Hi CSJ,

Is the amount of the contribution calculated by multiplying .9235 times the bonus?  Also, is FICA pre-state?

Hi CSJ,

For that employee, you would need to change the Adjustment Method for the state tax to No Tax to stop the tax from withholding. If the employee changes their 401K later on, you would need to change that back to No Adjustment.

Here is a link to more detailed instructions:

https://support.na.sage.com/selfservice/viewdocument.do?noCount=true&externalId=50630

Thanks!

Alternatively, if this is just a one-time contribution, you can process the check, then go into Enter Checks and change the amount to 0.00 for that tax (don't delete the row, just change the amount to 0.00)

Thank you so much for your help.

Does your plan allow for changes at any point like this and on specific types of wages? Most plans dictate when an employee is allowed to change their deferral and what wages the deferral is calculated on. For instance, our plan just allows deferrals to be changed quarterly. Also, it doesn't differentiate between wages and bonus pay, they're both just wages in our plan so there wouldn't be a way for an employee to defer a specific amount just on bonus pay. 401k plans are fairly customizable, so it could be your plan does allow this type of action. Just something to check.

Would the one-time contribution check be payable to the employee or the IRA?

In our plan document, employee's must opt IN to have 401k taken from their bonus checks, is there anyway to stop 401k/RothIRA from coming out for one payroll?

Thanks,

Jamie

Our plan only allows for deferral changes quarterly, so there would be no way to allow for a one time change like that. If your plan allows for deferral changes at any time, they could probably change it for one pay period. Every plan document is different, so you'd want to read through and be sure to understand the definitions of wages and deferrals for your plan.

These are bonus checks for 1,400 ee's.  I have had to go through each check to zero out the 401k/Roth.  Past systems I used had a special file they could run to take them out.

Ah, I wasn't speaking about how to actually make it happen in sage, sorry I misunderstood. Our 401k formula is set up to identify which PAY ID is to be included when calculating the 401k deferral. I would think you could have two different 401k Deductions with different formulas to make this automatic. One formula that excludes bonus compensation and one formula that includes bonus compensation. Then you can just assign the right PR Deduction to the employee depending on which way they opted.

That an idea.....Thanks!

Hi Nelsonj68,

There are a lot of variables, most notably what (if any) automatic pays, deductions, or fringes need to be included on the bonus checks? If you just need taxes to calculate, here are the steps to process a bonus check with just taxes:

How do I enter a bonus pay or second sequence check and have only taxes calculate?

Thanks!

Thanks!