Q: How do I change the way my addition items affect taxes in QuickPayroll?

A: For some states, changes may be made in how addition payroll items in QuickPayroll affect taxes. New payroll items for one of these additions will affect taxes based on the new settings.

However, if you already have a payroll item set up for the addition, you will need to review the item to ensure that it is affecting the tax appropriately.

1. From the Lists menu, click Payroll Items.
2. Select the payroll item in question, for example, adoption benefits or 457(b) distribution, and double-click to edit it.
3. Click Next until you reach the Taxes.
4. For any taxes affected by the change, click the column next to the tax item if you need to add or remove a check mark.
5. Click Next until you can click Finish to save your changes.

If you had to remove or add check marks for any taxes, you will need to determine whether a wage base adjustment for that tax for prior quarters and a portion of the current quarter is necessary. You may want to refer to your accountant for this information. If an adjustment is necessary, determine the amount to add or deduct from the wage base. Then, adjust the wage base following the instructions below.

Note: Some taxes have an annual limit. To check the limit, from the Payroll Item list, click Reports, and select Payroll Item Listing. The following adjustments are necessary only if employees have not reached this limit.

To determine the amount of the wage base adjustment for each employee:

1. From the Reports menu, point to Payroll Reports, and click Summary.
2. Select the dates for the quarter to be adjusted, for example, 1/1/99 to 3/31/99.
3. This report should list the amount for the addition payroll item for each employee. This is the amount that will be entered in the employee’s wage base adjustment for the tax, if the employee has not reached the annual limit in wages.
4. Write down these amounts or print the report.

To adjust the wage bases:

1. From the Activities menu, click Adjust Liabilities.
2. Enter today’s date in the Date field, and enter today’s date or the quarter ending date (whichever comes first) in the Effective Date field. QuickPayroll does not allow an effective date later than the Date field.
3. Click Employee and select the name of the first employee that used the addition payroll item.
4. Click Show Wage Bases.
5. In the Item Name column, select the tax that requires an adjustment.
6. Tab over the Amount column, and in the Wage Bases column, enter the amount for the addition payroll item from the summary report.

Note: Enter it as a positive amount if you added a checkmark to the tax item. This will add the amount to the wage base for this tax. Enter it as a negative amount if you removed a checkmark from the tax item. This will subtract the amount from the wage base for this tax.

7. Click Next Adjustment to proceed to another employee.
8. Repeat these steps for other taxes and quarters if necessary.

If the actual tax amount needs to be adjusted, you will need to adjust the amounts on future paychecks.