Year End Mistakes
This section provides answers to common year end mistakes.
I did not perform the Build W-2 Forms before my first payroll in January. What should I do now?
This should not present a serious problem because the Build W-2 Form Update can be run at any time. When performing the update, simply enter 01/01 through 12/31 to include only prior year amounts. Be sure the FICA limits indicated on the starting screen of the build are for last year. Also, because this step is being performed out of order, pay particular attention during the W-2 review process to be sure all employees (including those terminated and deceased) are included.
I did not perform the Year End Update before my first payroll in January. What should I do now?
By not clearing the payroll at year end, certain taxes that contain annual limits (such as FICA, unemployment, and SDI) did not calculate correctly for most employees. The payroll cycle must be voided and re-issued to correct this problem. Be sure to use the same check cheque date when recording the void cycle, and if multiple cycles must be voided, do each one separately, newest to oldest (01/12 then 01/05). After the void process has been completed, perform the Year End Update to set all employees' year-to-date amounts to zero. You should also review the Year End Checklist to be sure no other year end steps were overlooked. Finally, re-enter the payroll cycle(s), as regular or manual checks cheques. Regardless of whether the miscalculated checks cheques have been provided to employees, the system will require that new check numbers be assigned during this cycle. If checks cheques were already distributed, be sure to record the same deductions and net pay as the original checks cheques issued.
In reviewing the W-2 year end figures, I have determined that some employees did not show up in the file to receive a W-2 at all. What's wrong?
If the year end steps were performed out of order, it is possible that an employee was purged as part of the Year End Update. In this case, you would manually add the individual back in the W-2 Form Maintenance screen.
An "exempt" employee does not receive a W-2. If the employee's status was set to "exempt" in error, you would manually add the individual to the W-2 Form Maintenance screen. (Alternately, if there were no employees purged as part of the year end update, you could re-build the W-2's. Be careful doing this as any changes made in the W-2 Form Maintenance screen will be lost.)
I did not change the tax tables for the New Year, but I have already processed payroll in the New Year. What should I do now?
Void the checks cheques, correct the tax tables, and then re-issue the checks cheques with the correct tax calculations. This method completely corrects the error and ensures that the quarterly and year end reports will be accurate when printed.
I am reviewing a January payroll and the 401(k) deduction didn't show up during the check calculation. The employee was 'over-the-limit' last year, but it should have started deducting again at the beginning of the year. What's wrong?
The Clear employee balance at year end checkbox in the Deduction / Add-on Code Maintenance screen is used to designate whether to clear accumulated balances at year end. It appears as though the 401(k) code's Clear employee balance at year end checkbox was not selected. Because the new payroll year is already in progress, it would be a mistake to check this box and re-run the update.
Set up a new 401(k) code and begin using it.
An additional deduction amount may be taken on the next payroll cycle through editing the deduction code on the check adjustment screen. (Any match amount would need to be added through the employee's recurring deduction screen).
An employee loan paid off last year has started showing up on the employee's check again. It was a recurring deduction that reached the limit months ago. What's wrong?
It could be that the Clear employee balance at year end checkbox on the deduction code was selected, which cleared the accumulated balance at year end. Because the accumulated balance has been erased, the deduction was taken again. This deduction is no longer needed for this employee; simply delete it from the Employee Deduction/Add-on Maintenance screen. If the January payroll in which the amount was deducted on the employee check has been updated, refund the amount using the same code.
Why am I receiving an error message stating: "ERROR- Year End Update must be performed before beginning a pay cycle dated later than <the current year>?"
The check cheque date at the beginning of a new calendar year until after the Year End Update has been performed in order to prevent incorrect tax calculations. If you received the error message above, you still need to perform the Year End Update before you can continue to process payroll.screen prohibits users from assigning a
I need to void a payroll check issued last year. What should I do now?
If you are replacing a check the employee lost, go to the screen. It is important to use a current date as the replacement check date. This way, both the void and replacement check cheque will post to the current year and wash against one another, thereby creating a net effect of zero in the employee history file for the current year.
If you are voiding a check and not replacing it, or voiding and reissuing with a different amount, it is vital to follow the instructions below to ensure that the W-2 T4 issued and current year payroll records are accurate.
Once the payroll year end has been completed, all transactions recorded during the payroll cycle (payroll check bonus check, etc.) must be for the New Year. This is because many of the payroll calculations depend upon year-to-date information. If additional prior-year entries are made, the accumulated totals since the Year End Update will be inaccurate. This means that any additional payroll transactions for the prior year cannot be recorded in Spectrum as part of a payroll cycle. To correct the prior year error, transactions entered in the following areas may be required:
W-2 Form Maintenance to correct the employee's W-2 information.
General Ledger Journal Entry to correct liability and expense accounts. If subsidiary ledgers (Job Cost or Equipment Control) are affected, this can be recorded as part of the journal entry.
Make manual notations (in ink) of changes on affected tax reports, such as Quarterly Federal Tax Report and the Unemployment Tax Report.
An alternative to the above is to reverse all new transactions, and return the Payroll module to the prior year, but Viewpoint does not recommend this option because it is riskier for a number of reasons. If any payroll cycles have already been updated, all checks issued in the New Year must be voided, then the operator must perform the steps below. A word of caution when voiding: watch check cheque dates very carefully and be sure to void each check as of the same date it was issued. Even if reversing current-year transactions does not present a problem, it is possible that prior-year information has already been purged during year end processing, in which case this solution would also not be advisable.
Print and retain a copy of the W-2 Listing and the W-2 Forms (printed on plain paper).
