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pay code, non-taxable

  • 1.  pay code, non-taxable

    Posted Nov 30, 2018 03:53 PM
    We be implementing a monthly reimbursement program for business use of personal cell phones (pay employees $25/month towards their phone bill for getting emails and being contacted on their personal cell phones).
    Seems easiest to set up a pay code that is not subject to taxes that would add the stipend to those employees monthly.
    Is there a better way?  Or are the pitfalls I should be aware of?
    Thank you,
    Diana Robbins​

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    Diana Robbins
    Davis Door Service Inc.
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  • 2.  RE: pay code, non-taxable

    Posted Nov 30, 2018 03:55 PM
    ​Well, that should say "We are implementing"!

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    Diana Robbins
    Davis Door Service Inc.
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  • 3.  RE: pay code, non-taxable

    Posted Dec 03, 2018 04:36 AM
    Making the pay code not subject to any taxes is the correct way to pass the full amount through to Net Pay.  In my experience, I had to prove to those receiving it that it was not taxed and not added to any W-2 accumulators.  I had a simple spreadsheet built that took Gross Taxable Pay subtracted my Sec 125 deductions to show how it arrived at taxable wages for Federal and State and showing the additional amount not being included in those totals.

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    James Delmonte
    Dynamics GP Manager
    Groupe Stahl
    Mentor MI
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  • 4.  RE: pay code, non-taxable

    Posted Dec 03, 2018 09:02 AM
    You can definitely set up a business expense pay code. Easy to set up a recurring batch to include with your pay runs and non taxable.

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    Monica Terrell
    Dir of HR & Payroll for runbiz & Senior HRP GP Consultant
    Run Business Solutions
    Amarillo TX
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  • 5.  RE: pay code, non-taxable

    TOP CONTRIBUTOR
    Posted Dec 03, 2018 11:18 AM
    If you want to ensure gross wages are not affected in any way, you should set it up as a Business Expense pay type code, without any "Subject To" tax checkboxes marked. Also, ensure the "Report as wages" is not markedl. As an aside, you may want to confirm the tax implications of this type of reimbursement. If you have an IRS audit, this may be a grey area that will receive some scrutiny.

    Hope this helps!

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    Tom Franz, CPP
    Client Engagement Director, Client Services
    Integrity Data
    Lincoln IL
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  • 6.  RE: pay code, non-taxable

    Posted Dec 03, 2018 08:03 PM
    This might just be me... but I prefer this to go through AP... everything everyone said makes sense, but I still prefer this to go through AP... Maybe I'm just old schooled but I think it helps avoid questions with the employees AND auditors ;)

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    Shawn Dorward
    Dynamics GP Practice Lead
    Microsoft MVP, Business Applications
    shawn.dorward@interdynartis.com
    Twitter: @ShawnMDorward
    InterDyn Artis
    Blog: http://www.GPLifeHacks.com
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  • 7.  RE: pay code, non-taxable

    TOP CONTRIBUTOR
    Posted Dec 04, 2018 09:42 AM
    Edited by Jo deRuiter Dec 04, 2018 09:41 AM
    Good Morning @Diana Robbins

    I want to second what @Shawn Dorward, MVP said that this may be something better done through AP using EFT's (if you don't want to print checks) to pay the employees - in this way it remains wholly outside of Payroll and questions from employees and/or tax authorities will be shut down by it.





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    Kindest Regards,
    Jo deRuiter , MCP, DCP
    "That GP Red Head"
    AISLING DYNAMICS CONSULTING, LLC
    WEBSITE: https://aislingdynamics.com/
    BLOG: https://community.dynamics.com/gp/b/gplife
    GPUG Academy Instructor
    Dynamics GP Credentialing Council-Vice Chair
    770-906-4504 (Cell)

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  • 8.  RE: pay code, non-taxable

    Posted Dec 04, 2018 11:29 AM
    ​Thank you for all your valuable input!

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    Diana Robbins
    Davis Door Service Inc.
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