South Dakota Department of Labor announced that
effective October 1, 2009 the
Surcharge tax will be implemented.
Background
The Surcharge tax rate of 1.50% is projected to
remain in effect until June 30, 2010.
The Surcharge tax uses the unemployment insurance wage base limit of $9,500.00
for tax year 2009. More information can
be found on the agency website under Employer Updates, Surcharge. Employers may also contact the Unemployment
Insurance Division - Tax Unit, South Dakota Department of Labor
at 605-626-2312, or send an email
to the agency.
Frequently asked questions
Who is affected?
You may be affected if you currently make UI
contributions in the State of
How do I setup the Surcharge Rate in QuickPayroll?
In order to accurately apply the Surcharge tax rate
to only the wages that are applicable for October 1, 2009 through December 31,
2009, the Surcharge tax rate of 1.5% will need to be calculated manually after
all paychecks dated for 4th Quarter 2009 have been processed.
Step 1 – Generate a Payroll Item Detail report to identify the amount
of wages subject to the Surcharge tax for 4th Quarter 2009.
1. Click on
the Reports menu, highlight Payroll Reports, and click on Item
Detail.
2. Click
the Customize tab.
a. In the Report Dates section select Custom, enter From 10/01/2009 To 12/31/2009
for fourth quarter 2009
b. In the Columns section
i. Uncheck
all default selected items
ii. Select (left margin), Entered/Last Modified, Date, Name, Payroll Item, Income Subject
to Tax, Wage Base, and Amount
iii. Click OK
3. Click
the Filters tab.
a. In the Current Choices section, highlight Payroll Item in the list, and select SD – Unemployment Company in the Payroll Item drop-down list.
Click OK
4. Print or Export
(using the Excel tab) report.
5. Using
the amount listed in the Wage Base
column of the Payroll Item Detail
report, calculate the total by 1.5% in order to determine the amount of tax due
for the Surcharge tax.
Step
2 – Identify all employees who
have not met or exceeded the SD – Unemployment company wage base limit of
$9,500 for 2009, for fourth quarter.
1.
Calculate the Surcharge
tax due for each employee by multiplying each employee’s wages reflected in the
Wage Base column of the Payroll Item Detail report by 1.5%.
Step
3 – Process Payroll Liability Adjustments to reflect the amount due for the
Surcharge tax.
1. Click the Activities
menu and click on Adjust Liabilities.
2. In the Date
field, enter the date for which you are making the adjustments. In this case, 12/31/2009
for the fourth quarter.
3. In the Effective
Date field, enter the date that you want this adjustment to affect your
liability balance. In this case, 12/31/2009 for the fourth quarter.
4. In the Adjustment
is for section click Employee and choose the employee’s name from
the drop-down list.
5. In the Item
Name field, choose SD – Unemployment Company from the drop-down menu
(Since there is not a Payroll Item for the Surcharge tax, use the
SD – Unemployment Company liability to show the tax amount due for the Surcharge
tax.)
6. In the Amount
field, enter the amount of the tax adjustment as a positive number.
7. In the Memo
field, enter a note to yourself about the adjustment, i.e. adjustment due to new
Surcharge tax
8. Click Next
Adjustment if additional adjustments are needed.
9. When you
have finished adjusting the tax liability for each affected employee, click OK.
Step 4 - Prepare your 4th Quarter 2009 Quarterly Contribution report.