Sage 100

Sage100 2020 with Payroll 2.2. Customer has members and they pay the health insurance portion on Domestic Partners for these members. They want to keep track of these payments in Payroll and issue a W2 at the end of the year since it's considered income. These members are NOT employees so they do not process regular payroll for them, this would be the only Earnings. I setup a new Payroll and tried to set up the Earnings as a Fringe but because there is no regular payroll it is creating a negative check after calculating taxes. I also tried applying an automatic deduction against the earnings but that didn't work either. Is there some special way of setting this up in Payroll? TIA

------------------------------
Kenny Daniel
Technoclarity, Inc.
------------------------------

Disclaimer:
I am not in the business of providing legal or tax advice.
This comment may be completely wrong or contradicted by IRS regulations.

My first thought is if they're not an employee then they don't get a W2 they get a 1099

------------------------------
Wayne Schulz - Schulz Consulting - 860-516-8990
------------------------------

Wouldn't this go on the employee ( member ) W-2? It's unclear from the narrative when you say member whether you mean they are getting a K-1 vs W-2? 
If an employee receives health insurance for themself and can also get it for any partners but that amount is considered taxable - wouldn't the amount go on either the employees W2 as a benefit or on the K-1.

Unless you are in the business of providing tax/accounting advice I recommend you refer them to their tax advisor for the final ruling. I've had a few of these where I casually suggested that a company treat a payroll issue one way and later on the IRS had second thoughts or the company didn't properly implement and subsequently the customer looked to me as if ( for no money ) I had been their tax advisor and should also make the penalty/interest payments for them.

I stay very very far away from providing any legal/tax advice other than consult your legal/tax advisor and then we can help you implement it in Sage.

I've gotten involved with too many customers who don't want to call their CPA and incur a fee, etc, and try to use us as the unpaid CPA which I think is dangerous because frequently I found that I didn't have the full picture.

------------------------------
Wayne Schulz - Schulz Consulting - 860-516-8990
------------------------------

Thanks Wayne. Basically, they are a Health and Welfare Union Fund paying medical and insurance payments on behalf of their union members. It was actually their CPA that suggested they run the Domestic Partner portion through the Sage100 Payroll. The idea is to simply create a non-cash earning, calculate the taxes and issue a W2 at the end of the year. The only difference between this and other fringes is that there are no other earnings. After the tax is calculated the amount goes into a negative amount. Thanks again for your help

------------------------------
Kenny Daniel
Technoclarity, Inc.
------------------------------

Original Message:
Sent: 07-14-2020 10:44
From: Wayne Schulz
Subject: Domestic Partner Insurance Payments in Payroll

Wouldn't this go on the employee ( member ) W-2? It's unclear from the narrative when you say member whether you mean they are getting a K-1 vs W-2?
If an employee receives health insurance for themself and can also get it for any partners but that amount is considered taxable - wouldn't the amount go on either the employees W2 as a benefit or on the K-1.

Unless you are in the business of providing tax/accounting advice I recommend you refer them to their tax advisor for the final ruling. I've had a few of these where I casually suggested that a company treat a payroll issue one way and later on the IRS had second thoughts or the company didn't properly implement and subsequently the customer looked to me as if ( for no money ) I had been their tax advisor and should also make the penalty/interest payments for them.

I stay very very far away from providing any legal/tax advice other than consult your legal/tax advisor and then we can help you implement it in Sage.

I've gotten involved with too many customers who don't want to call their CPA and incur a fee, etc, and try to use us as the unpaid CPA which I think is dangerous because frequently I found that I didn't have the full picture.

------------------------------
Wayne Schulz - Schulz Consulting - 860-516-8990
------------------------------

Are they grossing it up for the taxes?  The reason it's going negative is there's nothing to take the taxes from.  I'm not recommending grossing up because that's more money out of the employer's pocket, but that's why the system is behaving the way it is.

