If you are taking advantage of the Hire Act credit, you will need to make some adjustments to your accounting in addition to the changes that were needed for the 941. After you have submitted the Q2 941, make the following adjustments in the accounting system and Q3 941:

If the 941 shows a credit for the first quarter on line 12e, then make the following adjusting general journal entry:

1. Choose the period and date of the GJ entry based on whether the 941 for the second quarter shows an overpayment on line 15.

   If the Q2 941 shows an overpayment, then specify the period that has July 1, 2010 in it for the entry. If you have no outstanding balance in Q2 (line 15=0) then you put this GJ in the period that includes April 1, 2010.

2. Debit the liability account for US SS for the first quarter credit. Credit the US SS expense account.
3. Run Payroll/Configure/Taxes to update the US SS current liability. Reduce the existing amount by the amount of the first quarter credit from the 941.

If the 941 shows an overpayment for the second quarter on line 15:

1. If you are applying the overpayment to the third quarter, then you will want to update the 3rd quarter 941 to reflect that you are applying the overpayment. Go to Q3 941 and add the overpayment (941 line 15) to line 11. The software will add to that amount when remittances are calculated at the end of the quarter.
2. If you get a refund check, you should post the check amount to the SS expense account.

If the conditions for doing the GJ are met, then for the present the G/L account balances in the Payroll data will not get updated to reflect the first quarter credit. And the US SS liability account(s) will be overstated by the amount of the credit.

This will cause a special situation that the user will need to handle in remittance check processing. The liability from the G/L Account balance relating to US SS will be overstated creating an "Undistributed amount" condition in the Remittance Checks processing. The undistributed amount should be the amount of any first quarter credit.

The user will need to reduce the US SS liability G/L account balance by that amount to create a balanced, valid entry. We intend to provide a resolution to this G/L account balance discrepancy in a future update.