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How do I refund the local tax money to an employee?
Environment
Function: How to refund tax money to an employee
Version: 20.4
Module: PayrollProduct:Core PENTA
Time Entry-Reimbursement
Manual Payment Adjustment
Resolution/Fix/Answer
- The system cannot reduce a tax to make a payment to an employee
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- so a reimbursement should be used to refund the money
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- Once the payroll is complete, run a reimbursement history to see the employees that received the payback
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- A Manual payment adjustment can be used to reduce the tax and offset with the reimbursement so a net zero payment occurs to offset the entry
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- The reimbursement will charge a liability or expense
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- account
- A Payroll Adjustment
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- account will need to be used
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Steps in the Process:
- Pay the money back with the reimbursement
- PENTA books the expense
- Offset the reimbursement with the Tax using the Manual Payment Adjustment process -Manual Payment Adjustment Entries to Refund Local Taxes Incorrectly Withheld
- PENTA offsets the expense
- Net impact is zero in the GL and the sub-ledger is up to date for W-2 purposes
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