The Tennessee Employment Security
Division increased its unemployment insurance
wage base limit to $9,000 from $7,000 for tax year 2009.
Details are
provided in the following Notice.
QuickPayroll is releasing Payroll Update 20918 to comply with this change.
In addition to the wage base limit increase, the
agency added a
temporary additional fee of 0.6% on all unemployment insurance premium rates on
Premium Tables 1, 2, and 3.
The agency has sent out Employer
Statements for the amount of tax due based on the additional 0.6% rate
applied to the taxable wages reported for the first quarter 2009. The additional tax due for first quarter 2009
must be paid by July 31, 2009, in order to avoid having interest of 1.50%
applied to the balance due amount.
Note:
QuickPayroll received notification from the agency that the temporary
additional fee rate does not apply to the standard 2.7% new employer rate.
Frequently
Asked Questions
How do I know if I'm affected?
You may be affected if:
·
You pay Tennessee State Unemployment Insurance
(SUI) taxes on behalf of your employees;
and
·
At least one of your employees have exceeded the
wage base limit of $7,000
1. in the
first quarter (01/01/2009-03/31/2009) or
2. by the
end of the second quarter (06/30/2009).
If these conditions apply, refer to the
instructions below. If needed, consult with your accountant or tax advisor for
guidance.
Will I have to amend my first quarter Contribution Report if one or
more of my employees have exceeded the $7,000 wage base limit?
Yes. Because Intuit QuickBooks Payroll is
programming the wage base limit change with an effective date of January 1,
2009, an amendment to the first quarter Premium Report will be necessary if one
or more of your employees have exceeded the $7,000 wage base limit.
What steps do I need to take?
1. Download and install Payroll Update 20918 as soon as
it is released.
2. Enter the total Company rate for SUI, which includes the additional fee rate of
0.6%, in the Company rate box.
3. Prepare an amendment for first quarter only if you
have employees that earned more than $7,000 by the end of the first quarter.
Step 1 – Download and install Payroll Update 20918
as soon as it is released.
For
more information on how to download and install a Payroll Update, click on the
Help menu, select User’s Guide from the drop down list, click on the Index tab,
and then type “Updating” in first field. Help is provided for both
downloading and installing Payroll Updates.
Step
2 – Enter your SUI rates for 2009 (Note: This step
is not applicable if you have the standard 2.7% new employer rate)
4.
Continue
to click Next, and then click Finish.
Step
3 - Identify employees who exceeded the $7,000 wage base limit and enter
resulting Payroll Liability Adjustments.
Backup your Company File
1. Go to
the File menu and click on Back Up.
2. Select
where you want to save the backup copy; click Save.
Insure you have a copy of your first quarter Premium Report.
Generate and print the Payroll Item Detail report to identify employees who have
exceeded the $7,000 wage base limit.
1. Go to the Reports
menu, highlight Payroll Reports and then click on Item Detail.
2. Click on
the Customize tab.
3. Select Custom on the Report Dates drop-down and enter 01/01/2009 to 03/31/2009 for first
quarter 2009.
4. In the Columns section, select (left margin), Type, Date, Name, Payroll Item, Income Subject
to Tax, Wage Base, and Amount. Click OK.
5. Select
on Employee in the Total By drop-down list.
6. Select
the Filters tab. In the Choose Filter section, click on Payroll Item on the Filter drop-down list.
7. Then select
on TN – Unemployment Company on the Payroll Item drop-down list. Click OK.
8. Print a
copy of the report.
9. Run a
report for second quarter by selecting Last
Calendar Quarter (04/01/2009 to 6/30/2009) on the Report Dates drop-down list. Print a copy of the report.
10. Run
another report for third quarter by selecting This Calendar Quarter (07/01/2009 to 9/30/2009) on the Report Dates drop-down list. Print a copy of the report.
Identify all employees who exceeded the $7,000 wage base limit in the
first and/or second quarters.
1. For the First Quarter of 2009
1. Calculate
the additional wages due (up to the new $9,000 wage base limit) for each
employee who exceeded the $7,000 wage base limit.
2. Then
calculate the additional tax due for each employee by multiplying the
employee’s additional wages due by your Company’s SUI rate.
2. For the Second Quarter of 2009
1. Calculate
the additional wages due (up to the new $9,000 wage base limit) for each
employee who exceeded the $7,000 wage base limit.
