About credits and suspensions
To use Credits and Suspensions, first go to
Entity
settings and set the Credit/Suspension Threshold
amount. The system uses this amount to determine which amounts are available for suspension. By default, the threshold is set at 0.00. Any amounts below this threshold, such as amounts due for a collector, a location, or a tax area, are displayed in the Credits and Suspensions feature as available for suspension.If your company has a threshold for issuing checks, you can use this feature to suspend payments below that threshold. For example, if your company doesn't issue checks for amounts under $10.00 and you set the threshold at 10.00, amounts due to a collector under $10.00 are displayed in Credits and Suspensions.
The basic process for Credits and Suspensions consists of:
- Setting your threshold amount.
- Reviewing records in the current tax period that are below your stated threshold.
- Suspending records you don’t want to transfer to the tax returns.
- Suspending and reclassifying records you want to transfer to the tax return but to a different location, tax area, or tax type.
- Releasing suspended records in the aging schedule you now want to transfer to the tax returns.
- Applying current tax period amounts to suspension carryover amounts and re-classifications.
Current below threshold
With your Credit/Suspension threshold default set in Entity Settings and Compute complete after you have imported or input your balance data for the current tax period, any aggregate amounts that fall below your threshold will display in Current below Threshold. Utilizing the ledgers and or workpapers, you can determine and select which records you wish to suspend from the current tax period tax return in this section of the feature.
Any records not suspended will continue to be available for viewing or suspension in the Current below Threshold tab until data has been transferred into the tax returns.
Current suspensions
Records you selected to Suspend in Current below Threshold will be moved and display in Current Suspensions. When you review records you selected to suspend, you have the option to release them from suspension in this section of the feature. Records released will display again in Current below Threshold.
Current Suspensions gives you a view of records for the current tax period you have suspended with no further action and records you have taken action on by reclassifying them within Suspension Aging. Records with no further action will be suspended and those amounts won't transfer to the tax returns. If suspension tax amounts are reclassified, the suspended record will show the amount reclassified out in the Resolution column. A record will be added to the table showing into where the amount was reclassified.
Suspension aging
Records you suspended in the current or previous tax periods will display in Suspension Aging. When you review the records you have selected to suspend, you have the option to reclassify them in this section of the feature. You can reclassify the suspended amount to a different tax area, location, or tax type. You also have the capability to release a suspended amount into the current binder.
The suspension aging table gives you a view of all tax periods and what has transpired with your suspensions. For each record you can view its suspension history.
Records with no further action will be suspended and those amounts won't transfer to the tax returns.
If suspension tax amounts are reclassified, the suspended record shows the amount reclassified in the Resolution column. A record will be added to the table showing where the amount was reclassified. If suspension tax amounts are released, the suspended record shows the amount released in the Resolution column.
Suspension carryover
You may have suspended amounts from previous tax periods where the amounts haven't been fully applied and have been carried over. If you have balances available in the current tax period for the same location, tax area, and tax type that can be used against the suspended carryover amounts, those records will display in Suspension Carryover.
A suspended amount from a previous tax period without any amounts in the current tax period for the same location, tax area, and tax type that can be used against the suspended carryover amount still display in Suspension Aging. Records that have been reclassified display in this table.
In order for the amount shown as applied to actually be applied against the carried over suspended amount, action must be taken. When you reclassify suspended records in the Suspension Aging feature, action must also be taken in order for the reclassification to be utilized in the current tax period. You must use the apply functionality in this section of the feature.
note
- Credits and Suspensions is a process that should be utilized once you have imported, input, and computed your balance data for the tax period.
- If you selected to suspend records and find you need to add, or reclassify journal records requiring a compute, you'll need to release any suspended records prior to activating compute.
- Once you have applied an amount against a suspension carryover you shouldn't compute.
- If you find you need to work through credits and suspensions on a state by state basis and make adjustments requiring a compute, you'll need to compute by state and only compute the state for which you are making adjustments.
The tax amount displayed is the current tax period amount that can be used against the suspended amount. The carryover amount is the suspended amount carried over from the previous tax period. The applied amount is the amount of the current tax period amount that can be applied against the carried over suspended amount. The adjusted tax amount is the amount of tax to be reported on the tax return after the application of the applied amount. If the carried over suspended amount is greater than the current tax period amount, the adjusted tax amount to be reported on the tax return will be zero. In this case there would still be an amount in the carryover remaining field to be carried over to the next tax period.