1001 Salaries and Wages: Amounts paid to, or on behalf of ...



The New Approach Special Notice – Updated Payroll Changes for 2020

Custom Micro Works Copyright 2020 Custom Micro Works All rights reserved

Date: 1/2/2020

Introduction

As a result of the Tax Cuts and Jobs Act (TCJA) there are more payroll changes for 2020 than the typical changes to the tax withholding tables. The NA upgrade (Ver. 3.09) will accommodate any situation you might run into.

There is one rare situation that the IRS suggested using three additional tax withholding tables, in addition to the three we now have with NA. At least for now, NA does not support that specific situation, but it can easily be accommodated without the additional tables.

By some accounts, these new payroll changes are the most significant in thirty years. I can attest to that because the NA payroll system has been intact for over twenty years. I would fall short of saying these changes will match the expectations of the IRS.

About this NA Upgrade – How to Proceed

After you have installed Ver. 3.09, you should go directly to PR/Setup and look at the new payroll tax rates and the new tax withholding tables. You will not see the 2020 tables until you change you PR year to 2020 (PR/Setup/General Information). There are five tables now, one new table for “Head of Household.”

The table that is used for a paycheck is determined by the employee’s Federal Withholding Status.

IMPORTANT – Exemptions and Withholding Allowances

You will quickly see that the federal tax withholding “allowance” as of 1/1/2020 is zero. This is part of the new tax changes. No matter how many exemptions an employee has, the allowance is disabled by setting it to zero.

As a safety precaution, I would advise you to change the number of “federal” exemptions for all employees to zero (PR/Employee Data/Benefits and Deductions).

What about STATE Tax Rates, Tax Tables, and Exemptions and Withholding Allowances?

I do not have any information about what states are doing. This new NA upgrade added new information only for the State of KS. I will be trying to contact them again immediately and will pass along to you what I learn in a special notice. If you need to get a payroll out immediately, certainly do not wait for possible changes to state withholding issues. If necessary, withholding adjustments can be made in the future.

Please call if you need help. As always, I will continue to be in the office most of time. If you do not catch me, please leave a message with your name, phone number, and the best time to catch you.

BE CAUTIOUS as always with the first payroll of a new year!

Be particularly cautious with your first payroll this year. REVIEW all employees’ pay detail for reasonableness.

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