In/Out Checks for prior year before w-2s processed

SOLVED

I have closed my year end for payroll (2014).  I haven't filed the year-end reports nor have I printed w-2's.  I forgot that I needed to process a zero check (in/out check) for non cash auto fringes for 4 employees.  I am going to post them as 12/31/14 but my question is about the taxes.  Obviously the FICA taxes have to be held but now that that we are in January 2015 how will those taxes process?  I still have time to make my tax deposits but how would you handle the taxes that the EMPLOYEE would owe?  Obviously I cannot deduct them from his next 2015 check.  Would the employer have to pay those taxes?

Any ideas, suggestions would be greatly appreciated as I am not quite sure where to go from here.

Thanks,

LS

  • 0
    verified answer

    I am assuming U.S.A. FICA tax:  You'll have to include the amount of the employee's portion of tax in the gross wages of the in/out check so that you can deduct the employee's portion.  I call it "grossing up" the deduction amount.  Assuming the rates are as follows:  6.2% SOC and 1.45% MEDI; 100 - 6.2 - 1.45 = 92.35.  If the non cash auto fringe is $250; ($250 / 92.35) * 100 = $270.71.  You would pay gross wages of $270.71.  Of the $270.71: $16.78 SOC WH, $3.93 MEDI WH, $250 FRINGE WH, NET = 0.  Hope this helps!

  • 0 in reply to Rhonda V

    Thanks, this did help and I was thinking this would be the way to handle it but not sure.  Thanks for explaining the formula too!

    LJS

  • 0 in reply to LJS

    Another option would be to use a reimbursement pay ID or misc deduction to offset the amount of employee taxes. If you need to recover the costs, you are able to adjust a future check using the same pay ID or deduction (in reverse). Knowledgebase article 21651 "How can I add additional Federal Withholding tax without affecting the taxable, subject-to, or gross pay amounts?" walks through the steps to set up and use both options.