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Dynamics Gp 9.0 Payroll Issue With Benefit Based On Deduction With Employer Maximum

Dynamics Gp 9.0 Payroll Issue With Benefit Based On Deduction With Employer Maximum
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When customers stays on the version of Microsoft Dynamics GP no longer supported

by Microsoft directly in US Payroll module they have to deal with tax percentage updates as well as with mismatch in Social Security employee and employer contribution percentages. Second issue is only fixable in release 9.0 by applying last tax update issued in early January of 2011. It is Round 2 for the year of 2011. This update is incorporated with service pack 4. If you look at the version number it is 9.00.0388. Lets describe symptoms and try to recommend solution:

1.Tax tables with UPR41300 through UPR41303 are the same in older version as they are in current versions 2010 or 10.0. Tax updates are typically distributed in .CAB files with the name TX.CAB. This zipped file contains SQL script in TX.SQL file. As these tables have the same structure it is possible to backup these for tables first and then run this SQL script against Dynamics database. So several consulting firms are inclined to do the job and help you in staying current with federal income and state tax percentages in specific income brackets. This partially does the job but unfortunately some issues may exist. One of them is when you are matching 401K program and you base Employer match benefit on that deduction. It could be reproduced when you set deduction to 5% use one tier at 50% and restrict by Employer Maximum 6%. What seems like system does it takes 401K contribution amount for the pay run, multiplies it by Employer Maximum 0.05 and then multiplies the result by 0.5. Microsoft recognized the issue and recommended fixes. We would like to share our experience from the consulting field

2.Benefit Tiers please here try to switch from 50 to 100 percent and try to work out formula with employer maximum amount. Looks like in our case magic was in 100% in Benefit Tier

3.Split 401K contribution deduction into two. One is when employee contributed below or equal to employer maximum. Build Benefit based on Percentage of Gross Wages. For employees who are willing to deduct more create second 401K deduction which is applicable to them together with the first 401K deduction. This second deduction is matched by employer
Dynamics Gp 9.0 Payroll Issue With Benefit Based On Deduction With Employer Maximum
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4.Old version and FICA work around. Fix was programmed in Dexterity for versions 9.0 and newer ones. In 8.0, 7.5, 6.0 and earlier ones you have to deal with GL procedure. The idea is simple in order to keep W2 accurate reduce FICA to 4.2%. This will lead to accrual for both employer and employee at 4.2. Then in General Ledger entry simply add whatever needs to be accrued for employer to reach 6.2%

5.Good news for customers on Great Plains DOS version 9.5, 9.2 and earlier. Accounting people hear have a habit to update tax tables manually in the beginning of the calendar year. However FICA have separate taxes for employer and employee and all you need to do is set new rates

6.For additional information, please feel free to call us 1-866-528-0577 or 1-630-961-5918 (this number works for international customers) or email us help@albaspectrum.com We serve you USA/Canada nationwide via remote support (web sessions and phone/Skype conferences). Local service is available in Western Michigan, Chicagoland, Southern California (LA, Orange County and San Diego), Houston area of the state of Texas

by: Andrew Karasev

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