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HR and Payroll for Business Central

HR and Payroll for Business Central

State Withholding Calculating for the Wrong State in Payroll NOW

Cause

In Payroll NOW, state withholding is determined by two sources:

  • The employee payroll card (master data) — controls default state assignment.

  • The time file entries — can override the state on a per-entry basis.

If time entries were imported or created with the old state code before the employee record was updated, those entries will still calculate withholding for the previous state.

Resolution

  • 1. Navigate to Full Payroll Menu >> Employees >> Payroll Employees.

  • 2. Open the affected employee and verify the State field is set to the correct new state on the Payroll tab.

  • 3. Navigate to Full Payroll Menu >> Payroll Processing >> Payroll Time Entry.

  • 4. Review the time entries for the affected employee. Check the State column on each time line.

  • 5. Update any time entries that still reference the old state to the new state code.

Correcting Previously Processed Payrolls

If payroll has already been processed with the wrong state withholding, create journal entry corrections:

  • 1. Navigate to General Journals in Business Central.

  • 2. Create correcting entries to move the tax amounts from the old state’s G/L accounts to the new state’s G/L accounts.

  • 3. Post the journal entries.

Questions / Resources

If you have questions or comments please email support@integrity-data.com.

Last Review: March 2026

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