W2 - Box 4, Box 6 incorrect

[Pops]

For at least the second year now, we have had to manually edit the system-generated W2 forms. As generated, the FICA withholdings in Box 4 (SSI withholding) and Box 6 (Medicare withholding) were incorrect for some non-minister employees. The only non-minister W2 that was correct this year was a temp that works when our secretary is out. For the incorrect W2's, Box 4 is reported as the total of Box 2 + the actual amount withheld for Box 4; Box 6 is reported as the total of Box 2 + the actual amount withheld for Box 6.

Incorrect example:
Wages (Box 1, 3, 5) = 3507.74
Fed W/H (Box 2) = 600.00
SS W/H (Box 4) = 817.46
Medicare W/H (Box 6) = 650.90
Payroll item summary Fed W/H = 600.00
Payroll item summary SS W/H = 217.46
Payroll item summary Medicare W/H = 50.90

The only non-minister W2 that was correct was the temp staffer, who had no Federal W/H last year. Had there been, I assume that W2 would have been incorrect also.

Below is a breakdown of the payroll items for the affected employees:
Income payroll items are set as "Taxable," enabled on employee Pay Items tab.
Item 900, Federal Withholding, enabled.
Item 920, Employee SSI, enabled.
Item 921, Employee Medicare, enabled.
Item 940, Employer SSI, enabled.
Item 941, Employer Medicare, enabled.

Does anyone have an idea why the Federal Withholding would be added to the SSI and Medicare withholding reported on the W2?

Thanks.

[Pops]

I was about to post this as a separate question as I thought it was a separate issue. But then I realized the two minister W2's are also incorrect in the same way as non-minister W2's. For each, Box 3, SSI Wages, and Box 5, Medicare wages, are blank. Box 2, Federal withholding, is correct. Box 4, SSI withholding, and Box 6, Medicare withholding, each contain the same amount as Box 2. So it appears the same thing is happening for minister W2's - Box 2 is added to Box 4 and Box 6.

[NeilZ]

I was about to post this as a separate question as I thought it was a separate issue. But then I realized the two minister W2's are also incorrect in the same way as non-minister W2's. For each, Box 3, SSI Wages, and Box 5, Medicare wages, are blank. Box 2, Federal withholding, is correct. Box 4, SSI withholding, and Box 6, Medicare withholding, each contain the same amount as Box 2. So it appears the same thing is happening for minister W2's - Box 2 is added to Box 4 and Box 6.

The minister wages and withholding for SS & Medicare SHOULD be blank. They should not have Social Security or Medicare taken out of their salary. As ministers they are considered SELF EMPLOYED for SS & Medicare, thus they pay SECA tax. They either pay a quarterly deposit to the IRS, or they should have extra taken out as FITW.

[NeilZ]

For at least the second year now, we have had to manually edit the system-generated W2 forms. As generated, the FICA withholdings in Box 4 (SSI withholding) and Box 6 (Medicare withholding) were incorrect for some non-minister employees. The only non-minister W2 that was correct this year was a temp that works when our secretary is out. For the incorrect W2's, Box 4 is reported as the total of Box 2 + the actual amount withheld for Box 4; Box 6 is reported as the total of Box 2 + the actual amount withheld for Box 6.

Incorrect example:
Wages (Box 1, 3, 5) = 3507.74
Fed W/H (Box 2) = 600.00
SS W/H (Box 4) = 817.46
Medicare W/H (Box 6) = 650.90
Payroll item summary Fed W/H = 600.00
Payroll item summary SS W/H = 217.46
Payroll item summary Medicare W/H = 50.90

The only non-minister W2 that was correct was the temp staffer, who had no Federal W/H last year. Had there been, I assume that W2 would have been incorrect also.

Below is a breakdown of the payroll items for the affected employees:
Income payroll items are set as "Taxable," enabled on employee Pay Items tab.
Item 900, Federal Withholding, enabled.
Item 920, Employee SSI, enabled.
Item 921, Employee Medicare, enabled.
Item 940, Employer SSI, enabled.
Item 941, Employer Medicare, enabled.

Does anyone have an idea why the Federal Withholding would be added to the SSI and Medicare withholding reported on the W2?

Thanks.

Frankly, I suspect that you have the tax Payroll Item Descriptions setup incorrectly as no one else has reported any problem with the W2 in this way.

I'd make sure that the Federal Withholding Item (900 is the default) is set as a Tax Type of Federal Withholding. That the items 920 & 940 are setup as a Social Security tax type, and 921 & 941 as Medicare.

[Pops]

I was about to post this as a separate question as I thought it was a separate issue. But then I realized the two minister W2's are also incorrect in the same way as non-minister W2's. For each, Box 3, SSI Wages, and Box 5, Medicare wages, are blank. Box 2, Federal withholding, is correct. Box 4, SSI withholding, and Box 6, Medicare withholding, each contain the same amount as Box 2. So it appears the same thing is happening for minister W2's - Box 2 is added to Box 4 and Box 6.

The minister wages and withholding for SS & Medicare SHOULD be blank. They should not have Social Security or Medicare taken out of their salary. As ministers they are considered SELF EMPLOYED for SS & Medicare, thus they pay SECA tax. They either pay a quarterly deposit to the IRS, or they should have extra taken out as FITW.

Yes, I agree wages and withholding for SS & Medicare should be blank. I am one of the ministers and am aware of my SECA status. My point was that I thought it was a separate, different issue but then realized it was really the same issue as all the other incorrect W2's - Box 2 is being added to Box 4 and Box 6. Since Box 4 and Box 6 should be blank, they are showing the same amount as Box 2 due to their being added together (Box 4 = Box 2 + 0.00; Box 6 = Box 2 + 0.00).

[Pops]

...

Frankly, I suspect that you have the tax Payroll Item Descriptions setup incorrectly as no one else has reported any problem with the W2 in this way.

I'd make sure that the Federal Withholding Item (900 is the default) is set as a Tax Type of Federal Withholding. That the items 920 & 940 are setup as a Social Security tax type, and 921 & 941 as Medicare.

Those items are set as you described. That's what has me puzzled. Everything appears to be set correctly, and I can't think of any reason for the W2's to be incorrect.

[NeilZ]

...

Frankly, I suspect that you have the tax Payroll Item Descriptions setup incorrectly as no one else has reported any problem with the W2 in this way.

I'd make sure that the Federal Withholding Item (900 is the default) is set as a Tax Type of Federal Withholding. That the items 920 & 940 are setup as a Social Security tax type, and 921 & 941 as Medicare.

Those items are set as you described. That's what has me puzzled. Everything appears to be set correctly, and I can't think of any reason for the W2's to be incorrect.

There has to be something that is adding that amount to those boxes, its not a program issue, so I'd go over each Item Description and each Pay Item to make sure that they're all setup correctly.

I'd run the 941 reports for each quarter to see what they have to say also. If all else fails, you may have to call powerchurch directly as there may be an issue with one of the files being corrupted in some way.

[Pops]

I opened a support ticket and it's all fixed now. Kudos to Tech Support. There was a bug in v11 that had been fixed about the time we upgraded to v11.55. Somehow in the upgrade the corrupted data from the bug didn't get cleaned out. It sounds like it was a timing issue maybe. All it took was a manual correction to the database.

Thank you too for your help, Neil.

[NeilZ]

I was thinking it was data corruption, good to hear that they were able to fix the file.