Simple Retirement Percent of Gross

Vandasar · ‎August 28, 2023

Just off a support call with QBO payroll elite support concerning incorrect simple retirement calculations. Employees for one of my clients have medical and vision deducted. The Simple contributions are being multiplied by gross minus the medical & vision deductions. This is incorrect because simple deductions are always from gross compensation. The support rep, Dani, told me that this is due to the order in which the deductions were entered. So since medical and vision deductions were entered first, the system will deduct these before doing the Simple calculation. The fix, she said, was to remove all deductions and add Simple contribution first. When I asked for an escalation because this was not per IRS rules, she said this wasn't possible. Does anyone have any insight on this issue? When did this change? My company reconciles Simple accounts and this has not occurred in the past.

QueenC · ‎August 28, 2023

It's disheartening to hear about the issue you're facing with the Simple retirement calculations in QuickBooks Online Payroll, @Vandasar. Allow me to share some additional information about this.

The calculation of Simple retirement contributions should indeed be based on gross compensation before any deductions, including medical and vision deductions. This is in accordance with IRS rules, which state that Simple contributions should be made to the employee's entire compensation.

Since the system doesn't have an accurate calculation and you mentioned that this is your first time experiencing this, there might be a misconfiguration since there have been no updates released regarding this.

With that being said, you might need to follow the advice given by the support representative and remove all deductions, then add the Simple contribution first. However, it's important to double-check with a tax professional to ensure that we'll meet the IRS guidelines and comply with the correct order of deductions.

However, if the issue persists, you may want to reach out to QBO payroll support again and request further assistance given that they have all the tools required to safely look at your account through screen sharing in order to pinpoint the reason behind the difficulty you've been experiencing. Heres how:

Go to Help (?) then select Contact Us.
Enter your concern, then select Let's talk.
Choose a way to connect with us:
- Start a chat with a support expert.
- Get a callback from the next available expert.

Furthermore, I have provided an article that will assist you in gaining a deeper understanding of the annual limits for retirement plan contributions: Understand retirement plan contribution limits.

If you require additional assistance managing simple retirement contributions, please don't hesitate to reach out to us again. We value your time and are committed to continuously improving our services to better meet your needs. We look forward to serving you in the future.

Vandasar · ‎August 28, 2023

I appreciate the reply. My team and I ran several tests. removing all deductions and adding Simple deduction first does not fix the problem. Looking at one of my clients recently migrated from QB Desktop, the historical data is capturing Simple as it should without the gross being affected by medical and vision. The recent QBO payroll runs in PR Elite show the Simple calculation discrepancies. Also, we did go back to our 2022 Simple reconciliations and found the discrepancies existed last year as well. Without a doubt, QBO has a tax calculation issue that must be resolved if they are to follow IRS rules. A rhetorical question, will QBO payroll be responsible for our clients' employees past missed Simple employee contributions and employer match? When will the issue be resolved?

Kurt_M · ‎August 28, 2023

Hello there, @Vandasar.

We appreciate you responding here in the thread and sharing the troubleshooting method you've tried. Checking here on our end, we currently have no estimated time for when this will be resolved. Know that we value your time reaching out here in the Community space and that you can contact our Customer Care Team so they can get your details, and you'll receive an update regarding this matter. Here's how:

Go to Help (?) then select Contact Us.
Enter your concern, then select Let's talk.
Choose a way to connect with us:

Start a chat with a support expert.
Get a callback from the next available expert.

Moreover, here are some articles to help you modify reports, and keep your current report settings inside the program:

The Community Team has your back if you have any other QuickBooks-related concerns, @Vandasar. Please don't hesitate to comment below or post here again. We'll make sure to get back to you right away. Please don't hesitate to comment below or post here again. We'll make sure to get back to you right away.