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Former Member
Feb 08, 2012 at 05:35 PM

Potential IRS reporting change if Social Security rate is not extended

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Hello - We received notice from ADP that due to the Federal Social Security rate changes this year that if the current 4.2% rate is not extended that they feel the IRS will require separate reporting capabilities for the different tax rates applied throughout the 2012 tax year. We are curious if SAP is addressing this issue systematically so that we will be able to comply with any changes to capturing and reporting 2012 taxes to the IRS.

Below is an excerpt from the notice received from ADP. Thank you for any information you can provide on this matter...

If the 4.2% Employee Social Security tax rate is not extended before we begin processing March 1 payrolls, ADP anticipates the likelihood that the IRS will require separate reporting to reflect the different rates for Social Security wages, taxes, Tips, Uncollected Social Security tax on Tips and Group-Term Life (GTL), and non-taxable Third Party Sick Pay for each rate.

In order to comply with the potential of separate reporting mandates, the existing fields will be used for reporting all wages and taxes applicable to the 4.20% rate. ADP will create new field codes to capture and display all wages and taxes applicable to the 6.20% rate. These changes would require your company to store the Social Security wages, taxes, Tips, Uncollected Social Security tax on Tips and Group-Term Life (GTL), and non-taxable Third Party Sick Pay in a separate code within your payroll system.