I have an employee who is due a bonus. It's huge, over 16k. I tried running a separate bonus for him, but some protocols changed. It will not allow me to zero out the taxes. So, I contacted the help desk, and she showed me how to adjust his federal and NJ pay to zero. This made me nervous because it still showed taxes to Social Security, SUI, Medicare, SDI, and family leave. I questioned the young lady, saying all this is tax-deferred, so no tax should come out. She said I was not correct. He has to pay taxes on this. She promptly asked if I had answered my question, and I told her somewhat yes, and she said she would send me the portion on bonuses and 401k. The first definition that came up was tax deferred, which means NO tax until withdrawn. I am still confused and upset. I tried to put it through his pay this week, and it actually reduced his salary because of all the deductions; increasing his amount will show that he is contributing more to 401K than he actually did. That affects his contribution to the 401 K for the rest of the year. He will reach his maximum sooner than expected. Help?? Has anyone else had this problem, if so what did you do?
