withholding tax.
To start, let's make sure to select Medicare in the employee's profile.
From the Employees menu, select Employee Center.
Double-click the name of the employee.
On the left pane, select the Payroll Info tab.
At the top right, click Taxes.
Click the Federal tab.
Put a check on the Medicare box.
After that, you can make a positive liability adjustment to the Medicare Company and Medicare Employee payroll items. To get the amount of the adjustment, multiply the paycheck's wage base and the Medicare's rate. Example: Total Earnings x 1.45%.
If the employer is going to Cover this as Wages or any expense, that is further Taxable income to them, so the Adjustment function would not be used; it needs to be on a 2018 paycheck as taxable Bonus.