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Payroll tax setup
originally posted: 11/22/2006
reposted: 2/18/2011 This post has not
been recently reviewed or revised by the author and may be out of date.
If you notice an error or are in doubt, please send a new question by
email or ask for an update. Email asktony@tonynovak.com.
Q: I am setting up our QuickBooks
payroll system for retirement plan contributions. Are these subject to
state and local wage taxes?
A: The general rule is that
employer contributions to a retirement plan are not "wages" and are
therefore not subject to wage taxes. Voluntary employee contributions
really are wages that the employee has elected to direct to the
retirement plan so these are subject to wage taxes except for federal
income tax withholding. (Retirement plan contributions are subject to
income tax at the time of withdrawal). These rules vary from state to
state so check with your local taxing authorities or use QuickBools
ProAdviser to do a quick review of your payroll tax system.
Summary
More resources:
QuickBooks ProAdviser service
