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Missed Fica Med collection/remit

Found out in prepping second quarter 941 that we have one employee who didn't get fica/med collected (either side) for a couple of checks. I was in a rush and threw the difference into fractions of cents adjustment to get the 941 done (hey it was like 945 pm on the 31st!)

To correct this, do I collect, remit and then file a 941X form to move it from fractions to due? For reference, the amount is under $100 and our total liability for the quarter is over 1.2 million. Even then, my fractions have never been that high so it took me hours to find the issue.

Comments

  • I am unclear to the situation.

    • You should have withheld FICA, yes?
    • Did you pay/report the full amount due, what should have done, not was done? If this is true, just get the employee to write you a check and you are done. Hint. If this happens again, this is how you handle it.
    • Assume that you under filled the 941. It has been too long since I have done this, but you basically need to fix or replace each of the bad 941s (assuming there are bad 941s). I no longer remember the mechanics. You send checks for the unpaid funds, plus a later check for interest/penalties. And include a cover letter even though this is not a requirement. SSA will screw up the correction somehow so you need to make it easy for them to you personally.
  • I take it the wage and tax amounts were correct but the deposits were short and you reported the shortfall in fractions of cents. David is correct that you will have to recover the shortfall in withholding or payment (this is an over payment of wages) from the employee (or gross it up in the third quarter as a payment on behalf of the employee). You are correct that you need to do a Form 941-X to correct the liability and fractions of cents by the amount of the short fall. It should be an interest free adjustment if corrected in the third quarter. Make the deposit per the 941-X instructions on or before the date the 941-X is filed.

    If the shortfall occurred during June, the best way to have handled this would have been through the accuracy of deposits rule - If it occurred during April or May, it would not have qualified (assuming you are a semi-weekly depositor). See page 28 of Pub 15 for this rule.

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