FICA calculation in PC and IRS

[jordan2k510]

PC is calculating more tax than is required by the IRS. I have checked all percentages in PC tables and they are correct. Payroll is twice a month. I am using V11. What is the preferred method to reconcile PC to the IRS 941 calculation?

[NeilZ]

PC is calculating more tax than is required by the IRS. I have checked all percentages in PC tables and they are correct. Payroll is twice a month. I am using V11. What is the preferred method to reconcile PC to the IRS 941 calculation?

Are you using the the ANNUAL tables as shown here: http://powerchurch.com/support/kb/kbvie ... icle_id=14 ??

The system will figure out the correct tax using these tables no matter if the payroll is weekly, biweekly, monthly or annual. Once this is setup properly, the system should then figure the 941 calculation properly.

[Zaina]

Also check if you have 'round to the nearest dollar" checked or not. It will make a difference.

[jordan2k510]

Yes I am using the tables provided by Power Church. MEDICARE Tax Type Medicare Percentage 1.450.
SOCIAL SECURITY Tax Type Social security One for Employer Percentage 6.2% and One for Employee Percentage 4.2%. Last quarter I was .10 cents greater than the 941. This month IO am .13 greater than the 941.

[jordan2k510]

Yes I am using the tables provided by Power Church. MEDICARE Tax Type Medicare Percentage 1.450.
SOCIAL SECURITY Tax Type Social security One for Employer Percentage 6.2% and One for Employee Percentage 4.2%. Last quarter I was .10 cents greater than the 941. This quarter I am .13 greater than the 941.

[tborgal]

This variation is normal due to rounding errors when the percentage is calculated. Line 7 on form 941 is there for this purpose. If you use the 941 form created within PC the difference will be aromatically entered into line 7 of the 941.

[jordan2k510]

Line 7 is blank and would allow me to enter the variance. However, in order to reconcile PC and the IRS form I would be paying more than the IRS requires.

[NeilZ]

Make sure you have Powerchurch setup to only take out FICA and Medicare taxes on the proper income items.

IE: Minister's salary only gets FICA taken out (if they have not opted out of Income Tax withholding)
Any housing allowance is not taxable under FICA, but is under SECA. However, I believe no withholding of any kind should be made on this allowance, as it cannot be tracked for SECA in this way.

[jordan2k510]

yes, this is how I have it.

[NeilZ]

How much off is the IRS form from the Powerchurch calculations ??

[jordan2k510]

13 cents

[jordan2k510]

this quarter

[tborgal]

Are you making payments to the IRS monthly or quarterly?

[jordan2k510]

quarterly

[tborgal]

Now I understand your dilemma. I pay monthly so when the 941 report is generated and I have a difference of a few cents I just report it as such since the IRS already has the money. Maybe someone who pays quarterly and has had this issue can respond with what they have for a solution. Since you have already withheld the money I see no way you can return it to the employees since you don't know which might be over paying. It is also possible that you could actually be off in the opposite direction next quarter unless you pay all employees the same every pay period.

In my opinion, since you can not return the money to the employees I would enter the variance and send the extra 13 cents to the IRS. Otherwise you will be keeping it in the church accounts and the W2's you generate next year will not match with what you have reported and sent to the IRS.