If you need further information, you can contact Viewpoint Customer Support by visiting the Viewpoint Customer Portal.
When I performed the Build W-2 Forms, I did not enter descriptions for Boxes 12 or 14, and/or other entries are incorrect.
The safest solution to this problem is to simply enter the changes you would like to make into the W-2 Form Maintenance screen. Depending on the nature of the error during the Update, this may present a huge challenge in determining the correct figures.
A second option would be to perform the Build W-2 Forms again, this time setting the prompts correctly. This is a riskier option, if terminated employees or earnings history were purged at year end. Likewise, any changes already made in the W-2 Form Maintenance screen would need to be re-done after the update. We recommend you print and retain both the W-2 Listing and a copy of the W-2 forms (printed on plain paper) prior to re-updating. Be sure to refer to the Build W-2 Forms screen instructions when performing the Update again.
If you have terminated or deceased employees in the W-2 file that have been purged, and the Build W-2 Forms function has been re-run since the year end purge, you will manually re-enter those W-2 records into the W-2 Forms Maintenance screen.
In reviewing the W-2 Year End figures, I have determined that the state wages are not correct. It appears that the Cafeteria/Section 125 or 401(k) deductions were not set up correctly when the payrolls were originally processed. What should I do now?
The figures in the W-2 Form Maintenance screen following the update represent the sum of state wages processed during each payroll cycle during the year. If 401(k) or cafeteria/Section 125 tax exempt flags were set incorrectly at any time, this would be the result. Having determined the problem, use the W-2 Form Maintenance screen to change these amounts manually. The State, County & Local Quarterly Tax Report and the Deduction History Report will be particularly handy during this process.
For further assistance, please submit a case through the Viewpoint Customer Portal.
I have a large figure showing up on the "fractions only" (aka Tax adjustments) line of the Quarterly Federal Tax Report. It's normally just a few cents. What's the problem?
Confirm that the date range used when the report was printed includes three calendar months or less. It cannot successfully be printed for a wider date range because of the three month daily grid on the lower half of the report. If for some reason you wish to print 09/27 to 12/27 (four months: 09, 10, 11, 12), print two reports and simply sum them.
If you are printing this report in January for date ranges last year, it is possible that the report is incorrect because the Federal tax tables, specifically FICA rates and limits, have already been updated for the New Year. If this report needs to be reprinted for the past year, temporarily return the FICA rates and limits to last year's figures. Remember to reset them to the current year as soon as you are done!
If there is still a large "fractions only" variance after eliminating the above conditions, we recommend you search for the cause by narrowing the date-range of the report. If you are troubleshooting a problem in the 4th quarter, print three monthly 941 reports (October, November, and December). It is likely that the variance will show up primarily on one of the reports. Next, to further narrow the search, print a separate 941 report for each check date in the month of the variance. Once a single week has been identified, use the Wage and Tax History Report and/or the reports printed during the payroll cycle to try to identify the individual entry or entries. Having found the source of the problem, appropriate corrective action can be taken.
I printed my Unemployment Tax Report (FUTA, SUTA) for 2021 and the excess calculation is wrong. What should I do now?
This report provides information on excess calculations computed during each payroll cycle during the specified date range. Therefore, this report may not be correct if limits were adjusted or 'tax effects' of deductions changed during the year. If changes were made, there is a handy Excess Unemployment Report available for use in auditing this problem by recalculating excess amounts based on current settings. This is included as a second format when printing the Unemployment Tax Report.
I printed my Unemployment Tax Report (FUTA, SUTA) and the tax calculation is wrong. What should I do now?
This report provides information on tax liabilities actually accrued during the payroll cycles during the date range specified. These are the amounts that were actually debited to the expense account and credited to the liability account during each payroll cycle. This report does not recalculate the tax based on current settings. Therefore, if the rate has been changed at any time during the period, the tax amounts will not seem to 'multiply across' correctly. To confirm that the rate has been altered, and to identify precisely when the change occurred, reprint this report for a smaller date range. Corrections to these rates are most often recorded sometime in January or during April (as the 1st quarter filing is being prepared). Try to begin the search there.
In comparing the unemployment reports for state (SUTA) and Federal (FUTA), I see that the wages are different. What's wrong?
It may be that nothing is wrong, but this should be investigated. This condition will occur when deductions carry different tax effects for the SUTA and FUTA calculation. The most common example of this is a Cafeteria/Section 125 plan deduction; the wages subject-to FUTA are reduced by any Cafeteria/Section 125 deductions. Your state may not allow a similar exemption. In any event, if your state and 'US' were set up differently for tax effect in the Deduction / Add-on Code Maintenance screen, this would be the result. The Wage and Tax History Report may be helpful because the limits for subject-to wages are defined.
I work in multiple states and the sum of the state (SUTA) reports is greater than my total wages. What's wrong?
It is likely that unemployment was accrued for employees both in the resident and work state at times during the year. Spectrum is parameter-driven for taxable/exempt status on a state-by-state basis. In some cases, it is appropriate to accrue tax in both places, based on lack of reciprocity agreements between states. Other times, it may mean that too much tax was accrued, because unemployment was due to only one of those states. To review this further, select a few employees, printing their unemployment reports for a small date range, and then compare them to the Wage and Tax History Report printed during the payroll cycle(s). This will show unemployment tax accrued for each place, for each employee. Look for instances where a single employee has wages subject to unemployment and tax accrued in two or more states during the cycle. Unemployment is a complex tax area that varies widely across the country, and it is important to discuss specific responsibility with your CPA.