If you have an employee who qualifies for Federal Earned Income Credit (FEIC), you can set up Sage 50 to make these types of payments during payroll entry.
FEIC is a government program that allows eligible low-income individuals or families to receive a refund of a portion of their federal income tax liability on each paycheck. To qualify for the credit on each paycheck, the employee must have a qualifying child and fill out the Federal Form W-5. Married couples with a qualifying child are entitled to submit a W-5 form for each spouse (if both are employed). If only one of the married persons is employed, that employee may file a single W-5 form for the family.
If you subscribe to a Sage Business Care plan, you receive multiple FEIC calculations based on marital status, working status of each spouse, and who files the W-5 form. Read the instructions in the Formula box of the formula to make sure you select the correct calculation for each employee's situation.
If you do not subscribe to a Sage Business Care plan, you will still set up the payroll field, but you'll have to manually compute and enter the amount on the employee's paycheck.
There may be up to three steps to this procedure:
- Set up the FEIC employee payroll field.
- Apply the FEIC Sage-maintained formula to the FEIC employee payroll field if you subscribe to a Sage Business Care plan.