The following changes need to be made to your Payroll System to reflect changes to the Federal deductions for Social Security and Witholding calculations.

Fiscal Periods

After closing December in Payroll, but before opening the first pay period in 2008, you need to change the 'Fiscal Periods' file in 'Payroll'. Access this file under 'Payroll' - 'File Maintenance' – 'Parameters' - 'Fiscal Periods'. Change the year to 2008. Press <F2> to save. This will change the year in the beginning and ending fields. Make any other changes in the "Begin" or "End" fields as necessary. Press <F2> to save.

Social Security

REFERENCE: IRS Circular E, Page 17.

The following changes need to be made to both the Employee and Employer Calculations. Access the "Master Calculations" field under 'Payroll' - 'File Maintenance' - 'Master Files' and 'Calculations'.

Find the Category for your Federal calculations (usually 200). Once you have found the record for the Federal Category press <F2> to access the "Calculations" in this category. You will need to change both the "Employee Social Security Deduction" and the "Employer Social Security Deduction" to reflect the wage limit. The percentage remains the same for 2008 at 6.2%. If you have set up other calculations for Social Security be sure you update all of them.

The "Amount Limits": Limit is now set at $102,000. You must also change the “Max” to 6324.00 (The Max must equal 102,000 times 6.2%)

NOTE: When printing W-2 Forms from Yearly Reports, W-2 Forms, be sure to fill in the 2007 Social Security Wage Limit of 97,500 in the top box. The above values are to be used for all payrolls paid in 2008.

Earned Income Credit Setup

REFERENCE: IRS Circular E, Pages 18 and 61.

If you have employees eligible for Earned Income Credit (EIC) payments, the following table shows the values that need to be set in the appropriate 'Tax Table'. If you are not sure how to set up the EIC option in Data Plus, contact Data Plus Support to request the

Tech note or get it right from our web page.

Federal Tax Table

REFERENCE: IRS Circular E, Pages 36 and 39.

Access the 'Tax Table' under 'Payroll', 'File Maintenance', 'Master Files', and 'Tax Tables'.

Find the FEDERAL Tax Table record and change the "Allowance per Exemption" to $3500.

Press <F2> to see the "Table Rows". Make the following changes to this table.

Change the "Rows" for the status categories (1 = Single, 2 = Married) to reflect the new amounts shown on the table below. Press <F2> to save your changes.

When printing W-2 forms in Data Plus you will choose a 4 down form that has 4 W2’s on each page or a form with 2 W2’s on each page. The following pages show samples of these forms, although they are not the exact size.