[PR] How to refund a Pretax Deduction

Steps

1. In Pay Period Control on the pay sequence tab add a new pay sequence for your refund. We recommend making this correction in a separate pay sequence, rather than the employee's regular pay check. 

   TIP: If any of your deduction or liability codes have the box checked to only calculate on pay sequence 1 you will need to temporally Uncheck that box. It can be rechecked once you have processed the correction/.01 timecard line.

2. In PR Timecard Entry create a timecard line for .01 cent, then process and post the batch.

   NOTE: The penny timecard line is needed so the tax routines will run properly and tax the refunded amount when there are no other wages present.  Make sure and check the method of the deduction.  If deduction is set up as Method - Rate per Hour, will need to add .01 hours as well as the $.01 amount on the timecard line to get the Pretax Deduction to calculate in Employee Pay Seq Control.

3. Open PR Employee Pay Sequence Control form, pull up your employee and sequence:

Go to the deductions tab. Use the Override to add the pretax amount to be refunded to the same deduction code it was withheld from as a negative number and process.

(In our example this is a 401k pretax deduction code #401 and we are refunding 1000.00)

Note:

• The Federal Tax amount can be reduced by the penny if don't want to increase the employees' wages. (in our sample we did not reduce the Federal Tax by the penny)

• You should see the refunded amount in the Subject and Eligible wages for the taxes if the employee has not met a limit once you have processed the changes.

• If a deduction or liability doesn't calculate check to see if the "calculate only on pay Seq #1" box has been checked in PR Deductions/Liab form for the missing deduction or liability code.