Our final pay period for 2012 ended on Dec 28 and so the payroll calculations were done using 2012 withholding rates. However, the ACH process was done on Jan 2, 2013.
It occurred to me when we did our first quarter 941 report that things weren't matching up.
Does anyone know how this should be handled? Do I need to go back and withhold more SS money from each employee or is there a special way of reporting when this kind of timing happens? My guess is that IRS doesn't care about payroll boundaries and is only concerned with when the money was paid to the employees.
thanks for any insight.
Debbie
Which SS rate to use?
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Matt
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Re: Which SS rate to use?
Withholdings should be calculated based on the date the wages are actually paid to the employees, not the pay period end date. Since these wages were paid to the employees on Jan 2, 2013 then the 2013 withholding rates should have been applied.
To correct this you should withhold the additional 2% SS tax from the Jan 2 check from the employees next check. Assuming you included the payroll paid on Jan 2 in the 1st quarter 2013 Form 941 submission then you have already paid this additional amount to the IRS. All things being equal, this would have created a negative balance in the Accounts Payable account for the SS tax withholding. Taking out the additional withholding on the employees next check will correct this negative balance. It will also help ensure that the sum of the employee's W-2's for 2013 agrees with the sum of the four Form 941 submissions for 2013.
To correct this you should withhold the additional 2% SS tax from the Jan 2 check from the employees next check. Assuming you included the payroll paid on Jan 2 in the 1st quarter 2013 Form 941 submission then you have already paid this additional amount to the IRS. All things being equal, this would have created a negative balance in the Accounts Payable account for the SS tax withholding. Taking out the additional withholding on the employees next check will correct this negative balance. It will also help ensure that the sum of the employee's W-2's for 2013 agrees with the sum of the four Form 941 submissions for 2013.
