I'm here to provide some insight on your question regarding Simple IRA contributions.
As per instructions from IRS, QuickBooks recognizes Simple IRA as tax-deferred. This means that deducted amounts are exempt from federal and state income tax withholding when processed through payroll.
However, they're still subject to Social Security and Medicare taxes. Amounts withdrawn from this plan, after retirement, are subject to income taxes. Detailed information on this plan is available on the Types of Retirement Plans page on the IRS website.
I hope this response finds you with a smile. Please know that I'm always here to provide help and answer any questions that you may have about IRA contributions and how QuickBooks handles it.
I have an employee who contributes a 15 percent into their Simple IRA. This payroll I just ran (3rd payroll of 2019) changed the amount on the same salary as the rest of the year and only calculated approximately 14.78%.
Has anyone seen this or know why this happened?
Thanks for posting here in the Community, @Manyhats.
Allow me to share some insights about this Simple IRA concern.
We currently have an ongoing issue wherein Simple IRA contributions are not calculating correctly when payroll. Our developers are not diligently working to get this fix in a timely manner.
For now, I'd suggest reaching out to our Customer Care Team so you'll be added to the list of the affected users. This way you'll be able to receive email notifications about the updates of the issue.
You can reach them through the contact information through this link: Contact the QuickBooks Online Customer Support team.
Thank you for your patience while this was being worked on. Please know that the Community has your back should you have any questions.
It seems that you have posted the same question, twice. My colleague, @Alessandra_B, already shared her answer to your concern.
If you haven't yet, you can check her answer through this link: https://quickbooks.intuit.com/learn-support/en-us/other-questions/re-retirement-plan-report/01/34549...
In case you need some tips and related articles, you can visit our QuickBooks Online Payroll Help Articles page for your future reference.
If there's anything else that I can help you with, please let me in the comment section down below. I'll be always around ready to help.
We want this resolved as much as you do, jenniha.
For now, we don't have a specific date when this will successfully be fixed. Although, I can assure you that our developers are working harder for a solution.
By following the workaround provided, you'll be able to correct the IRA contribution amounts on the paychecks. Though it can be time-consuming, it's temporary until everything will be good.
Please let me know if you have other concerns. I'm looking forward to assisting you again.
I saw the Simple IRA contribution issue also and contacted the support team. They put me on the list to get updates.
In QBO, the SImple IRA deferral is calculating as gross minus Section 125 times %, and the employer contribution is calculating as gross pay times %.
According to the IRS, they should be gross pay minus Section 125 times %.
But customer support told me that it should be gross times %,
Which calculation is QBO trying to fix?
I'm scared they won't fix it the right way.
Desktop is doing both as gross times %.
Now I have to go into all my clients that have Simple IRAs and make sure the calculations are correct.
I'm changing to a fixed amount on both the deferral and contribution, but agree it is time consuming to have to do that for hourly.
Thanks for sharing your concern with us, @Kimithaw.
I've got some clarifications to share the simple IRA contribution calculation in QuickBooks Online.
QuickBooks is dependent on the regulations published by your agency. That being said, our developers are diligently working to be compliant with the IRS. They're constantly finding ways to affix permanent resolution to this issue.
In this case, rest assured that you'll be able to receive updates about the current status of the investigation, since you've reached out to our Customer Care Team.
I appreciate your patience while this is being worked on.
Additionally, if you have any concerns that deals with "How do I" questions in QuickBooks Online, you can always check out these resources below:
As always, you can reach back out to me if you have any other queries about this. I'll be around to lend a helping hand. Have a good one!
"Diligently working" ? This issue has been outstanding for over 5 months and what is worse is that you are not communicating to your customers that this is an issue, instead waiting for them or their clients or employees to discover this!
Hello there, Nathanfun.
I appreciate you taking the time to ask for updates. Together with my colleagues above, I assure you that our engineers are working on implementing the updates soon.
Our engineering team is aware of the issue and is currently testing fixes. For now, you can manually edit the check to make the Company Contribution match the deduction or use the amount method.
If I hear of any changes about the system requirements, I will be sure to post the details here in the Community.
We appreciate your patience. Stay tuned for updates. Should you have other payroll concerns, please let me know and I'll be here to help.
I assume this has not been changed yet? We are working on setting online payroll up and notice the same thing regarding the employee portion being calculated after Section 125 items.
The Simple IRA item is supposed to be calculated after a Prem 125 item is deducted from the gross pay. As per IRS (https://www.irs.gov/retirement-plans/simple-ira-plan-faqs-compensation), "Compensation doesn’t include amounts deferred under a section 125 cafeteria plan".
In Quickbooks, when a Simple IRA item is set up to calculate on a percentage, it calculates directly from the gross pay even if there's a Prem 125 item.
You'll want to reach out to our Payroll Specialist so they can further check your payroll setup. The new "Help" menu interface:
For the old "Help" menu:
Also, you'll want to check this article about supported pay types and deductions: Supported pay types and deductions explained.
Post again here if you have more questions. I'll be here!