I have a client who has an employee who is deferring comp into a SIMPLE IRA. When I set up the SIMPLE IRA as a payroll item, QuickBooks default is to defer fed, state, and city. Should this only be deferring fed taxes?Just double checking.Thanks!
Are you talking about State and City Income Tax? If so, that is correct. It would just be subject to Med,SS, and unemployment.
If I take the check mark off of the state taxes in payroll set up, QuickBooks says, "are you sure, this is usually checked?" So this is why I am asking, why is it usually checked? I think it should only be Fed.
Thanks,
Hello,
I believe with a SIMPLE IRA, this deferred money would not be subject to Federal and State Withholding tax....this is why each of these 2 payroll items are checked. they are checked so QuickBooks knows not to subject this money to tax.
I hope this helps,
-Kelly
The checkmarks mean it is taxable. I believe there is a glitch some where, because I have ran across that same problem.
Hello,
Here is a screenshot that may be useful. In QuickBooks, this is the default setup for a SIMPLE IRA.