------------------------------
Mary Jo Krueger
Senior Software Consultant
CLA (CliftonLarsonAllen LLP)
Appleton WI
920-996-1176
------------------------------

Original Message:
Sent: 07-14-2020 11:01
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

Thanks Wayne. Basically, they are a Health and Welfare Union Fund paying medical and insurance payments on behalf of their union members. It was actually their CPA that suggested they run the Domestic Partner portion through the Sage100 Payroll. The idea is to simply create a non-cash earning, calculate the taxes and issue a W2 at the end of the year. The only difference between this and other fringes is that there are no other earnings. After the tax is calculated the amount goes into a negative amount. Thanks again for your help

------------------------------
Kenny Daniel
Technoclarity, Inc.
------------------------------


Original Message:
Sent: 07-14-2020 10:44
From: Wayne Schulz
Subject: Domestic Partner Insurance Payments in Payroll

Wouldn't this go on the employee ( member ) W-2? It's unclear from the narrative when you say member whether you mean they are getting a K-1 vs W-2?
If an employee receives health insurance for themself and can also get it for any partners but that amount is considered taxable - wouldn't the amount go on either the employees W2 as a benefit or on the K-1.

Unless you are in the business of providing tax/accounting advice I recommend you refer them to their tax advisor for the final ruling. I've had a few of these where I casually suggested that a company treat a payroll issue one way and later on the IRS had second thoughts or the company didn't properly implement and subsequently the customer looked to me as if ( for no money ) I had been their tax advisor and should also make the penalty/interest payments for them.

I stay very very far away from providing any legal/tax advice other than consult your legal/tax advisor and then we can help you implement it in Sage.

I've gotten involved with too many customers who don't want to call their CPA and incur a fee, etc, and try to use us as the unpaid CPA which I think is dangerous because frequently I found that I didn't have the full picture.

------------------------------
Wayne Schulz - Schulz Consulting - 860-516-8990

@Mary Jo Krueger No, they are not grossing it up. They pay 529.00 on behalf of the member and that is what should be reported on W2.. I am entering a Fringe Earning of 529.00. Sage is automatically creating a deduction of 529. Taxes are 40.87 (FICA and Medicare only). Check amount becomes negative -40.87.
I don't think it's relevant here but they also pay both portions of FICA and Medicare (81.74)

------------------------------
Kenny Daniel
Technoclarity, Inc.
------------------------------

Original Message:
Sent: 07-14-2020 11:19
From: Mary Jo Krueger
Subject: Domestic Partner Insurance Payments in Payroll

Are they grossing it up for the taxes?  The reason it's going negative is there's nothing to take the taxes from.  I'm not recommending grossing up because that's more money out of the employer's pocket, but that's why the system is behaving the way it is.

------------------------------
Mary Jo Krueger
Senior Software Consultant
CLA (CliftonLarsonAllen LLP)
Appleton WI
920-996-1176
------------------------------


Original Message:
Sent: 07-14-2020 11:01
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

Thanks Wayne. Basically, they are a Health and Welfare Union Fund paying medical and insurance payments on behalf of their union members. It was actually their CPA that suggested they run the Domestic Partner portion through the Sage100 Payroll. The idea is to simply create a non-cash earning, calculate the taxes and issue a W2 at the end of the year. The only difference between this and other fringes is that there are no other earnings. After the tax is calculated the amount goes into a negative amount. Thanks again for your help

------------------------------
Kenny Daniel
Technoclarity, Inc.


Original Message:
Sent: 07-14-2020 10:44
From: Wayne Schulz
Subject: Domestic Partner Insurance Payments in Payroll

Wouldn't this go on the employee ( member ) W-2? It's unclear from the narrative when you say member whether you mean they are getting a K-1 vs W-2?
If an employee receives health insurance for themself and can also get it for any partners but that amount is considered taxable - wouldn't the amount go on either the employees W2 as a benefit or on the K-1.

Unless you are in the business of providing tax/accounting advice I recommend you refer them to their tax advisor for the final ruling. I've had a few of these where I casually suggested that a company treat a payroll issue one way and later on the IRS had second thoughts or the company didn't properly implement and subsequently the customer looked to me as if ( for no money ) I had been their tax advisor and should also make the penalty/interest payments for them.

I stay very very far away from providing any legal/tax advice other than consult your legal/tax advisor and then we can help you implement it in Sage.

I've gotten involved with too many customers who don't want to call their CPA and incur a fee, etc, and try to use us as the unpaid CPA which I think is dangerous because frequently I found that I didn't have the full picture.

