Accounting, Payroll & Pension Issues/salary posted in wrong year

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Expert: - 1/5/2010


Question
Hi,

I am paid twice a month. By Dec 15, i had earned around $112K and crossed FICA upper limit. Problem started when my last payroll of year 2009 was generated on Jan 1 instead of Dec 31. It included $10000 bonus as well. This resulted in FICA deduction for 2010 and i lost around $2000. Is there any way to correct this mistake and post this income as part of 2009 instead of 2010. Please advise.

Thanks

Answer
If it is paid on January 1st it is 2010 income.  It simply means that in 2010 you will not have to meet that much in fica so you will reach your limit sooner in 2010.

It is at the option of the company when to pay the bonus and when to tax it.

Shirley

Accounting, Payroll & Pension Issues

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Shirley McAllister, CPP, PHR

Expertise

I can answer payroll questions, payroll tax questions, 401K questions. No stock option questions please and I have some knowledge of other pensions but am most familiar with the 401K pension. I can answer U.S.and Canada payroll questions proficiently and have a good general knowledge of UK and South Africa and some knowledge of Australia and New Zealand Payroll procedures. Please do not ask me homework questions I do not have time to answer them.

Experience

25 years with an international company in the Human Resources, Payroll and Payroll Tax areas.

Organizations
SHRM, APA, I.O.M.A.

Publications
I.O.M.A. and BNA

Education/Credentials
P.H.R., C.P.P., Canadian Payroll Administrator, Successfully passed APA class on UK Payroll Administration. Boise State University Human Resource Certification

Awards and Honors
APA Hotline Citation of Merit for last 8 years.

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