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Beyond the Fiscal Cliff – How it Affects ACS

John Gilman January 3, 2013

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Unless you have been on a deep-woods backpacking outing for the last month, you have been hearing non-stop news coverage of Congress and their dealing with the January 1st Fiscal Cliff. As of late last night, Congress has signed a deal and we are now working though the details and how the ACS Payroll application is affected. There is only preliminary documentation available at this time and here is what we know so far:

1. The 2 % FICA tax holiday is over. As of 1/1/2013 the employees FICA percentage reverts back to the previous level of 6.2%.

2. There will be changes to the federal tax tables and some state tax tables.

3. The Medicare tax rate for employees that make over $200,000 will be increasing from 1.45% to 2.35% as part of the Affordable Care Act.

So what should you expect from ACS Technologies as far as updates to the Payroll module?

1. An immediate tax table update for the FICA 2% change. This was loaded on January 2nd (late night) for all OnDemand sites and be available by the end of the week for all non-OnDemand sites. You will need to have this update loaded before you process your first payroll for 2013.

2. A subsequent tax update with the remaining changes related to tax tables (upon final IRS publication) and to the new Medicare tax change. We cannot project at this time when the subsequent tax update will be available since we are still waiting on the offical government publication.

There is one caveat about the timing of the above updates. You will need to print your 2012 4th quarter 941 report either before loading the immediate FICA update (happening January 2nd for OnDemand sites) or after loading the subsequent tax update. Do not print the 941 report between these two updates due to the change in FICA percentage.

If you have any question on this, be sure to call the ACS Customer Support group

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