------------------------------
Wayne Schulz - Schulz Consulting - 860-516-8990

Have you looked to see if there is another tax rule that applies or create a profile specific to this situation and uncheck the taxes?  Guessing it can't go on the Employee's W2 since Domestic Partner situation.  Can you do it with manual taxes, would that help?  If company is going to pay the Fica, can you do a negative deduction to add back the Fica tax and then subtract the Gross Amount for $0 check?

------------------------------
Nancy Hanson
Blytheco LLC
Eagan MN
------------------------------

Original Message:
Sent: 07-14-2020 11:40
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

@Mary Jo Krueger No, they are not grossing it up. They pay 529.00 on behalf of the member and that is what should be reported on W2.. I am entering a Fringe Earning of 529.00. Sage is automatically creating a deduction of 529. Taxes are 40.87 (FICA and Medicare only). Check amount becomes negative -40.87.
I don't think it's relevant here but they also pay both portions of FICA and Medicare (81.74)

------------------------------
Kenny Daniel
Technoclarity, Inc.
------------------------------


Original Message:
Sent: 07-14-2020 11:19
From: Mary Jo Krueger
Subject: Domestic Partner Insurance Payments in Payroll

Are they grossing it up for the taxes?  The reason it's going negative is there's nothing to take the taxes from.  I'm not recommending grossing up because that's more money out of the employer's pocket, but that's why the system is behaving the way it is.

------------------------------
Mary Jo Krueger
Senior Software Consultant
CLA (CliftonLarsonAllen LLP)
Appleton WI
920-996-1176


Original Message:
Sent: 07-14-2020 11:01
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

Thanks Wayne. Basically, they are a Health and Welfare Union Fund paying medical and insurance payments on behalf of their union members. It was actually their CPA that suggested they run the Domestic Partner portion through the Sage100 Payroll. The idea is to simply create a non-cash earning, calculate the taxes and issue a W2 at the end of the year. The only difference between this and other fringes is that there are no other earnings. After the tax is calculated the amount goes into a negative amount. Thanks again for your help

------------------------------
Kenny Daniel
Technoclarity, Inc.


Original Message:
Sent: 07-14-2020 10:44
From: Wayne Schulz
Subject: Domestic Partner Insurance Payments in Payroll

Wouldn't this go on the employee ( member ) W-2? It's unclear from the narrative when you say member whether you mean they are getting a K-1 vs W-2?
If an employee receives health insurance for themself and can also get it for any partners but that amount is considered taxable - wouldn't the amount go on either the employees W2 as a benefit or on the K-1.

Unless you are in the business of providing tax/accounting advice I recommend you refer them to their tax advisor for the final ruling. I've had a few of these where I casually suggested that a company treat a payroll issue one way and later on the IRS had second thoughts or the company didn't properly implement and subsequently the customer looked to me as if ( for no money ) I had been their tax advisor and should also make the penalty/interest payments for them.

I stay very very far away from providing any legal/tax advice other than consult your legal/tax advisor and then we can help you implement it in Sage.

I've gotten involved with too many customers who don't want to call their CPA and incur a fee, etc, and try to use us as the unpaid CPA which I think is dangerous because frequently I found that I didn't have the full picture.

------------------------------
Wayne Schulz - Schulz Consulting - 860-516-8990

Thanks @Nancy Hanson. I did look at the tax rules, i didn't see anything that might resemble this. I also created a new tax profile for MediCare and FICA withholding only. That's working fine but making the check amount negative. I guess I'm going to have to get creative. Maybe not treat it as a Fringe so that a deduction is not applied against the earnings and then do some manual adjustment in the G/L. I was hoping there was something already in Payroll or someone had done something like this before. Thanks again

------------------------------
Kenny Daniel
Technoclarity, Inc.
------------------------------

Original Message:
Sent: 07-14-2020 12:03
From: Nancy Hanson
Subject: Domestic Partner Insurance Payments in Payroll

Have you looked to see if there is another tax rule that applies or create a profile specific to this situation and uncheck the taxes?  Guessing it can't go on the Employee's W2 since Domestic Partner situation.  Can you do it with manual taxes, would that help?  If company is going to pay the Fica, can you do a negative deduction to add back the Fica tax and then subtract the Gross Amount for $0 check?

