2011 Social Security Taxes

[Bill Andrews]

Is PowerChurch planning to release a payroll system upgrade to PowerChurch Online V 11 to recognize the difference in social security rates for individuals and employers in time for the first payrolls generated in 2011? The individual rate is 4.2% and the employer rate is 6.2%. Just got the IRS Notice 1036 which outlines the new payroll rates for 2011.

Bill Andrews

[NeilZ]

Is PowerChurch planning to release a payroll system upgrade to PowerChurch Online V 11 to recognize the difference in social security rates for individuals and employers in time for the first payrolls generated in 2011? The individual rate is 4.2% and the employer rate is 6.2%. Just got the IRS Notice 1036 which outlines the new payroll rates for 2011.

Bill Andrews

Considering that this notice was just released after the passing and signing of the bill on Monday, the guys at Powerchurch probably saw it the same time you did.

That said, I fully expect that they will have an update to handle this change by the required implementation date of Jan 31st 2011, if not sooner.

[Jeff]

An update to PowerChurch Plus is not required to handle the new split social security rate. Just go to payroll-> setup -> Maintain Tax Tables. Add a new Federal: Social Security tax table for 4.2%. You will need to change each employees social security item to use this new table. The employer portion of social security will continue to use the existing tax table at 6.2%.

There will need to be changes to the 941 by the end of March 2011 to handle a different percentage between employee and employee rates. I just looked and as of right now (12/22/2010) the 941 has not been updated yet.

Here is a link to the updated rates for 2011 http://www.irs.gov/pub/newsroom/notice_1036.pdf.

[NeilZ]

OK .. I'm 2 for 2 today ... I thought there would be a way to do that, and totally missed the ADD button on the Maintain Tax Tables ...

[Zorak]

The Federal tax Knowledge Base article was updated yesterday

http://www.powerchurch.com/support/kb/k ... cle_id=143

[Bill Andrews]

I have sucessfully added the new tax table for the employer SS taxes. Will this be picked up correctly by the payroll program for the Employer SSI Item (currently 940) or will I need to add a new Item Description that will pick up the correct rate from the new Tax Table I added?

Bill Andrews

[Zorak]

As long as your tax type (social security) is correct, you will be able to assign the new social security table to your old deduction items.

[tborgal]

Why not just update the percentage in the current tax table for FICA?

[Zorak]

Because the employee processes at 4.2% and the employer is still 6.2%.

[Bill Andrews]

We use Online version 11. I set up a new tax table for Employer Social Security Taxes with the 6.2% rate. in looking at the pay items, 940 is the number assigned to Employer SSI for which the tax type is identified as Social Security. I cannot see a way to associate pay item 940 to the new Employer SS Tax table and I don't understand how it will do so automatically. Please help me understand.

Bill Andrews

[tborgal]

I already have two tables set up for FICA. I thought everyone had it that way, so I guess I was one step ahead.

[tborgal]

I just went crazy trying to figure out where the Tax Table was attached to the Item Description and found it at the employee pay items level. Why is it there and not in the Item Description setup window. It does not seem to be the most logical place to put it.

[Jeff]

For some taxes, like federal witholding, the tax table will differ by employee. For example, federal withholding has one rate for married employees and another for single employees. In NC, we have different tables for single, married, and head of household employees.

[NeilZ]

Might be a good idea to make this a sticky topic, either here or in the Accounting Forum.

[tborgal]

For those of us with bad memories it might be a good idea to put a reference to how tax tables are attached to item descriptions in the item description setup window. I obviously must have done this when I set up V11 but I don't remember doing it.