Fed9, additional Medicare taxes for earnings over government specified limits, incorrectly calculates.
SL annualizes wages. That causes a large, one-time check to assume that the annual wages are greater than the defined limit and to calculated a fed9, Additional Medicare deduction amount, even though the wages are below the defined wage limit.
A second factor in a wrong calculation is when calculations look at the gross Fed6 Medicare wages without considering any pretax exemptions like 401k or insurance.
To change the Fed9 setup, follow these steps:
1. Open Deduction Maintenance (02.290.00).
2. In Deduction ID, type Fed9.
3 . Change the Min Ytd subject base and Max Ytd subject base both to 0.00
4. On the Exemptions/Credits tab on an empty line, Press F4 to switch to form view.
5. Set up a new exemption.
Marital Status= All Statuses
Type Exemption= Exemption
Exemption/Credit ID = Fed6
Description= Fed6 subjwages
Base Type = Deduction Amount
Base Deduction ID = Fed6
Calculation Method= Fixed Percent
Fixed Pct/Rate/Amt= 6896.5517
Annual Maximum = 200000
Maximum calculation = As Calculated
Reduce reported wages box is selected
6. Click Save.
Note: Fixed % of 6896.5517 is calculated as 1/0.0145 = 68.96551724 converted to a % = 6896.5517 to back into the Fed6 subjwages.
7. Set up any pretax exemptions for Fed9 the same as you have set up for fed 6 such as for 401k or insurance.