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Create Local Taxes

Estimated reading time: 3 min

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
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