------------------------------
Nancy Hanson
Blytheco LLC
Eagan MN
------------------------------


Original Message:
Sent: 07-14-2020 11:40
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

@Mary Jo Krueger No, they are not grossing it up. They pay 529.00 on behalf of the member and that is what should be reported on W2.. I am entering a Fringe Earning of 529.00. Sage is automatically creating a deduction of 529. Taxes are 40.87 (FICA and Medicare only). Check amount becomes negative -40.87.
I don't think it's relevant here but they also pay both portions of FICA and Medicare (81.74)

------------------------------
Kenny Daniel
Technoclarity, Inc.


Original Message:
Sent: 07-14-2020 11:19
From: Mary Jo Krueger
Subject: Domestic Partner Insurance Payments in Payroll

Are they grossing it up for the taxes?  The reason it's going negative is there's nothing to take the taxes from.  I'm not recommending grossing up because that's more money out of the employer's pocket, but that's why the system is behaving the way it is.

------------------------------
Mary Jo Krueger
Senior Software Consultant
CLA (CliftonLarsonAllen LLP)
Appleton WI
920-996-1176


Original Message:
Sent: 07-14-2020 11:01
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

Thanks Wayne. Basically, they are a Health and Welfare Union Fund paying medical and insurance payments on behalf of their union members. It was actually their CPA that suggested they run the Domestic Partner portion through the Sage100 Payroll. The idea is to simply create a non-cash earning, calculate the taxes and issue a W2 at the end of the year. The only difference between this and other fringes is that there are no other earnings. After the tax is calculated the amount goes into a negative amount. Thanks again for your help

------------------------------
Kenny Daniel
Technoclarity, Inc.


Original Message:
Sent: 07-14-2020 10:44
From: Wayne Schulz
Subject: Domestic Partner Insurance Payments in Payroll

Wouldn't this go on the employee ( member ) W-2? It's unclear from the narrative when you say member whether you mean they are getting a K-1 vs W-2?
If an employee receives health insurance for themself and can also get it for any partners but that amount is considered taxable - wouldn't the amount go on either the employees W2 as a benefit or on the K-1.

Unless you are in the business of providing tax/accounting advice I recommend you refer them to their tax advisor for the final ruling. I've had a few of these where I casually suggested that a company treat a payroll issue one way and later on the IRS had second thoughts or the company didn't properly implement and subsequently the customer looked to me as if ( for no money ) I had been their tax advisor and should also make the penalty/interest payments for them.

I stay very very far away from providing any legal/tax advice other than consult your legal/tax advisor and then we can help you implement it in Sage.

I've gotten involved with too many customers who don't want to call their CPA and incur a fee, etc, and try to use us as the unpaid CPA which I think is dangerous because frequently I found that I didn't have the full picture.

------------------------------
Wayne Schulz - Schulz Consulting - 860-516-8990

If the company is paying the employee portion of taxes, that's a benefit and technically is taxable as well.  That's why you should be grossing up the check to include covering the taxes.

------------------------------
Mary Jo Krueger
Senior Software Consultant
CLA (CliftonLarsonAllen LLP)
Appleton WI
920-996-1176
------------------------------

Original Message:
Sent: 07-14-2020 12:44
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

Thanks @Nancy Hanson. I did look at the tax rules, i didn't see anything that might resemble this. I also created a new tax profile for MediCare and FICA withholding only. That's working fine but making the check amount negative. I guess I'm going to have to get creative. Maybe not treat it as a Fringe so that a deduction is not applied against the earnings and then do some manual adjustment in the G/L. I was hoping there was something already in Payroll or someone had done something like this before. Thanks again

------------------------------
Kenny Daniel
Technoclarity, Inc.
------------------------------


Original Message:
Sent: 07-14-2020 12:03
From: Nancy Hanson
Subject: Domestic Partner Insurance Payments in Payroll

Have you looked to see if there is another tax rule that applies or create a profile specific to this situation and uncheck the taxes?  Guessing it can't go on the Employee's W2 since Domestic Partner situation.  Can you do it with manual taxes, would that help?  If company is going to pay the Fica, can you do a negative deduction to add back the Fica tax and then subtract the Gross Amount for $0 check?

