The program is calculating FICA tax on my spouses future income, even though I have tried to indicate that it should not (in the social security folder). She is employed by an education institution that does not withhold FICA on her income. Is there something else I need to do or is this a bug.
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Interesting point. Enter her earnings as taxable special receipts instead of earnings. We'll discuss the issue internally and perhaps add this as an option in a future release.
Best,
Dick Munroe
Hi, Different advise. Just enter her earnings in the earnings folder and make her future covered earnings in the Social Security folder equal to zero. Call me at 617 834-2148 if this is unclear. best, Larry
Right. I had forgotten that you don't HAVE to copy earnings to future covered earnings.
A little obscure, but thats the right way to handle he problem.
Best,
Dick Munroe
I have a similar situation (for my wife and I as we are both employed by state and county institutions) and have been doing as Larry suggested but the program has always and continues to still deduct FICA - we do pay Medicare portion just not SS portion. In my case, my future employment income is zeroed out and in my wife's case I have entered the lesser amount that she has from her self-employment (outside consulting) that she does, expecting that FICA would only be calculated in the self-employment income. I have just accepted the calculation as it would only only increase our consumption and not a big issue as we are not consuming at the level that ESP says we could. Obviously it would be great to have more accurate numbers so any ideas would be appreciated to get this calculation done correctly.
Thanks,
Fred
Hmmm, looks like we may have an issue there somewhere. I'll take a look. I suspect that the code assumes (and always has) that earnings => FICA instead of looking to see how much of those earnings are covered by SS and calculating FICA based on that. I'm not 100% sure that's right all the time (but it should be given that we figure out the FICA limitations when calculating covered earnings). If that's the case, then this is something that's been in the product for a while.
Best,
Dick Munroe
Thanks for responding .... FYI ... had already tried what Larry suggested before I submitted my question, and still get the unneeded FICA calculations.
Yeah, there was a bug there in the original code. Long story, but the tax routines were using earnings rather than covered earnings to calculate the SS portion of the FICA leading to unnecessary FICA taxes being calculated. This will be fixed in the next release.
Best,
Dick Munroe
Was this fixed because I just realized that there is no way to specify in earnings not to apply FICA and it is still doing so? See my original August 2010 comment above where my wife has both FICA exempt earnings and self-employed earnings.
Thanks, Fred
I assume the question I posted on November 14 was overlooked so I will try again.
Thanks, Fred
I know that this problem is somewhat unique, but I would appreciate a response to my Nov 14 question. I must be falling through the cracks as all questions since mine have been answered.
Thanks, Fred
I have asked Larry or Dick to respond.
Is Dick "indisposed" as I have not heard anything nor seen him respond to any question in quite some time?
Thanks, Fred
There is no way to indicate that earnings aren't eligible for taxation for FICA and we probably won't do that.
You need to enter earnings that are taxed but not by FICA as taxable special receipts. This is easy if you're under the current covered earnings limit (FICA Freedom Day). Otherwise you have to enter two special receipts, the covered portion which is taxable and the residue which isn't.
Dick
p.s. Not indisposed, just incredibly busy.