Dundee Group Blog

Sage Abra Tax Updates Forthcoming

Sage Abra Q4 2010 Quarterly Tax Updates expected to be delivered the week of December 27th

This Alert applies to Abra Suite and Abra SQL HRMS with Payroll

The Federal Government released 2011 tax rates as of Friday Dec 17th. In response to this release, Sage Abra Q4 2010 Quarterly Tax Updates are delayed and are expected to be delivered the week of Dec 27th. This delay is necessary to incorporate the federal tax rate updates in Q4 which will minimize customer confusion and avoid the need to apply a hot fix after the Q4 update has been delivered.

The Q4 2010 Quarterly Product Update for Abra Suite 7.7x, 7.8x and 9.0x, as well as, Abra SQL HRMS Payroll 8.5, 10.0 and 10.1 will contain the Social Security employee tax rate changes per the legislation passed and signed by President Obama on December 17, 2010. The full extent of this change is described as follows:

Under The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which was signed by President Obama on December 17, 2010, the employee's share of Social Security tax in 2011 will be reduced from 6.2% to 4.2%. Therefore, the maximum an employee would pay in Social Security tax (if the employee is paid at least the wage base of $106,800) is $4,485.60. Employers would continue to pay the full rate of 6.2% for a maximum of $6621.60 on at wage base of $106,800 for 2011.

In addition we are delaying the release to address the following:

• Employee Tax Rate for Railroad Tier 1 Reduced, Effective January 1, 2011
• Employee Tax Rate for Social Security Reduced, Effective January 1, 2011
• Federal Withholding Tax Changes, Effective January 1, 2011

All other tax items addressed in Q4 are documented in the Release Notes. Upon availability, both Sage Abra Suite Payroll customers and Sage Abra SQL HRMS Payroll customers will receive an alert notifying of availability to download the tax update from Support Plus Online.

Hire Act Fixes for Sage Abra Payroll

This is a 3-Step Tutorial for those using Abra Payroll who have not made the edits necessary to update Taxable Wages for an employee for EMP9 tax code and decreased the EMP1 Employer Liabilities by the same amount.  

If you have already configured the EMP9 taxable wages and Employer Liabilities from Quarter 2, 2010, please disregard this article.

Step 1: Edit Payroll History (by employee)

Prior to doing any edits, make sure the Record and Deposit Liabilities process has been done.

From the menu bar, select Actions > Payroll > Edit Payroll History.

Select the Qualified Hire Act Employee and complete the tax history step.

Enter an Adjustment Effective date in the open quarter to be adjusted. Click Ok. Detail EMP9.

Increase EMP9 QTD Taxable Wages by the Hire Act eligible wages for this employee.
Increase EMP9 QTD Gross Wages by the Hire Act eligible wages for this employee.

Repeat above edit for payroll history for each eligible Hire Act Employee that needs to be adjusted.

Step 2: Edit Employer Tax Liability (for each check date)

Decrease EMP1 Employer Liability Amount (do not edit the Taxable wages or the Employee withheld amount).

Increase EMP9 Tax Wages by the amount of the EMP1 eligible Hire Act Tax Wages. If EMP9 does not exist for the check date, manually add this tax code to the edit employer tax liability screen.

Note: If you are a semi-weekly depositor, you will need to do this by check date so the Form 941 Schedule B is correct.

When prompted with the following message:

Click No to show the overpayment on the 941 line 15. If Yes is clicked, no overpayment will show for Line 15.

Step 3: Re-run Trial Quarter Close
After adjustments have been made, run Trial Quarter Close. Re-run the Pre-Close Employee Taxes Report (Quarter-End Reports) for FSOC and EMP9, and balance this to the Payroll Deposit Requirements Report for the quarter (Standard Payroll Reports).

 

Last Chance For Year-End Sage Abra Payroll Training

Dundee Group is offering a full day, year-end payroll training course for Sage Abra Payroll in Albany, NY on Thursday, December 2nd. We have only one seat left, and registration ends on Wednesday, November 24th.

