Step 1: In order to create, update or delete local taxes, navigate to Periodic Processing > Local Tax Rate / Limit Update.
- The Local Tax Update window will open:
Step 2: Action
- To add a local tax code, select Add.
- To update a local tax code, select Modify.
- To delete a local tax code, select Delete.
Step 3: Type
- Select the Local Tax type
Step 4: State Abbreviation
- Enter the state abbreviation for the state.
Step 5: Payroll Code
- Select the Payroll Code you would like to use to process this local tax code
- Note: If you selected Yes during the Assisted Setup to create local tax codes, your system will be set up with 4 local tax payroll codes by default
- LOCAL TAX RES – Local Tax Resident Locality
- LOCAL TAX SD – Local School District
- LOCAL TAX WK – Local Work Locality
- LOCAL BRACKET – Local Bracket
- You can select to tie your local tax into whichever “category” it is by using the default system local tax payroll codes or create your own
Step 6: Local Tax Code
- Enter the Local Tax Code you would like to use to identify your local tax
- Note: If you are using the Integrity Data Tax Filing Service, this local tax code must be a specific tax code which should be verified by contacting Integrity Data Client Services
Step 7: Local Tax Description
- Enter a Local Tax Description
Step 8: W2 Locality Code
- This correlates to box 20 on the W2 form
- Note: If you are using the Integrity Data Tax Filing Service and your local tax code identifies a locality within the state of Pennsylvania, the W2 Locality Code must be the Political Subdivision Code for that locality in order to ensure accurate tax reporting.
Step 9: Year
- Enter the tax year for the local tax code
Step 10: Local Tax Type
- Locality – This will identify the local tax code as a work locality
- School District – This will identify the local tax code as a school district
Step 11: Tax Percent
- Enter the tax percent for the local tax.
Step 12: Earnings Lower Limit
Step 13: Earnings Upper Limit
Step 14: Employee Withholding
- Mark as Yes if this is an employee withholding
Step 15: Employer Tax
- Mark as Yes is this is an employer tax
Step 16: State Withholding Allowances Apply
Step 17: Calculated on State Tax
Step 18: Resident Tax
- This will identify the local tax code as a resident locality