Use QuickBooks to process your payroll? Have employees who gross more than $200,000 annually? Now is the time to make sure that your QuickBooks files are set up to deduct a new tax on high-wage earners.
The new Medicare tax applies to those whose gross pay reaches or exceeds $200,000 and requires employers to deduct an additional 0.9% from their employee’s pay.
Unfortunately, some employers have noticed that while they’ve run QuickBooks payroll updates, their program did not activate the new additional Medicare tax deduction. We recommend the following steps:
- Verify that you have the most recent payroll update installed from QuickBooks.
- Review your QuickBooks payroll items to ensure the Additional Medicare Tax Deduction is listed.
- If the deduction is not listed, run the payroll set-up in QuickBooks to activate it.
A quick review will ensure that the proper deductions are being withheld from your high-wage earning employees – or allow you to rectify the issue promptly.
Need additional help or have questions? Contact Natalie G. Fuhrman at firstname.lastname@example.org or 717.843.3804.
Contributed by Natalie G. Fuhrman, CPA, a manager in RKL’s Small Business Services Group. She specializes in providing accounting services to companies from a wide range of industries, as well as tax services for business and individual clients.