I mistakenly checked the 'Exclude' box to prevent taxes from being withheld. How do I correct it?

If you marked “exclude” to prevent taxes from being withheld, the taxable earnings (and W2) will be affected. When a person is excluded it means neither the employee nor employer are required to pay taxes on that amount. If you mistakenly did this for federal or state income tax, Social Security or Medicare, you’ll need to make a correction as follows:

We’ll assume the check has already been cashed. You’ll void the check in Procare and then repost it so the earnings are correctly treated as being taxable. You won’t actually give them a new check – this is just for calculation purposes. You may need to adjust the taxes on their next check to account for the difference.

To correct the issue:

1. If you have the Expenses & Ledger module, and have already reconciled the check, you’ll need to temporarily unreconcile it using the Edit Register feature.

2. Void the Original Check. You’ll probably want the Void Date to match the original Print Date. See: How Voids Affect Financial Reports

3. Remove the check mark from the “Exclude” box on their Employee Withholdings screen. Or, if the person claims they are exempt from federal or state income tax withholdings, delete that withholding from them entirely, which will still count the earnings as taxable.
   4. Calculate the Paycheck a second time, but do not post it yet.

   1. Go to the Withholdings tab and type over the withholdings with the amounts you actually withheld (if different).
   2. On the Summary tab confirm the Check Amount is the same as before.
   3. Post the check using the original Post Date and Print Date.

4. On their next check, any differences to Social Security should be adjusted automatically (version 10.2.4393 or higher). Manually type over any other withholding amounts (as needed) to make up for under withholding on the original check.

5. You may need to manually adjust your next tax deposit, if the deposit was paid prior to making the correction.

6. If you have the Expenses & Ledger module, and had previously reconciled the check, you’ll need to re-reconcile it using the Edit Register feature.