------------------------------
Nancy Hanson
Blytheco LLC
Eagan MN


Original Message:
Sent: 07-14-2020 11:40
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

@Mary Jo Krueger No, they are not grossing it up. They pay 529.00 on behalf of the member and that is what should be reported on W2.. I am entering a Fringe Earning of 529.00. Sage is automatically creating a deduction of 529. Taxes are 40.87 (FICA and Medicare only). Check amount becomes negative -40.87.
I don't think it's relevant here but they also pay both portions of FICA and Medicare (81.74)

------------------------------
Kenny Daniel
Technoclarity, Inc.


Original Message:
Sent: 07-14-2020 11:19
From: Mary Jo Krueger
Subject: Domestic Partner Insurance Payments in Payroll

Are they grossing it up for the taxes?  The reason it's going negative is there's nothing to take the taxes from.  I'm not recommending grossing up because that's more money out of the employer's pocket, but that's why the system is behaving the way it is.

------------------------------
Mary Jo Krueger
Senior Software Consultant
CLA (CliftonLarsonAllen LLP)
Appleton WI
920-996-1176


Original Message:
Sent: 07-14-2020 11:01
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

Thanks Wayne. Basically, they are a Health and Welfare Union Fund paying medical and insurance payments on behalf of their union members. It was actually their CPA that suggested they run the Domestic Partner portion through the Sage100 Payroll. The idea is to simply create a non-cash earning, calculate the taxes and issue a W2 at the end of the year. The only difference between this and other fringes is that there are no other earnings. After the tax is calculated the amount goes into a negative amount. Thanks again for your help

------------------------------
Kenny Daniel
Technoclarity, Inc.


Original Message:
Sent: 07-14-2020 10:44
From: Wayne Schulz
Subject: Domestic Partner Insurance Payments in Payroll

Wouldn't this go on the employee ( member ) W-2? It's unclear from the narrative when you say member whether you mean they are getting a K-1 vs W-2?
If an employee receives health insurance for themself and can also get it for any partners but that amount is considered taxable - wouldn't the amount go on either the employees W2 as a benefit or on the K-1.

Unless you are in the business of providing tax/accounting advice I recommend you refer them to their tax advisor for the final ruling. I've had a few of these where I casually suggested that a company treat a payroll issue one way and later on the IRS had second thoughts or the company didn't properly implement and subsequently the customer looked to me as if ( for no money ) I had been their tax advisor and should also make the penalty/interest payments for them.

I stay very very far away from providing any legal/tax advice other than consult your legal/tax advisor and then we can help you implement it in Sage.

I've gotten involved with too many customers who don't want to call their CPA and incur a fee, etc, and try to use us as the unpaid CPA which I think is dangerous because frequently I found that I didn't have the full picture.

------------------------------
Wayne Schulz - Schulz Consulting - 860-516-8990

@Mary Jo Krueger Thanks Mary but I'm not sure I understand . If I gross up the Earning, the fringe Deduction will be increased by the same amount and I'll still end up with a negative check. Sorry, I must be missing something ​

------------------------------
Kenny Daniel
Technoclarity, Inc.
------------------------------

Original Message:
Sent: 07-14-2020 12:58
From: Mary Jo Krueger
Subject: Domestic Partner Insurance Payments in Payroll

If the company is paying the employee portion of taxes, that's a benefit and technically is taxable as well.  That's why you should be grossing up the check to include covering the taxes.

------------------------------
Mary Jo Krueger
Senior Software Consultant
CLA (CliftonLarsonAllen LLP)
Appleton WI
920-996-1176
------------------------------


Original Message:
Sent: 07-14-2020 12:44
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

Thanks @Nancy Hanson. I did look at the tax rules, i didn't see anything that might resemble this. I also created a new tax profile for MediCare and FICA withholding only. That's working fine but making the check amount negative. I guess I'm going to have to get creative. Maybe not treat it as a Fringe so that a deduction is not applied against the earnings and then do some manual adjustment in the G/L. I was hoping there was something already in Payroll or someone had done something like this before. Thanks again

------------------------------
Kenny Daniel
Technoclarity, Inc.


