Variations of this problem have been popping up everywhere, as it often does when changes are made to the payroll tax percentages and limits. I wrote this up to answer one of the forum posts, so I thought I would brush it off and publish it.
Here was the scenario:
The company had downloaded the 2013 payroll tax tables and processed 2013 payroll, but neither closed 2012 payroll nor installed the year end update for 2012.
Now they need to close 2012 payroll and then return to processing 2013 payroll. Here’s what I would do to get back on track.
1. Download and install the January hotfix of Dynamics GP 2010, this includes the year end tax update (as well as a hot fix). The current build is 11.00.2164. It was released 01/24/2013. Be sure you have a backup, this will require a table update. Backup your forms and reports dictionaries and create package files for all of your modifications.
2. Open the Payroll Tax Tables window and change your FICAS tax code to a wage limit of $110,100 and a rate of 4.2%
a. To open the Payroll Tax Tables window follow the instructions below.
b. Navigate to: Administration | Setup | System | Payroll Tax.
c. Select the FICAS tax code, select the Apply Tax Table item and click the Filing Status button.
d. Select the NA filing status and click the Tables button
e. Edit the table rates and change the But Not Over column to $110,100 and the Tax Rate column to 4.2% and then click the OK button.
3. Click Save on the Payroll Tax Filing Status window.
4. Click Save on the Payroll Tax Setup window.
5. Now, your going to remove the extra Medicare Tax for the high income earners.
a. In the Payroll Tax Setup window select the Tax Code FICAM, Apply Tax Table, and then click the Filing Status button.
b. Select the NA filing status and click the Tables button
c. To remove the second row in the table, place your cursor in the second row, choose Edit from the menu bar and then Delete Row.
d. Now you need to adjust the first row's maximum wage by entering $999,999,999.99 in the But Not Over column. Click OK to save and close the window.
6. Click Save on the Payroll Tax Filing Status window.
7. Click Save on the Payroll Tax Setup window.
8. Change the user date to 12/31/2012 (anything in 2012 will do)
9. Create the year end wage file (close payroll).
10. Make sure you’re happy with the W-2 amounts.
11. Load the 2013 tax tables using the Payroll Tax Updates wizard
12. Check to make sure the FICAS amounts reset to a wage limit of $113,700 and a rate of 6.2%
13. Check to make sure the FICAM table includes the 2.35% extra for wages over $200,000.00.
14. Don't forget to set the User Date back to the right date to process 2013 payroll!
That should get you fixed back up.
Until next post!