Tips for computing the 2% reduction for the employee share of Social Security.

1. From the Main Menu, click>1.Input Information,>4.Farm Name & Checkbook Balances. Change the FICA% to 4.2.
2. When you key a payroll transaction both the employee & employer share for FICA and Medicare will be computed automatically for you. 4.2% for FICA and 1.45% for Medicare will be used. For all your employees, pick one of the unused cells for Health, Fringe or Retire and mentally change the meaning to be "2% Employer share FICA". Press F-10 to pop up the calculator and multiply the Gross pay times 2%, click the Insert button to place the answer into one of the 3 unused cells that you will use for 2011 as "2% Employer share".
3. All during the year the cell for "2% Employer share" will accumulate by employee. When you print the Employee Earnings Report you will need to remember that the "2% employer share" is displayed in the HLT-FRN or RETIRE column under the Employer share heading. When you make a payment to the depository you must remember to include the totals for the "2% Employer share" as well as the totals you have been using for the last few years.

This method will provide accurate totals for the employee when you print their W-2 at year end.

Preparing for Schedule F and Profit & Loss Reports:

Before printing these two reports you should print the Detail Cash Transactions thru the current period. Look for the "2% Employer share" total in item code 081, 083, or 084. This total needs to be moved to the proper item "Employer FICA Expense" code 082.
Go back to monthly input and click on the Non-Cash Expense tab. Create an entry for the "2% Employer share" and its' appropriate item code , but make the amount minus (ie: -250.00). Next make a second entry for the actual "Employer share FICA Expense" and its' item code 082. Make this amount Plus (ie:250.00).

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Computing the FICA & Medicare taxes manually:
If you don't want to use the method described above, you can set the FICA match to NO for every employee. When you enter their payroll information you will be required to manually calculate the correct amounts for the Employee share for FICA & Medicare and the Employer share for FICA & Medicare too!

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An update to handle this temporary Social Security calculation?
We are advised that this new law is only for 2011. We have just completed shipping the 2011 version 6C to our customers. It is unreasonable for us to make the changes necessary before some customers need to write payroll by the 15th of January. As a result we do not intend to offer an update during the 2011 year to effect this short term tax law change.