(Effective January 4, 2013)
2013 Payroll Tax Updates

Last Updated 1/7/2013 5:00 PM EST

READ THIS FIRST!

The mandatory programming change for the separation of FICA calculations for Employers at 6.2% verses Employees at 4.2% for 2012 has officially “expired” and your Infinity POWER Payroll program will automatically “revert” back to the 6.2% rate for both Employers and Employees automatically by simply changing your system date to any date within the calendar year “2013.”  This, of course, assumes that you are either on Version 7.3 or Version 7.4 with the latest updates!

No further software update is required for this change to the Employee’s portion of FICA.  However, as of Friday, January 4, 2013, the Internal Revenue Service (IRS) issued their final policies for 2013 based on the President signing the new bills from Congress.  The latest DP/Update available now will provide for all of the latest changes issued by the IRS, including an increase in an Employee’s Primary Exemption being raised from $3800 to $3900.

You must update your software to the latest version of Infinity POWER (Version 7.4 or Version 7.3) to get this update.  If Congress changes the rules later in 2013, another “DP/Update” download will be made available upon notification of the rule changes by the IRS.

Installing the Latest Updates

No Changes to W-2s or 1099s were made in 2012!

The 2013 Federal Tax Tables, as well as the State Tax Tables for all states which have reported their 2013 rates, have been updated. The 2013 Payroll Tax Tables updates are now published on the DP/Update download site for Infinity POWER users on Versions 7.3x and 7.4x. Users on any version number that is lower than Version 7.3 MUST upgrade to meet the current Payroll requirements. Further, these updates are available for Windows versions of the Infinity POWER products ONLY! This includes both the “Windows Graphical” and “Character-Based” versions of the Infinity POWER products. NO FURTHER programming releases are being made for SCO UNIX or LINUX.

If you are presently on Version 7.3 or higher and have a direct Internet connection on your accounting servers or workstations, you can now choose the “Check for Updates” option from the “Help” menu within Infinity POWER to download these files.

If you have a newer version of the Microsoft Windows Operating System (i.e. Windows 7 or Windows 8), you may be prompted by the system as to whether to allow the software to download the update from Data Pro Accounting Software. If you are prompted by a button that appears at the bottom of screen flashing, click on it and answer
Y(es) to continue the DP/Update feature.

As the update continues, the screen will display all of the updates for each software version in date sequence order for each update as it has been released. Therefore, the information shown on the following screen for Version 7.42, for instance, may appear further down in the update listing rather than directly at the top of the screen, based on whether you have completed any updates previously. You can scroll down to insure you have the latest update information to be posted to your system.

Choose to start the update and when completed successfully, the following screen will appear:

Click on the "Close" button to proceed.

Then, you will need to run the Payroll option "Update Tax Table From Master File" from the "Set Up and Maintenance" Payroll menu.  If you have a prior version of the product before Version 7.3, you will need to upgrade first to Version 7.4 (current version) before proceeding!

Users still have the option to input their table changes manually by using the Percentage Method of Withholding Tables in the Circular E published by the IRS for Federal Tax Tables and/or the State Tax Tables released by your state. Be sure to use the "Annual Tables" if you are inputting the tables manually.

***MICROSOFT SQL SERVER USERS***

If you have installed the Microsoft SQL Server database as your core database structure to be used with your Infinity POWER software applications (instead of FoxPro or dBase), the preceding option that allowed you to download the Payroll Tax Tables using the DP/Update option will have the files in the native "dbf" file format.

For SQL Server users, the "dbf" file format must first be converted into an SQL format before the Tax Tables in Payroll can be updated.Data Pro provides a standard utility with the Infinity POWER software programs that allows data files to be converted in both directions (dbf to SQL – SQL to dbf).Follow the next set of steps to prepare the Payroll Tax Table update for use in an SQL Server environment.

Using "Windows Explorer," go to the directory or folder where your Infinity POWER accounting applications are installed.This could be C:\POWER or another directory depending on how the software was originally installed.

Inside this folder, you will find on the list of files inside the folder a file called "CBSQLCvt.ext" as highlighted on the following screen:

Double click on this file and the following application will load as shown on the following screen:

Click on "File" and choose the first option for "CodeBase To SQL." This is the option that will convert a "dbf" file to the SQL file format.

A new screen will appear prompting you for key pieces of information.Most importantly is to first "Browse" under the "Directory" option to where your Infinity POWER programs are installed.This can be on any network or local drive letter and in any subdirectory or folder name as appropriate.

Next, enter under the "Company" field the three letters "SYS."These are for the system files that have been just downloaded by the DP/Update utility.Then, under the option "Select Listed Files to Convert" scroll down until you find the file specifically titled "SYSPR5.DBF."Make sure the rest of the files are "Unselected."

Under the "Conversion Options," click on the check box to "Confirm Overwrite."

When all of this is set as the following screen illustrates, click on the "Process" button to continue.

Once you click on "Process," the following screen will appear:

Click on "Yes" to continue the conversion to the SQL format

Once the files have been converted, the following screen will appear:

Now that this step has been completed for SQL Server Users, the rest of the steps are identical for ALL users regardless of which database is being used.

***W-2 CONFIGURATION***

If you have recently upgraded to Version 7.3 or higher from a version prior to 6.3, you must verify each employee's First and Last Name under the W-2 Info button under the "Set Up Employees" option in Payroll. The POWER Upgrade Utility will attempt to parse the existing name field into the new First and Last Name fields. Depending upon the format of your employees' names, adjustments may be necessary.

How to Update Your Tax Tables

(Windows GUI)

Note: Do not load these tax tables until the last 2012 payroll has been processed, backups of all program and data files have been made, and all required management reports have been printed. Tax table information should be updated just before the first 2013 payroll is run.

Once the 2013 Tax Table Updates have been loaded on your system AND after you have started the New Year's files for Payroll, follow these simple steps:

1. From the "Infinity POWER Main Menu," press the F3 key and change the system date to 01/01/2013.
2. Click on "Systems," and then select the option "Payroll."
3. Select the option "Perform Set Up and Maintenance."
4. Finally, choose the option "Update Tax Table From Master File."
5. Click on the "Start" button. When it is complete, the system will return you to the menu.

(Windows Character-Based)

Note: Do not load these tax tables until the last 2012 payroll has been processed, backups of all program and data files have been made, and all required management reports have been printed. Tax table information should be updated just before the first 2013 payroll is run.

Once the 2013 Tax Table Updates have been loaded on your system AND after you have started the New Year's files for Payroll, follow these simple steps:

1. From the "Infinity POWER Main Menu," press the F3 key and change the system date to 01/01/2013.
2. Then, select the option "Accounting Programs." Next, choose the option "Payroll System."
3. Select the option "Perform Set Up and Maintenance."
4. Choose the option "Perform Routine Maintenance." Then, choose the option "Set Up Tax Tables."
5. Finally, choose the option "Update Tables From Master File."
6. Press the ENTER key to begin the update process. When it is complete, the system will return you to the menu.

Repeat these steps for each company that has Payroll data files. Be sure to verify your company's unemployment tax rate for 2013 and adjust the appropriate state tax table(s) as shown in the following example. Make sure to use the rate sent to your firm by your state for 2013.

Remember to check the Federal tax tables against your Circular E and State Tax Tables with your State Tax Table Publications.  In the Windows Graphical version, to edit or verify either the Federal or State Tax Tables while in the Payroll module, choose the option "Perform Routine Maintenance."

Then, choose the option "Set Up Tax Tables."   Select the specific table to review or edit.  The following screen will appear:

When you click on the "Change" button and then the "Details" button on the bottom left of the screen, the following screen will appear that will allow you to edit the specfics of the tax table.

In the Windows Character-based version of the product, the details for editing are all on a single screen as shown in the following example.

For your records, this is what the Federal Tax Tables should look like at this point for 2013.

FICA Update Procedures (Windows GUI)

The Federal Government has changed the Social Security tax limit to $113,700 for 2013. To verify that your configuration is correct, follow these steps:

1. Click on "Systems," and then select the option "Payroll."
2. Next, select the option "Set Up and Maintenance." Then, select the option, "Payroll Configuration."
3. Then, choose the option "Set Up Master Information." Next, select the option "Payroll Configuration."
4. Finally, click on the tab "Master Configuration." Click on the "Social Security Limit" and verify that it is set to $113,700.00.
5. Your screen should look similar to the following:

Click "OK", to save your changes. Repeat these steps for each company that has Payroll files. 

For Character-based users, follow these steps:

1. From the "Infinity POWER Main Menu," press the F3 key and change the system date to 01/01/2013.
2. Then, select the option "Accounting Programs." Next, choose the option "Payroll System."
3. Select the option "Perform Set Up and Maintenance."
4. Choose the option "Perform Routine Maintenance." Then, choose the option "Set Up Master Configuration."
5. Choose the option "Change Master Configuration."
6. The following screen will appear where you can make the edits on Field #11 "Social Security Limit."

Social Security Tax %

When you perform the DP/UPDATE feature to get the latest software update, you will find it to be quite simple and will require NO Configuration of the software whatsoever. For example, if your system date is set prior to 01/01/2011 or after 12/31/2012, you will see and be able to edit the Social Security Tax Percentage rate field and the system will apply it to both the Employee and Employer portion of FICA.

The following screens illustrate how the Payroll Configuration screen looks in both the Windows Graphical Version as well as the Character-based Version of the Infinity POWER products. The current rate for both Employer and Employee is 6.2% and goes in the "Social Security Tax %" field as shown. No other fields are adjusted.

If your system date is set from 01/01/2011 to 12/31/2012, then you will NOT be able to change the Social Security Tax % field whatsoever. The software update does not allow any edits to the field as the programming change is "hard-coded" into the software and is "date sensitive." The system automatically calculates the Employee's tax rate at 4.2% and the Employer's tax rate at 6.2% if the system date of your computer is set within this date range. Once you set your date to 01/01/2013, it reverts automatically to 6.2% for both "Employee" and "Employer."

State Tax Table Updates

Data Pro Accounting Software updates the various states' tax tables as soon as their information is released. Unfortunately, many states do not release their annual changes prior to year end when we release all of the other Federal and other state changes.

Keep checking the DP/UPDATE feature of your software and the home page at www.dpro.com for the latest updates on the various States Tax Table update releases.

****Be sure to verify your company's unemployment tax rate for 2013 and adjust the appropriate state tax table(s) as shown in the following example. Make sure to use the rate sent to your firm by your state for 2013.

The master Payroll Tax Tables were updated for the 2013 Federal Tax and also all "States" that have reported changes as of this date for each state. This list will continue to be updated as additional states continue to provide their new information for 2013.

The following is a list of states that have already been updated: