FarmBooks

Payroll Form 943 - Employer Annual Tax Return for Agricultural Employees Report Issue

The total wages amount subject to social security taxes (line 2) and Medicare taxes (line 4) not match on the Payroll Form 943.

Why this is happening

This is caused by an issue discovered in the payroll 943 report that was introduced in the version 4 release.

How to fix it

Attention  Install this update as soon as possible!

This is only an update to reports, this will not change your FarmBooks version.

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This update addresses payroll and 1099 vendor report issues since the 4.0.4.0 release of the application. The rates used to determine FICA for the past several years for Social Security and Medicare has been 12.4% and 2.9% respectively for both the employee and employer contributions. With the new tax rates for 2011, these rates have changed which caused report issues for two of the payroll reports. If you have encountered any of the error conditions described below, it is important that you download and install the latest report update.

Note: The application has accurately calculated and captured the correct rates for payroll transactions for agricultural employees. The problems are isolated only to the way the information was being calculated on the reports.

Payroll Analysis (Single Employee and All Employees)
The computation for the FICA Tax Due was being based on FICA amounts withheld times two. Since the 2011 tax rate changes, this rate is now pulled from the tax table and used to compute amount due based on the Social Security wages (Gross Wages minus Any Pretax Health). Also, it will eliminate any issue caused by the user overriding the system calculated values for FICA.

Payroll Summary by FICA Status - All Employees
It had the same issues as described above for the Payroll Analysis report.

Payroll Summary
If you have a non-calendar fiscal year farm, the amounts computed for the column "Amount To be Paid" was incorrect for the social security tax because it was pulling the rate based on the fiscal year and not the correct calendar year. Now, the report determines the correct calendar year to retrieve the rate based on the transaction date that it is processing. Calendar fiscal year farms would not have this issue.

Also, the "Total Labor Expense" calculation was incorrectly using "Gross Wages" instead of "Net Wages" plus all deductions and benefits to determine the amount.

Payroll Form 943 - Employer Annual Tax Return for Agricultural Employees Report
Why does the total wages amount subject to social security taxes (line 2) and Medicare taxes (line 4) not match on the Payroll Form 943?

These amounts could vary if you have a highly compensated employee where the social security wages exceeds the FICA limit (Medicare tax has no limit). If this is not the case, then it could be caused by an issue discovered in the payroll 943 report that was introduced in the version 4 release. This error condition may not be observed by all FarmBooks users as it is data driven.

The report incorrectly inspects the transaction type to determine if it was a paycheck when summarizing and accumulating report totals per employee. So, if the last transaction read for the employee was a check, the total social security wages is incorrectly omitted from the report. For instance, if a D code was added to health insurance to track medical reimbursements and the last transaction for the employee (external code) was a check, then it would be omitted.

Also, the rate used to compute line 2 for social wages was incorrect for non-calendar fiscal year farms. It was using and displaying 12.4 % instead of the new rate for 2011 as 10.4% as it was incorrectly using the fiscal year to determine the calendar year to retrieve rates. This caused other values in the report to be inaccurate. Calendar fiscal year farms would not have this issue.

1099 Vendor Reports
The new 1099 Vendor reports released with version 4.x had an issue where the amounts were doubled if you had a farm database with multiple fiscal years. The two reports have been updated to correct this issue. The "Summary report" did not correctly calculate the vendor total if negative accounting principles were used.

Click below to download the update file:
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