AMS - 2017 payroll tax changes (effective January 2017)

Follow the instructions below to update your AgManagement System (AMS) to reflect tax changes effective January 2017. (Tax information is taken from IRS Notice 1036, revision December 2016.)

Please pay close attention to notes in red. AMS has been incapable of fully supporting federal tax changes for several years now, but users have opted to continue using it by getting as close as possible to the published tax changes. Since state tax tables are "embedded" in the program, they cannot be changed and are now over ten years old! AMS also cannot support the Additional Medicare Tax that was added for 2014, but since it only affects employees making more than $200,000 per year, it may not affect most AMS users.

When making the changes specified below, be SURE to run AMS with a date in 2017 so payroll taxes are updated for the correct calendar year!

1 - Update FICA Employee rate and verify your FICA/FUTA/SUTA wage limits and your SUTA tax percentage rate

On the Payroll Utilities menu, run the "Payroll Parameters" option and proceed to page 2 (press [CTRL][ENTER] at screen 1 to accept values and continue).

Ensure that the "FICA (Employee)" Rate% is 6.2% for 2017.

Ensure that the "Limit" on the "FICA (Employee)" line is set to 99,999 as shown below. (NOTE: the actual 2017 FICA wage limit is now $127,200, but AMS payroll parameter entry allows a maximum of $99,999. For most remaining AMS users, this should not cause a problem. If you have employees earning in excess of $100,000 annually, you must either work around the issue manually or consider switching to an updated accounting/payroll system such as our Windows Accounting Made Simple.)

FUTA limit for 2017 is unchanged at $7,000. SUTA limit (or "Taxable Wage Base") is different for every state, and is shown on the SUTA rate notification you received from your state, as is your 2017 SUTA percentage rate. Note that values for columns other than "Limit" may be different in your data.

2 - Update your Federal Tax Tables

On the Payroll Utilities menu, run the "Federal Tax Tables" option and update the "Credit per withholding allowance" and all Single/Married/Rate values as shown below. NOTE: IRS Notice 1036 and IRS Publication 15 (Circular E) discuss special handling of "nonresident alien" workers, which AMS is not capable of doing. Since AMS has a limited number of wage bracket slots, the federal tax table shown below also excludes the highest wage bracket (over $420,000 per year).

3 - Ensure that no employees are marked as eligible for Earned Income Credit

Advance Earned Income Credit (EIC) is no longer allowed as of 2011 (this was a tax credit provided for low income employees with dependent children). The easiest way to handle this is to select each employee in the Enter Employees option, press F4 for Tax Setup, set "EIC Type" to "None", and save the employee record. (A problem in the Earned Income Credit Tables entry screen prevents you from easily zeroing all values in that table.)