US Payroll Instructions
WARNING-- The 2% reduction in the employee FICA withholding percentage has ended as of Jan 1, 2013. To avoid under-withholding, either download and install 2013 tax tables, or follow these steps:
NOTE-- If you accidentally under-withhold on FICA for 2013 pay periods, you will need to increase withholding in future pay periods, to make up for it. Click the link for instructions. IRS expects you to use the new withholding rates by February 15, and complete any adjustments by March 15.
US Federal Withholding Instructions
Enter the number of claimed exemptions in the Fed Exemptions field in each Employee account.
Use the following to determine the value for the Marital Status popup menu in each Employee account:
NOTE--: A few states use slightly different conditions for the marital status choices. Follow the links at the bottom of this page, to see specific instructions for your state.
If an employee claims additional federal withholding on their W-4 form, enter it into the Fed Withholding field in the Employee account record (click the Payroll Setup button to see it).
Goldenseal will automatically calculate the correct federal withholding for each pay period.
Medicare Employee Withholding
Starting in 2013, there is an additional .9% employee withholding for Medicare that kicks in after an employee has earned $200,000 in a year.
NOTE-- This is the first time we have experienced a deduction that is structured with a bottom limit! Our existing calculators don't handle this case, so we will add it in the version 4.9 update in Spring 2013. In version 4.8 we have a deduction line item for the extra .9%, but do not calculate it. You will need to add it manually if an employee earns more than $200,000 before the next update.
FICA EMPLOYEE WITHHOLDING
The employee withholding rate for Social Security was reduced temporarily, from 6.2% to 4.2%, between Jan 1, 2011 and Dec 31, 2012. As of January 1, 2013 it returned to the original 6.2% rate.
Earned Income Credit
The option to get advance payments of the EIC tax credit expired on Dec 31, 2010. Taxpayers can still get a credit when they file their tax return, and they may adjust their withholding allowances to reduce withholding amounts. However they won't be able to get a credit added to their paychecks for wages in 2011 or later.
We still are keeping the 2010 EIC tax tables available, in case the credit advance is reinstated (although with a Republican House that is unlikely).
If you previously gave the EIC tax credit to some of your employees, follow these steps to remove it for wages in 2011 or later: