Set this up at Year End:
1)Setup an additional income, make it Omit from Net & Exempt from Social Security, Medicare, FUTA & SUTA – you need to check with your locality if you have local taxes to see if they want it showing as taxable wages or not. Also check with your state – most states do want it reported, but there are some exceptions.
2) Once setup, you need to assign this additional income to each Shareholder.
3) At the end of the year, you need to create a zero check (to show a paper trail) showing the amount for the year in the new additional income category. It will calculate taxes for Federal, State and local unless you’ve made them exempt. You will zero out the taxes so the net comes out to 0.00. Then create the check. Or if you prefer a YTD adjustment for the Shareholder/officer.
This will add the amount to box 1 for Federal taxable wages, box 16 for State taxable wages (if appropriate), and box 18 for Local taxables wages (if appropriate).