Original Message:
Sent: 07-14-2020 12:03
From: Nancy Hanson
Subject: Domestic Partner Insurance Payments in Payroll

Have you looked to see if there is another tax rule that applies or create a profile specific to this situation and uncheck the taxes?  Guessing it can't go on the Employee's W2 since Domestic Partner situation.  Can you do it with manual taxes, would that help?  If company is going to pay the Fica, can you do a negative deduction to add back the Fica tax and then subtract the Gross Amount for $0 check?

------------------------------
Nancy Hanson
Blytheco LLC
Eagan MN


Original Message:
Sent: 07-14-2020 11:40
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

@Mary Jo Krueger No, they are not grossing it up. They pay 529.00 on behalf of the member and that is what should be reported on W2.. I am entering a Fringe Earning of 529.00. Sage is automatically creating a deduction of 529. Taxes are 40.87 (FICA and Medicare only). Check amount becomes negative -40.87.
I don't think it's relevant here but they also pay both portions of FICA and Medicare (81.74)

------------------------------
Kenny Daniel
Technoclarity, Inc.


Original Message:
Sent: 07-14-2020 11:19
From: Mary Jo Krueger
Subject: Domestic Partner Insurance Payments in Payroll

Are they grossing it up for the taxes?  The reason it's going negative is there's nothing to take the taxes from.  I'm not recommending grossing up because that's more money out of the employer's pocket, but that's why the system is behaving the way it is.

------------------------------
Mary Jo Krueger
Senior Software Consultant
CLA (CliftonLarsonAllen LLP)
Appleton WI
920-996-1176


Original Message:
Sent: 07-14-2020 11:01
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

Thanks Wayne. Basically, they are a Health and Welfare Union Fund paying medical and insurance payments on behalf of their union members. It was actually their CPA that suggested they run the Domestic Partner portion through the Sage100 Payroll. The idea is to simply create a non-cash earning, calculate the taxes and issue a W2 at the end of the year. The only difference between this and other fringes is that there are no other earnings. After the tax is calculated the amount goes into a negative amount. Thanks again for your help

------------------------------
Kenny Daniel
Technoclarity, Inc.


Original Message:
Sent: 07-14-2020 10:44
From: Wayne Schulz
Subject: Domestic Partner Insurance Payments in Payroll

Wouldn't this go on the employee ( member ) W-2? It's unclear from the narrative when you say member whether you mean they are getting a K-1 vs W-2?
If an employee receives health insurance for themself and can also get it for any partners but that amount is considered taxable - wouldn't the amount go on either the employees W2 as a benefit or on the K-1.

Unless you are in the business of providing tax/accounting advice I recommend you refer them to their tax advisor for the final ruling. I've had a few of these where I casually suggested that a company treat a payroll issue one way and later on the IRS had second thoughts or the company didn't properly implement and subsequently the customer looked to me as if ( for no money ) I had been their tax advisor and should also make the penalty/interest payments for them.

I stay very very far away from providing any legal/tax advice other than consult your legal/tax advisor and then we can help you implement it in Sage.

I've gotten involved with too many customers who don't want to call their CPA and incur a fee, etc, and try to use us as the unpaid CPA which I think is dangerous because frequently I found that I didn't have the full picture.

------------------------------
Wayne Schulz - Schulz Consulting - 860-516-8990

The fringe deduction wouldn't change.  You should do manual taxes and the difference would be applied in the tax window.

------------------------------
Mary Jo Krueger
Senior Software Consultant
CLA (CliftonLarsonAllen LLP)
Appleton WI
920-996-1176
------------------------------

Original Message:
Sent: 07-14-2020 14:58
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

@Mary Jo Krueger Thanks Mary but I'm not sure I understand . If I gross up the Earning, the fringe Deduction will be increased by the same amount and I'll still end up with a negative check. Sorry, I must be missing something ​

------------------------------
Kenny Daniel
Technoclarity, Inc.
------------------------------


Original Message:
Sent: 07-14-2020 12:58
From: Mary Jo Krueger
Subject: Domestic Partner Insurance Payments in Payroll

If the company is paying the employee portion of taxes, that's a benefit and technically is taxable as well.  That's why you should be grossing up the check to include covering the taxes.