This live classroom course is designed for the Sage Abra Suite Payroll user responsible for Year-End Payroll closing and preparing for the New Year payroll processing. By attending and participating in this course, you will gain the skills and knowledge to successfully follow pre-closing procedures, closing procedures, print forms, produce electronic files, and complete the New Year payroll processing procedures. Eligible for 6 CPE (NASBA) credits.

Register for training through our website, or email us for more information!

Year-End Payroll Training in Farmington, CT and Albany, NY

We are offering a two full days of training for Sage Abra Payroll in two locations.

This live classroom course is designed for the Sage Abra Suite Payroll user responsible for Year-End Payroll closing and preparing for the New Year payroll processing. By attending and participating in this course, you will gain the skills and knowledge to successfully follow pre-closing procedures, closing procedures, print forms, produce electronic files, and complete the New Year payroll processing procedures. Eligible for 6 CPE (NASBA) credits.

We will be offering the course in

Farmington, CT on November 19, 2010 and Albany, NY on December 2, 2010.
Click here to register

IRS Announces Pension Limits for 2011

The IRS announced the changes to pension plan limits for 2011. In general, limits remain unchanged, or include a small inflation adjustment.

The IRS highlighted these features:

• The elective deferral (contribution) limit for employees who participate in section 401(k), 403(b), or 457(b) plans, and the federal government’s Thrift Savings Plan remains unchanged at $16,500.
  
  
• The catch-up contribution limit under those plans for those aged 50 and over remains unchanged at $5,500.
  
  
• The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are active participants in  an employer-sponsored retirement plan and have modified adjusted gross incomes (AGI) between $56,000 and $66,000, unchanged from 2010. For married couples filing jointly, in which the spouse who makes the IRA contribution is an active participant in an employer-sponsored retirement plan, the income phase-out range is $90,000 to $110,000, up from $89,000 to $109,000. For an IRA contributor who is not an active participant in an employer-sponsored retirement plan and is married to someone who is an active participant, the deduction is phased out if the couple’s income is between $169,000 and $179,000, up from $167,000 and $177,000.
  
  
• The AGI phase-out range for taxpayers making contributions to a Roth IRA is $169,000 to 179,000 for married couples filing jointly, up from $167,000 to $177,000 in 2010. For singles and heads of household, the income phase-out range is $107,000 to $122,000, up from $105,000 to $120,000. For a married individual filing a separate return who is an active participant in an employer-sponsored retirement plan, the phase-out range remains $0 to $10,000.
  
  
• The AGI limit for the saver’s credit (also known as the retirement savings contributions credit) for low-and moderate-income workers is $56,500 for married couples filing jointly, up from $55,500 in 2010; $42,375 for heads of household, up from $41,625; and $28,250 for married individuals filing separately and for singles, up from $27,750.

 

Read the official release here.

Upgrading from Sage Abra 7.7x to 7.8x?

Although Sage recommends upgrading directly to the latest version, Sage Abra Suite Version 9.0, we understand that customers may decide to upgrade from version 7.7x to version 7.8x instead. Users of Abra Suite 7.7x installation upgraded to version 7.8x will need to reset employees who are "HIRE Act qualified" after the upgrade is performed and quarterly updates applied.

NOTE: Employees who are HIRE Act Qualified will need to have their "HIRE Act Indicator" reset to "Yes" within the Abra "Payroll Status" detail.

Run the Tax Withholding by Tax Code Report for the Tax Code EMP9 in version 7.7x. Print this report for use in step 7 below.

To install this update, please follow the directions below:

1.  Abra Suite currently on version 7.7x.

2.  Upgrade to version 7.8x.

3.  Apply 3rd Quarter update 7.85.

4.  Apply Legislative Update from within Abra Suite.

To reset Employee's HIRE act status:

5.  Log on to Abra Suite.

6.  From the Active Center, select Payroll, Detail and Payroll Status.

7.  In field "HIRE Act Qualified Employee" select Yes.

Boston Area Training for Sage Abra HR and Payroll

We are planning four full days of training for Sage Abra HR and Payroll in Boston this October. Registration is limited, so act quickly.

Managing your Employees with Sage Abra HR

Boston, MA October 19-20th. Course Fee: $1,035.
 Sage Abra has a brand new look and feel! This hands-on two day workshop is designed for the beginning to intermediate users of Abra HR. Learn to use the brand new look and feel to help manage your employees with ease. From utilizing the new User Interface to intuitively access your employee information, run reports, or update your employee information, Sage Abra Suite HR is your partner in the ever changing world of HR. [Eligible for 16.0 CPE (NASBA) credits]

08:30 AM - 04:30 PM Eastern Time (US & Canada)

Registration End Date: October 14, 2010
Seats Left: 3
 
Abra Suite Payroll Basic

Boston, MA October 21-22nd. Course Fee: $1,035.     
 This hands-on workshop is designed for the beginning to intermediate Abra Payroll users. Students will quickly learn how to run payroll, set up audit trails, add and edit code tables, set up system security and much more. [Eligible for 16.0 CPE (NASBA) credits and 13.0 RCH (APA credits]
 
08:30 AM - 04:30 PM Eastern Time (US & Canada)

Registration End Date: October 15, 2010
Seats Left: 4
 

Q2 Tax Update for Sage Abra & the HIRE Act

In addtion to the usual release notes, your Q2 tax update for Sage Abra will contain a document HIRE Act.PDF. Be sure to read this if you have any employees who are eligible for the HIRE Act.

Both PDFs can be found in the doc subfolder where you unzipped your quarterly update.

Posted by: Tim Ross

Sage Abra Payroll 4th Quarter 2009 Service Release

In addition to the usual Abra Quarterly update, there is a Service Release for some tax items that came in from the states after the Quarterly update was built.

There are versions of the service release for Abra 7.76 and Abra 7.82.

Updates include:

• changes on the W2 for Military differntial pay, non-qualified deferred compensation plans
• HSA reporting on the W2
• items for the following states; KY, MA, MO, NJ, OH, OK, PA, RI, VI

See the notes for the Service Release for the full details.

Posted by: Tim Ross

Proper Setup of the Tax Withholdings Panel in Sage Abra Payroll

How do you setup an employee to have no Federal Income Tax or State Income Tax withheld? Can you set an employee to have a flat amount withheld in each check? In this post we'll examine how to do this. Abra has two settings in the exemption count field which can assist with this.

If you want Abra Payroll to accumulate wages for the employee, but not withhold any taxes, enter 99 in this field and select No in the Exempt field. (This is a special code you should use only for this situation.)

If you want Abra Payroll to accumulate wages for the employee and only withhold supplemental taxes enter 98 in this field and select No in the Exempt Field. (This is a special code you should use only for this situation.)

You can also combine the Extra Tax field to give you flat amounts.

Example: an employee needs to have $600 per pay period withheld. First set their exemptions to 98 or 99 as noted above. Next, enter 600 in the Extra Amount field. Select 'Absolute' for Extra Tax Type field. The 98/99 setting will ignore the tax table and withhold $0. The extra amount is added, $0+$600, and $600 will be withheld each pay period.

If you are pay a Bonus Earning taxed at Supplemental Tax Rates you will probably want to use 98 exemptions.

Example: An employee is setup to have $200 per pay period withheld. They are also receiving a $500 bonus earning this period. Your bonus earning is set to use the Supplemental Tax Rates.

If the employee is set at 99 exemptions, their regular check will have $200 Federal Income Tax withheld. Their bonus check will have $0, since the $200 amount was withheld in the first check.

If the employee is set at 98 exemptions, their regular check will have $200 Federal Income Tax withheld. Their bonus check will have $125 Federal Income Tax withheld ($500 * 25% Supplemental Federal Tax Rate).

Disclaimer: the purpose of this post is to educate you on how Sage Abra Payroll works. We are not giving tax advice. Please consult a tax professional if you have questions on what is allowed by State and Federal law.

Posted by: Tim Ross