W2s V11

[FBCMoyock]

I just started using V11. I am testing my payroll setup. What I have found is:
Pastor's Salary: Tax Options - More options/Selected Federal Tax and State Tax
On Pay Items no taxes are assigned
Checked 941 - Salaries for all staff totaled correctly
Salaries for Non-Pastoral staff totaled correctly for SS & MC taxable wages
Checked W2
For Pastors nothing appears in the State blocks at all - No State ID, Tax number or Wages
Support staff reports correctly.

Any suggestions.

[NeilZ]

I just started using V11. I am testing my payroll setup. What I have found is:
Pastor's Salary: Tax Options - More options/Selected Federal Tax and State Tax
On Pay Items no taxes are assigned
Checked 941 - Salaries for all staff totaled correctly
Salaries for Non-Pastoral staff totaled correctly for SS & MC taxable wages
Checked W2
For Pastors nothing appears in the State blocks at all - No State ID, Tax number or Wages
Support staff reports correctly.

Any suggestions.

Is this a new installation, or an upgrade and you just ran the Payroll migration wizard ??

[Jeff]

Do pastors have state income tax withheld form their checks?

[NeilZ]

Do pastors have state income tax withheld form their checks?

AFAIK ... They can request withholding, same as with Federal. I'm at the church, and just verified that we withhold PA state tax for our pastor. That said, it has to be assigned to the person as with any payroll item.

[FBCMoyock]

This is an upgrade from version 10. Because I started using the program in September, I didn't bring in all the payroll data from the first part of the year, so I don't know how V10 would have handled this. We do not withhold any taxes from Pastoral Staff. That's why I think there is a bug here. Federal Withholding is not a pay item, but the salary shows on the W2, however nothing shows up in the state section.

[NeilZ]

This is an upgrade from version 10. Because I started using the program in September, I didn't bring in all the payroll data from the first part of the year, so I don't know how V10 would have handled this. We do not withhold any taxes from Pastoral Staff. That's why I think there is a bug here. Federal Withholding is not a pay item, but the salary shows on the W2, however nothing shows up in the state section.

OK .. so what you're saying is that under the state section for salary, there is no amount shown for the pastors. In version 10.4, you'd go into Maintain Item Descriptions, select the Pastor Salary item (for each pastor if there are differences) and on the W-2 tab, you'd check the boxes for W-2 Box 1, Wages and Box 16, state wages.

I uninstalled my copy of the v11 beta, so I can't check to see if that is still the same there. However, I suspect that there is something that does the equivalent. I'd check that to see if the proper W-2 items are selected.

[FBCMoyock]

I have looked through all the setup options and there is no place to select a W2 item per say. In the new version under "Maintain Item Descriptions" there is a drop down for Tax Options. If you select "Taxable" it automatically assigns it to all tax items, Federal, Local, State, SS and Medicare. There is a Non-Taxable option, Housing Allowance and "More Options". Under more options you can select Federal/Local/State/SS/Medicare. I selected Federal and State. (I assume this area takes the place of the "W2" options area)
Again, if you select Taxable it includes the Pastor's salary on the 941 report as taxable SS & Medicare wages, which is wrong. Selecting Federal and State should include the salary in those two areas, but it is not posting to State on the W2

[Jeff]

Version 11 has a totally new way of figuring out where on a W2 items should be shown. It does this by what type of tax a particular income item is subject to. There is an override though. If that particular tax has not been withheld for that person, then the income will not show in that box. There is one exception to the override and it is for box 1, wages tips, other comp. If an income item is marked as taxable by federal income tax, it will show in box 1 even if no federal income tax for that person has been withheld.

For example, the income item is marked as taxable. The total amount for this income item will show in box1. It will show in Box 3 (Social Security Wages) and box 5 (Medicare Wages) only if corresponding tax has been withheld for this employee (boxes 4 & 6)

State taxes work the same way with an additional complication. It is now possible to withhold taxes for multiple states. This was requested by a user in city that borders another state. I don't remember exactly where this customer was located, but lets pretend they are in Kansas City, KS and also have employees in Kansas City, MO, you would create 2 state income tax types and items, one each for KS and MO.

Your income item would be marked as taxable, which includes both KS and MO taxes. So it looks to see if you paid KS or MO tax to know what to put in box 15. If you had not paid tax to either state, nothing will go into boxes 15, 16, or 17.

[FBCMoyock]

Even if I don't pay any taxes to the state, I still have to show the State, Tax ID number and State wages on the W2. If there is no override then I can't use the W2 feature. I would have to create them manually. Can I place a State Tax pay item in the Pastor's record, then set it with enough exemptions so it doesn't withhold any tax. Will it report in blocks 15 16 and 17 then? While I understand there are some users who live in one state and work in another, there are far many more pastors who don't have taxes withheld from their pay.

[Jeff]

I've been doing some research to see what is expected on pastoral W2s with state taxes and what could be changed in the program to handle this better. Most sites just say something like it depends on your local as to what should be shown. I think I have a solution, but it will have to implemented in a Maintenance Release. If you need to issue the W2 today, you can manually add the amounts to boxes 15 & 16 for the pastor. As an added benefit, PowerChurch now retains manual changes to a W2 so you can make the edit today and print the w2s at a later time.

[FBCMoyock]

I'm OK at this point. As I said, I have been using PCP since Sep in kind of a training mode. I will begin trying to use the program to it's full potential the 1st of January, so I wanted to see how it would handle the 941s and W2s before I got into the situation where I needed them and found out that I had set something up wrong from the beginning. I hate having to reverse transactions. I like being able to backup and restore. I just make a backup, play around and try things, if they don't work I just restore and move on. If you find anything else, please let me know.
Thanks

[NeilZ]

I'm OK at this point. As I said, I have been using PCP since Sep in kind of a training mode. I will begin trying to use the program to it's full potential the 1st of January, so I wanted to see how it would handle the 941s and W2s before I got into the situation where I needed them and found out that I had set something up wrong from the beginning. I hate having to reverse transactions. I like being able to backup and restore. I just make a backup, play around and try things, if they don't work I just restore and move on. If you find anything else, please let me know.
Thanks

Just wondering, you're on a release version of 11 right ?? That reference to September makes me wonder a bit

[FBCMoyock]

Yes, I am on Release version 11. I was using V10 when I started, but because of the differances in the payroll section, I wanted to make sure everything was working the way I thought it should before I jumped in with both feet.

[NeilZ]

Yes, I am on Release version 11. I was using V10 when I started, but because of the differances in the payroll section, I wanted to make sure everything was working the way I thought it should before I jumped in with both feet.

I hadn't realized that v11 was now shipping, I knew they were waiting for the new manuals to arrive before the packages were sent.

That said, if anyone is using the Beta version, I believe it will stop working soon (if it hadn't already).

[Jeff]

Manuals arrived Monday morning and we shipped the first packages Monday afternoon.

There are a few online customers that have been switched over to 11. New online customers are being setup in version 11 and existing online customers can be asked to moved to version 11 right now. We are not going to start moving existing online customers in mass until the first part of Feburary. We didn't want to make a big change during January when our support is very busy and customers have a lot of work to do as well.