Additional Medicare Tax User Guide for QuickBooks

With the new Medicare, Affordable Care Act, beginning tax year 2013 a new additional Medicare Tax of 0.9 percent applies to the individuals’ Medicare taxable wages, compensation or self-employment income that exceeds certain threshold amounts based on their filing status.

How does that impact you?

Beginning January 1, 2013, employers are responsible for withholding the Additional Medicare Tax from Medicare taxable wages and compensation paid to an employee in excess of $200,000 in a calendar year. In December 2012, Intuit released a new Payroll Update (21301) that included support for a new payroll tax item, Medicare Employee Addl Tax. If you pay wages in 2013 or later to employees who are subject to Medicare tax (regardless of whether you think you will ever pay any of them over $200,000), you must set up this new payroll tax item. This lets QuickBooks handle tracking, calculating, withholding, and reporting the Additional Medicare Tax appropriately and automatically so you don’t have to worry about if or when to apply it!

So what do you need to do?

Setting up the new payroll tax item, Medicare Employee Addl Tax, is simple and should be done before you create any paychecks in 2013!

1. Be sure you’ve downloaded the latest Payroll Update (21304 or later for the payroll tax item; 21308 or later for Form 941).
2. Open Payroll Setup and then close it in order to automatically set up the new Medicare Employee Addl Tax payroll tax item and attach it to the employee records of existing employees who are subject to Medicare.
3. Set up employee defaults so that the Medicare Employee Addl Tax payroll tax item is automatically attached when you add new employees who are subject to Medicare.

Once you set up the payroll tax item, QuickBooks reports the Additional Medicare Tax on2013 Form 941 and will report on Forms 944, 943, and W-2 if the IRS requires reporting on those forms.

For more information visit this link: http://http-
download.intuit.com/http.intuit/CMO/payroll/support/PDFs/Misc/MedicareAddl_UserGuide.pdf


Got a QuickBooks Mess? Call The QuickBooksGal at 775-348-9225

Comments

  1. Dena MartinNovember 18, 2013 at 12:35 PM

    I need your help! I have an employee that is at $308,000 YTD. He just consulted with his CPA and was told that an employee filing as "Married Filing Jointly" is supposed to start paying the .9% at $250,000 as opposed to $200,000. We calculated that QB has charged him the additional tax starting at $200K even though his employee file is marked as "Married". How can I fix this or have you heard if QuickBooks is working on a fix?

    ReplyDelete

Post a Comment

Popular posts from this blog

How to "Un" Apply Credits In QuickBooks

Image
Got a QuickBooks Mess? Call The QuickBooks Gal! Welcome to the QuickBooks Minute. I’m Jayne Miller, the QuickBooks Gal Recently, one of our Reno QuickBooks customers asked about "unapplying" credits in QuickBooks. While there are nicely labeled apply credits buttons, there are none marked unapply. This is the case for both customers (invoicing) and vendors (paying bills). So here is how it is done: For customers, it is a fairly easy process. Go to the invoice to which the credit was applied. Then click on the "Apply Credits" button. In the lower half of the new window that pops up is a list of Previously Applied Credits. Simply find the one, or ones you wish to unapply and click on the check mark next to it to make the check mark disappear. The credit will no longer be applied or tied to that invoice. For Vendors, i.e. bill payments, it is not as clean and simple. The only way to unapply a credit in such a case is to Delete the credit. You can then
Read more

QuickBooks Password Protection

QuickBooks now requires your employees to enter a password to view their pay stubs when you e-mail them. QuickBooks generates the passwords automatically; each password consists of the first four letters of the employee's last name followed by the last four digits of their Social Security number. Examples Name:                            SSN:                         Pay Stub Password: Ben Narramore              855-56-4545             narr4545 Deb D'Spain                  782-34-3419             dspa3419 Jimmy Wu                     903-88-7465             wu7465 Note that all characters must be entered in lowercase and punctuation characters are not included in the password. When a last name has fewer than four characters, the whole last name is used (like in wu above) but no additional characters are added. You will need to inform each employee of this new password requirement
Read more

Employee Salary/Wage Rate Report

Image
Welcome to another QuickBooks Gal Minute. I'm Jayne Miller, The QuickBooks Gal. Do you need to produce a report by Employee that lists only Employee Name and Wage Rate? In QuickBooks that's easy! Here's how to modify a standard report to include the data you want to report. In the top tool bar, select Reports Select Employees & Payroll Select Employee Contact List from the drop-down list Once inside the report, select Modify Report in the report tool bar In the "column" section, remove the check marks from the information choices you don't need. In the "column" section, place a check mark next to "Employee" In the "column" section, place a check mark next to "Earnings/1 Rate" This will customize the report to include only employee names & salary/wage amounts. As you explore the Modify window, you will find that there are many useful information options you can use to create really great custom reports...by the
Read more