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  • 1.  Payroll deduction reimbursement after termination and tax implications

    Posted 11-05-2021 10:08
    Client has a terminated employee that had an insurance deduction take out of their last 2 checks, but they did not choose COBRA, so they now need to pay it back.  Of course the deduction reduced taxes, so they are trying to adjust the deduction, taxes, wages subject to the taxes, but not increase gross wages.  The employee already cashed the checks, so they can't enter a reversal and re-issue.  My initial suggestion was to enter a negative deduction, which will generate a check but doesn't calculate taxes.  We've tried several possible ways of entering this in payroll and cannot get everything to line up properly.  Is there an easy solution that I'm overlooking or will we just need to do manual taxes and adjust the wages subject to taxes using the fix method in the tax summary screen?  Thanks for any ideas!

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    Barb Rippberger
    Technology Integrators
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  • 2.  RE: Payroll deduction reimbursement after termination and tax implications

    Posted 11-05-2021 10:43
    I would practice this in a test company first. Since you owe the employee cash, I would enter a payroll and do manual taxes.  Make the check come out to the amount owed.  Example:

    original check:

    wages 1000.00
    fwt 100.00
    swt 50.00
    FICA 62.50
    med 14.50
    Health Ins  100.00
    cash 673.50

    What it should have been:
    wages 1000.00
    fwt 90.00
    swt 40.00
    FICA 62.50
    med 14.50
    Health Ins  0
    cash 793.50

    You owe the employee 120.00
    FWT was 10 too high
    SWT was 10 too high
    Health Ins was 100 too high

    New check:
    fwt -10.00
    swt -10.00
    Health Ins -100.00
    Cash 120.00











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    Doug Higgs
    Midwest Commerce Solutions, Inc
    (312) 315-0960
    Chauffeur, Chef, and Personal Assistant to Sprinkles
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  • 3.  RE: Payroll deduction reimbursement after termination and tax implications

    Posted 11-05-2021 10:47
    Maybe the FWT and SWT actually should have been more if the health ins reduced the taxes on the original check.  In either case the helath insurance will be more than the taxes so you owe the employee cash.  Adjust the deductions and taxes manually / accordingly.

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    Doug Higgs
    Midwest Commerce Solutions, Inc
    (312) 315-0960
    Chauffeur, Chef, and Personal Assistant to Sprinkles
    ------------------------------

    Original Message


  • 4.  RE: Payroll deduction reimbursement after termination and tax implications

    Posted 11-05-2021 10:48
    Have you checked out the KB article 96467

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    Nancy Hanson
    Blytheco LLC
    Eagan MN
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  • 5.  RE: Payroll deduction reimbursement after termination and tax implications

    Posted 11-05-2021 11:12
    Oooh, this looks promising @Nancy Hanson, thanks!  I'm going to try the zero hours earnings line!​

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    Barb Rippberger
    Technology Integrators
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    Original Message


  • 6.  RE: Payroll deduction reimbursement after termination and tax implications

    Posted 09-28-2022 14:30
    Client having this issue in 2.22.2.  Refunding a pretax deduction.  They have an earnings code with zero hours on first line.  Negative deduction on second line.  PR taxes do not calculate.

    Is there some TLC that I am missing?






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    Jeff Schwenk
    Bottomline Software, Inc.
    (540) 221-4444
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    Original Message


  • 7.  RE: Payroll deduction reimbursement after termination and tax implications

    Posted 09-29-2022 12:09
    The ONLY way I could get this to work is by adding a penny to the earnings line.  Zero did not computer the taxes properly.  One earnings line for a penny and one earnings line for a negative cent did not work either.  Tested in v2.22.3.  No luck there either.  KB 96467 is no longer on available.  Any one know if they "unfixed" it?

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    Jeff Schwenk
    Bottomline Software, Inc.
    (540) 221-4444
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    Original Message


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