Setting up Social Security taxes for 2011

The IRS has issued Notice 1036 for 2011 tax tables. The Social Security tax tables will need to be updated for 2011. For the first time, the employee and employer amounts of Social Security will be processing different percentages. The employee deduction has been lowered to 4.2%, while the employer liability still processes at 6.2%.

Download the Notice 1036 document here

Set up the Social Security taxes for 2011 by doing the following:

In Versions 10.4 and prior:

• Go to Accounting > Payroll > Maintain Tax Tables.
• If you already have two separate tax tables for Social Security, choose the Employee table and skip the next step.
• Click the Add button to add a second Social Security tax table to track the employee deduction amount.
• Change the Cap (gross) to 106,800. The percentage should be 4.2%.
• Save the table.
• Go to Accounting > Payroll > Maintain Employee Pay Items.
• On each employee, double click the Social Security Employee deduction item.
• Change the tax table to the 4.2% Social Security Employee table you just added or changed.

In Version 11:

• Go to Accounting > Payroll > Setup > Maintain Tax Tables.
• If you already have two separate tax tables for Social Security, choose the Employee table and skip the next three steps.
• Click the Add button to add a second Social Security tax table to track the employee deduction amount.
• Choose Federal: Social Security and click OK.
• Enter a description and choose Social Security as the tax type.
• Enter 4.2% in the Percentage field, then check the \"There is a cap on this tax\" option.
• Enter 106,800 in the Cap (gross) field.
• Save the table.
• Go to Accounting > Payroll > Maintain List of Employees.
• Click the Pay Items tab.
• On each employee, double click the Social Security Employee deduction item.
• Change the tax table to the 4.2% Social Security Employee table you just added or changed.