1. Create an Historical Data Item (example CAR BENEFT). This will be an earnings item and you will make a timecard entry for these taxable dollars.
The "Entry Type" will be Amount.
The "Rate From" will be blank.
The "Multiply By" will be blank.
In field 4 "Basis For"of the HDI, list the data items for which tax should calculate. For example, if you want .FWT to calc on this HDI CAR BENEFT, list .FWT in field 4.
2. Create a second Historical Data item (example CAR DEDUCT). This HDI will have a REGOP in field eight: reg(2) op(L) item (CAR BENEFT, cur, amount).
This HDI is a deduction history type. It will deduct the same taxable dollars as you loaded in the CAR BENEFT timecard entry.
Post the CAR DEDUCT to the same GL account as CAR BENEFT (they will zero each other out).
3. If you have both Reported Tips and Allocated Tips, you will need 2 pair of HDI's to keep track of them separately. These must be reported separately on W-2's.
4. If you are tracking Reported Tips, you must create a new HDI to track Social Security Wages. Social Security Wages are the total wages paid subject to employee social security tax but not including social security tips (Reported Tips) and Allocated Tips. You can use .fica to calculate the Social Security tax for you, but must separate the .fica basis for Form 941 and W-2 reporting purposes. The new HDI will take the basis in .fica and subtract the basis in tips for a SS Wages reporting basis, and it will pull in the .fica tax amount. SS Wages is the HDI you will use in the W-2 federal parameter to report the SS Wages in W-2 Box 3 and the SS Tax withheld in Box 4.
5. The W-2 program will pull in the basis from .fwt for Box 1 Wages, Tips, Other Compensation. Per the IRS, this should include total tips reported by the employee (Reported Tips) but not Allocated Tips.