The federal is fine. You don’t need to adjust anything, if it’s just one or two payrolls, the employee will make up the difference when they file their Income Tax for the 2011 year.

The Social Security DOES need to be adjusted. The best thing to do is figure out what it should have been on the paychecks you’ve already run, calculate the difference between the amount that was taken and the amount that should have been taken. Then on the next payroll, subtract out that amount from the calculated Social Security that comes up and enter the adjusted figure. (See example below) You will get a message “Value entered does not equal calculated value. 22.00 <>42.00” Click OK and Save. If the amount is too high to adjust in one payroll, you can split between multiple payrolls.

DO NOT click on the employee’s name again in the Calculate Pay window. If you want to check it, close out of Calculate Pay and look at it in the Review/Create Paychecks window. If you click it again in the Calculate Pay window, it will revert to it’s original calculation and your changes will not have been saved.

Example:

Gross wages were $1000.00 – SS that was deducted was $62.00, but should have been $42.00. Difference that was over withheld is $20.00.

Next payroll after updating to new version with updated tables, the SS shows the correct $42, but we need to account for the $20 that was overwithheld previously. So we’ll change the $42 to $22 and click Save.