2. Then
calculate the additional tax due for each employee by multiplying the
employee’s additional wages due by your Company’s SUI rate.
3. For the Third Quarter of 2009
1.
Calculate the additional wages due (up to the new
$9,000 wage base limit) for each employee who exceeded the $7,000 wage base
limit.
2.
Then calculate the additional tax due for each
employee by multiplying the employee’s additional wages due by your Company’s
SUI rate.
If you have at least one employee who exceeded the $7,000
wage base limit in either the first or second quarters prior to downloading Payroll
Update 20918, proceed to Payroll Liability Adjustments.
Payroll
Liability Adjustments are needed to correct all discrepancies for the prior and
current quarters.
Note: Wage
bases for employees who have exceeded the wage base limit of $7,000 will not
adjust until a subsequent payroll is processed. These wage base adjustments
will appear in the quarter the payroll was processed.
1. Go to the Activities
menu and then click on Adjust Liabilities.
2. In the Date
field, enter the date for which you are making the adjustments. In this case,
03/31/2009 for the first quarter.
3. In the Effective
Date field, enter the date that you want this adjustment to affect your
liability balance. In this case, 03/31/2009 for the first quarter.
4. Select the
Employee radio button and choose the employee’s name from the drop-down
list.
5. In the
Item Name field, choose TN – Unemployment Company.
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
wage increase
8. Click Next
Adjustment if additional adjustments are needed.
9. When you
have finished adjusting the tax liability for each affected employee, click OK.
10. Repeat
Items 1 through 9 to enter your second and third quarter liability adjustments,
if any. Use 06/30/2009 to reflect the second quarter liability adjustment date
and 9/30/2009 to reflect the third quarter liability adjustment date.
Manual Adjustment to your Payroll Item Detail report
1. Generate
and print a Payroll Item Detail Report for the first and second
quarters.
2. You will
see tax adjustments you entered for each affected employee under the “Amount”
column. You will not see any wage
adjustments under the “Wage Base” column.
3. You will
need to manually adjust the printed Payroll Item Detail Report in order
to determine the correct total taxable wages.
4. For the
first, second, and third quarters, if payroll liability adjustments were
applied, adjust the Payroll Item Detail Report by adding the additional
wage base amounts to the TOTAL Wage base.
Step
4 – Prepare your first quarter amendment. Refer to the manually
adjusted Payroll Item Detail Report prepared in the prior
section.
1. Make a
copy of your 2009 first quarter Premium Report that you filed with the
agency.
2. Line 3-Net Taxable Wages. Cross
out the original figure and write in the TOTAL Wage Base as provided on the Payroll
Item Detail Report.
3. Line 2-Less Excess Wages.
Calculate excess wages by subtracting Line 2 from Line 3. Cross out the
original figure and write in the new figure.
4. Line 4–Premium Due.
Calculate new total tax due for the quarter. The tax due should equal to the
TOTAL Amount from the Payroll Item Report. Cross out the original figure and
write in the new figure.
5. Line 10 – Enter the Exact Amount of
Payment Submitted with this Report. Cross out
the original figure and write in the additional tax due for the quarter.
6. On the top
left corner of the Premium Report, write Amended Return.
7. File &
pay your amended first quarter Premium Report on or before July 31,
2009. If you are including the
additional amount due for the additional fee on your amended return, include
the Employer Statement sent by the Agency with your amended return.
Second
quarter 2009 Premium Report
1. When it is
time for you to prepare your second quarter Premium Report, follow your
normal process.
2. Be sure to
refer to the manually adjusted Payroll Item Detail Report
prepared earlier in “Manual
Adjustment to your Payroll Item Detail report” section.
Adjust the Payroll Item Detail Report by adding the additional wage base
amounts to the TOTAL Wage base for payroll liability adjustments that
were previously applied.
3. File &
pay your second quarter Premium Reports on or before July 31, 2009.
4. If you
have already filed your second quarter 2009 Premium Report, repeat Step
4. When preparing your Payroll Item Detail Report, use the date range of
04/01/2009 to 06/30/2009 for the second quarter 2009 and make a copy of your
2009 second quarter Premium Report.
Third
and Fourth quarter 2009 Premium Reports
If you are planning to use the payroll reports in
QuickPayroll to complete your third and fourth quarter 2009