I can not figure out how to do a pay raise mid pay period.  
There is only one line available for hourly rate and I have two different rates to add to a pay check.  
Is it possible to do two separate pay checks for one period?  Would this affect taxes?

We cheat even worse. We time raises to the beginning of a pay period. Promotions, too.  
 
Once in awhile we still have to make a mid period change, and then they figure the two-weeks worth of pay, divide by 80 hours, and change the rate to the "blended" number for one payroll, then have to change it again for the next payroll.

Calling a raise sick pay can create its own set of problems, particularly if you pay sick pay and it's earned by the hour worked. In Payroll M set defaults, you have three un-named categories. We have set them up for Raise, Shift Diff, and Upgrade. We use Shift Diff for shift differentials, and Upgrade for work during the regular shift that pays at a higher rate (say, fine work on a scope as versus standard assembly). If a raise is granted mid-pay-period, we can just put in the raise amount and the number of hours on the fly for that pay period (ex. 24 hrs @ $0.25), then enter the new rate in his/her page after payroll is closed out, and can handle a shift differentail or an upgrade the same way. If employees have a regularly used differential or upgrade, you can set it up in Employee Info, Pay categories for each employee. Using this method of taking care of pay quirks allows us to keep our "regular" hours as reported for workman's comp rating, health/life insurance eligibility, etc. correct. The other items will report in their own collumns on reports, so they are a little easier to track.  
Hope this helps!
Ann Luce
EMI Filter Company