941 Worksheet and Forms

At the end of each business quarter, every company must submit Form 941 to the federal government, along with Federal Withholding and any matching FICA and Medicare taxes owed. Initially, this option provides a screen version of the IRS Form 941 (or Schedule B). This screen version will display data from the selected quarter in the program, filling in the relevant fields. Unlike most other reports, the screen form allows the user to enter specific information in unshaded fields manually. This might include “fractions of cents adjustment” or the name of the person completing the form.

940 Worksheet and Forms

This option generates a worksheet that details all the information needed for Form 940, the Employer’s Annual Federal Unemployment Report. All businesses are required to submit Form 940. The totals in the report are based on the accumulated payroll year-to-date balances.

W-2 Forms

At the end of each year, all employers must provide every employee who received pay during the year with a W-2 form, so that the employee can file federal, state, and other income taxes. Employers must also provide the Internal Revenue Service with a copy of this information. This can be provided in one of two ways: either by sending a copy of the W-2 form for each employee to the IRS or by sending the same information via electronic file. Contact a tax accountant or the Internal Revenue Service for specific information regarding the reporting requirements. Electronic Filing is covered in the next section.

The option uses year-to-date payroll data to prepare W-2 forms for each employee. BIS will print W-2 information directly onto IRS standard W-2 forms. To preview the W-2 forms, choose 'laser draft' as the output and review the preview.

Report Types

• Laser: This report type prints on standard W-2 laser forms.
• Laser Draft: This report type displays data on a draft W-2 form.
• Continuous: This report type prints on standard W-2 tractor-feed forms.

1. Employee ID
   

1. Select the current or previous year.
   

1. Print Totals
   

1. Employee ID
2. State
   

W-3 Transmittal Form

At the end of each year, all employers must provide the IRS with W-2s and a W-3 Transmittal form. The option uses year-to-date payroll data to prepare the W-3 form. BIS will print W-3 information directly onto IRS standard W-3 forms. For a preview of the W-3 form, select laser draft as the output and check the preview.

Report Types

• Laser: This report type prints on standard W-3 laser forms.
• Laser Draft: This report type displays data on a draft W-3 form.

1. N/A
   

1. Select the current or previous year.
   

1. 941 Payer
   
2. Third Party Sick Pay

1. N/A

W-2 Electronic Filing

Overview
BIS offers the user a tool to create an Electronic W-2 report for filing directly with the Social Security Administration. This chapter briefly discusses how to create the file and how to download and run the verification program provided by the Social Security Administration, which can also be used to upload the verified file.

Most of the fields will already be filled with data within the program, but some fields must be completed by the user.

• Calendar Year: Use the drop-down tool to select the correct calendar year for the payroll covered by the W-2s.
• Create file in: Enter or use the Browse button to select the location for the data file that will be created.
• Recipient Agency: This drop-down will list the Social Security Administration, and only those states whose electronic file requirements are different from the SSA.
• Federal Tax Id (EIN): Comes from System Information. Data can be changed, but defaults return if closed.
• Kind of Employer: Default is N - None Apply, others include government and exempt employers.
• Type of Employment: Default is R - Regular (All Others).
• Third Party Sick Indicator: Check with the C.P.A., tax preparer, or the I.R.S. for up-to-date information about the option.

W-2 Electronic Filing, Main tab, Type of Employment drop-down choices.

R-Regular (All Others) is the default selection.

Other Tab

It is vital to check with a tax advisor to make the correct selections for this form.

W-2 Electronic Filing Other tab screen form.

It is vital to check with the tax advisor to make the correct selections for this form.

• Resubmitted: Check if this file is to replace a previously submitted file. If checked, enter TLCN.
• User Id Number: Enter the correct User Id Number according to I.R.S. instructions.
• Software Code: Choose either 98-In-House or 99-Off-the-Shelf. Default is 98.

State Tab

The State tab of the W-2 Electronic Filing form records the state-specific data needed to create the electronic filing. This tab is only accessible and needs to be filled out if the recipient agency recorded on the Main tab is a state.

Social Security Administration AccuWage

The Social Security Administration has made available its AccuWage software that identifies most of the common format errors in wage submissions. Using this software greatly reduces submission rejections. AccuWage is free software from Social Security.

How does AccuWage work?

First, download and install the AccuWage/AccuW2C software. Then, specify the directory where the W2REPORT or W2CREPORT file is located. AccuWage/AccuW2C reads the file and provides information about any errors it detects.

Note for older operating systems: Windows 2000/XP users can access the same help guide from the menu bar in the upper left corner of any AccuW2C software screen. However, Windows Vista users cannot access the guide from within the AccuW2C software because Microsoft's Windows Help program is not a component of the new Vista operating system.

Using the AccuWage Program

• Start Testing Button: Click on the Start Testing button to begin the testing process. Browse to the file that was created in BIS.
• View Tested Records Button: Click on the View Test Records button to review the testing results. Browse to the specific record of interest.
• View Error Report Button: Click on the View Error Report button to display the error report on the screen in either Text or HTML mode.

Adjusting Incorrect Social Security and/or Medicare Calculations

At the end of the year, there are sometimes corrections that need to be made to payroll records to ensure accuracy. The procedures described in this document focus on Social Security and/or Medicare calculations, but they also apply to other payroll corrections.

Although BIS offers users the ability to start their company setups with many fields already filled in, some users opt to assign all settings. Occasionally, these users omit essential elements, two of which may be the settings for Social Security (FICA) and Medicare (MED) in Administrator, System Wide Parameters, Payroll, Federal taxes.

The problem arises if the percentage was wrong or an old (too low) FICA Social Security Limit was used. Users may have processed payrolls in which the FICA and/or Medicare amounts were incorrectly calculated. This section will describe several alternatives to fix the problem in BIS, but will go into detail using one method.

Alternative 3 (Recommended Detail)
The amounts reported were too low, and the company will make adjustments to prior 941 records to reflect what should have been the correct FICA and/or Medicare, while reducing the reported Federal Income Tax Withholding. In this example, the user would process one check per employee for each full or partial quarter with the problem as a Cash Disbursement Payroll Check. With "Calculate Withholdings" unchecked, the system does not calculate the taxes, and the User can access the Withholdings, Deductions & Company Contributions form by clicking the "Click here to edit Withholdings & Company Contributions" link on the Totals tab. The form then permits the user to enter adjusted Federal and State tax withholding amounts as well as Company FICA & Medicare.

Special Year-End Payroll Adjustment Procedures

Overview

Procedure:

1. Independently determine the dollar amount that needs to be adjusted.
2. Uncheck all automatic Additions and/or Deductions in Employee Master Record(s).
3. In Transactions/Cash Disbursements/Payroll Checks:
   • Fill-in Main tab (Check number, Date, etc...)
   • Go to the Additions Tab/Special Pay (Code 13), Date, Type 3, and Amount.
     
   • Uncheck all withholding amounts, except FUTA and SUTA.
     
   • Use the same GL account number for both entries (i.e., “Suspense” or “Clearing”).
   • Enter the second entry as a negative amount to balance GL.
     
   • Save.
4. Print Taxable Wages and Employee Ledger to verify entries.
5. Reset Automatic Additions and/or Deductions in the Employee Master Record(s).