Amounts Shown on 941 Form

[kirkre]

We have been using PowerChurch Online since January 2014 and are currently trying to complete the quarterly 941 form for the first time from PowerChurch. We have a total of 9 employees, three who are ministers that have not opted to voluntarily have federal taxes taken out. When PowerChurch completes the form, it does not include the three ministers in the number of employees on line 1 (PowerChurch shows only 6 employees) nor does it include their salaries on line 2. Each of the ministers' salaries are listed as "Non-taxable" in the "Tax Options" line in the item descriptions for the payroll items. The system manual refers the user to the "Maintain Item Descriptions" screen to validate the correct entry if the amounts in the 941 information aren't correct. What would need to be changed in the items description screen to have the 941 include the ministers' information?

[NeilZ]

We have been using PowerChurch Online since January 2014 and are currently trying to complete the quarterly 941 form for the first time from PowerChurch. We have a total of 9 employees, three who are ministers that have not opted to voluntarily have federal taxes taken out. When PowerChurch completes the form, it does not include the three ministers in the number of employees on line 1 (PowerChurch shows only 6 employees) nor does it include their salaries on line 2.

Since the ministers are having federal taxes taken out, then the salaries need to be shown as taxable. Unfortunately, since three months have gone by without this having been shown, the system is somewhat out of whack.

If taxes are being taken out, are they being shown as part of the Tax liability? If so, are you doing that manually, and not letting the system calculate the taxes?

Each of the ministers' salaries are listed as "Non-taxable" in the "Tax Options" line in the item descriptions for the payroll items. The system manual refers the user to the "Maintain Item Descriptions" screen to validate the correct entry if the amounts in the 941 information aren't correct. What would need to be changed in the items description screen to have the 941 include the ministers' information?

In order to have the system figure the ministers' salaries as part of the 941, go to each one of the pay items (if they are separately listed) and do the following:

Under Tax Options, you have two choices to make.

1: If you have a state tax and/or local earned income tax, and the ministers are NOT having those taxes withheld, you need to select the More Options selection. You would then check each tax that the salary would have to be reflected under.

For example: if you have a state income tax that is taken out of the other employees taxes, you need to select the More Options and then only check the box next to Federal Withholding.

2: If you do not have any other income tax (state or local) to worry about, then you would just select Taxable under Tax Options.

Either choice will tell the system to start including this income as part of the gross salary total. This will also allow you to use the standard Federal Tax Pay Item to calculate the Federal Withholding.

Now the issue is how to get these amounts in the system to reflect in the 941 and end-of-year W-2s.

My advice is this. Find the check numbers for these ministers. VOID the checks in Payroll. Process Payroll for each paydate for these ministers, and when you're in the Verify Payroll screen of the Process Payroll[/i] module, select the Payment Method of Manual Check and manually enter the check number of the original paycheck. You won't have to print checks, you may want to print the check stubs, but you don't have too.

When it comes time to POST these VOIDs and Manual Checks, select the Post Payroll module from the Payroll menu, on the Post Payroll screen, change the Posting Option to Post to Payroll Module Only. What this will do is update the payroll system, but not create any other transactions. This should fix all payroll system entries.

The reason you're only posting to the Payroll Module is that the original checks have been posted (I'm guessing) in the Funds Accounting system, and since all the amounts should remain the same, there really is no need to change anything in Funds Accounting. All you really need to do is update the Payroll Module totals.

You should then be able to see what you need when you run the 941 report.

As always, I recommend you do a full backup (or at least an accounting backup) using the Powerchurch backup utility prior to doing any changes such as this. Always give yourself a way to back out of any change, if necessary.

[kirkre]

The ministers do not have federal taxes taken from their salaries by the church. They are filing their own federal taxes and we do not have a state income tax.

[NeilZ]

The ministers do not have federal taxes taken from their salaries by the church. They are filing their own federal taxes and we do not have a state income tax.

OK .. then they are filing as employees, but paying quarterly payments, I misread your initial post.

I did a search in the Accounting forum for Minister Salary to see if there was a better explanation on how to setup PCPlus for this and came across this from Matt, it is very detailed:

https://www.powerchurch.com/forum/viewt ... ary#p33820

You could skip the part about having to refile as that pertains more to the person who originally made the post. That said, once you set this up the way Matt describes, I would do the part about VOIDing and running new Payroll for those ministers that I described previously to get the system corrected for your future 941s and W-2s.

[kirkre]

The reference posting you gave me corrected the 941 numbers when we made the corrections using the "More Options" adjustments. Thanks again for your timely and very helpful assistance.

[NeilZ]

The reference posting you gave me corrected the 941 numbers when we made the corrections using the "More Options" adjustments. Thanks again for your timely and very helpful assistance.

Glad to hear.