------------------------------
Mary Jo Krueger
Senior Software Consultant
CLA (CliftonLarsonAllen LLP)
Appleton WI
920-996-1176


Original Message:
Sent: 07-14-2020 12:44
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

Thanks @Nancy Hanson. I did look at the tax rules, i didn't see anything that might resemble this. I also created a new tax profile for MediCare and FICA withholding only. That's working fine but making the check amount negative. I guess I'm going to have to get creative. Maybe not treat it as a Fringe so that a deduction is not applied against the earnings and then do some manual adjustment in the G/L. I was hoping there was something already in Payroll or someone had done something like this before. Thanks again

------------------------------
Kenny Daniel
Technoclarity, Inc.


Original Message:
Sent: 07-14-2020 12:03
From: Nancy Hanson
Subject: Domestic Partner Insurance Payments in Payroll

Have you looked to see if there is another tax rule that applies or create a profile specific to this situation and uncheck the taxes?  Guessing it can't go on the Employee's W2 since Domestic Partner situation.  Can you do it with manual taxes, would that help?  If company is going to pay the Fica, can you do a negative deduction to add back the Fica tax and then subtract the Gross Amount for $0 check?

------------------------------
Nancy Hanson
Blytheco LLC
Eagan MN


Original Message:
Sent: 07-14-2020 11:40
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

@Mary Jo Krueger No, they are not grossing it up. They pay 529.00 on behalf of the member and that is what should be reported on W2.. I am entering a Fringe Earning of 529.00. Sage is automatically creating a deduction of 529. Taxes are 40.87 (FICA and Medicare only). Check amount becomes negative -40.87.
I don't think it's relevant here but they also pay both portions of FICA and Medicare (81.74)

------------------------------
Kenny Daniel
Technoclarity, Inc.


Original Message:
Sent: 07-14-2020 11:19
From: Mary Jo Krueger
Subject: Domestic Partner Insurance Payments in Payroll

Are they grossing it up for the taxes?  The reason it's going negative is there's nothing to take the taxes from.  I'm not recommending grossing up because that's more money out of the employer's pocket, but that's why the system is behaving the way it is.

------------------------------
Mary Jo Krueger
Senior Software Consultant
CLA (CliftonLarsonAllen LLP)
Appleton WI
920-996-1176


Original Message:
Sent: 07-14-2020 11:01
From: Kenny Daniel
Subject: Domestic Partner Insurance Payments in Payroll

Thanks Wayne. Basically, they are a Health and Welfare Union Fund paying medical and insurance payments on behalf of their union members. It was actually their CPA that suggested they run the Domestic Partner portion through the Sage100 Payroll. The idea is to simply create a non-cash earning, calculate the taxes and issue a W2 at the end of the year. The only difference between this and other fringes is that there are no other earnings. After the tax is calculated the amount goes into a negative amount. Thanks again for your help

------------------------------
Kenny Daniel
Technoclarity, Inc.


Original Message:
Sent: 07-14-2020 10:44
From: Wayne Schulz
Subject: Domestic Partner Insurance Payments in Payroll

Wouldn't this go on the employee ( member ) W-2? It's unclear from the narrative when you say member whether you mean they are getting a K-1 vs W-2?
If an employee receives health insurance for themself and can also get it for any partners but that amount is considered taxable - wouldn't the amount go on either the employees W2 as a benefit or on the K-1.

Unless you are in the business of providing tax/accounting advice I recommend you refer them to their tax advisor for the final ruling. I've had a few of these where I casually suggested that a company treat a payroll issue one way and later on the IRS had second thoughts or the company didn't properly implement and subsequently the customer looked to me as if ( for no money ) I had been their tax advisor and should also make the penalty/interest payments for them.

I stay very very far away from providing any legal/tax advice other than consult your legal/tax advisor and then we can help you implement it in Sage.

I've gotten involved with too many customers who don't want to call their CPA and incur a fee, etc, and try to use us as the unpaid CPA which I think is dangerous because frequently I found that I didn't have the full picture.

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Wayne Schulz - Schulz Consulting - 860-516-8990