Sage 100

Customer has an Earnings code that is set up to NOT be subject to federal or state withholding and he has used it for years (year end vehicle use allowance) but now that he is at 4.5, it is calculating both federal and state withholding. He can set it up for manual taxes and change the withholding amounts but he would rather not have to do so. Anyone else seen this?

DFDM the settings for that earnings code to verify the not subject status. Or try selecting, saving the settings, then deselect and save again. Very stange...

Customer just left me a voicemail saying he figured it out and it all makes sense. The employees have override W/H amounts set up! He signed off by saying, ""Oh yeah, I'm an idiot.

Still it is a bit strange for MAS to be withholding taxes on a non taxable earnings code..........

But an override IS an override...

Oh sure, take Sage's side!

If the customer accepts it, I accept it....

If the earnings code is set up not to be subject to fed w/h then won't the w-2 be incorrect if it is subject to tax. (i.e. if the client wants the amount to be subject to tax, but just not withhold anything)?

Yes, I thought vehicle use was a taxable earnings code fringe (at least it is for my clients) offset by a fringe deduction code...

These are the codes that come back in year to bit you when the customer claims you gave them tax advice and now they have a penalty.

He didn't ask me about the taxability, only about how to make it work in 4.5. And I don't offer advice about tax issues - I always tell them to check with their CPA.