Locality Tax Setup Review

KB15-005

Create the Payroll Code for the Withholding

• Full payroll menu
• Setup Column
• Payroll Codes
  • + New
  • Set the withholding up with all needed information

 

Set the Posting Setup for G/L Posting

• Full payroll menu
• Posting Setup
• Withholdings / Deductions

Set up the Local Tax Rate / and Wage Limit if needed

• Full payroll menu
• Periodic Activities column
• Periodic Processing…
• Local Tax Rate / Limit Update
  • Options group
    • Action – Add / Modify / Delete
    • Type – Local Tax
    • State Abbreviation
    • Payroll Code – Withholding code created for this taxation
    • Local Tax Code – Additional code for Tax Reporting
    • Local Tax Description – Description of tax code
    • W2 Locality Code – Code to report on the W-2
    • Year effective
    • Effective date will populate based on Year selection
  • Local Tax Percentage
    • Local Tax Type – Locality or School District
    • Tax Percent – percentage of tax (i.e. 1.5% is 1.50)
    • Earnings Lower limit if needed
    • Earnings upper limit if there is a cutoff of taxable earnings
    • Employee Withholding – On for yes, Off for no
    • Employer Tax – On for ER Tax, Off if not
    • State WH Allowances Apply – On if yes
    • Resident Tax – Defines if this is available on Resident box on state card. On for resident. Off for Work Locality.
  • Options Group

 

• • Local Tax Percentage Group

Once created – you are able to set the local tax on the EE State WH Records

To complete – Have to add the withholding to the payroll calculation lines

• Full payroll menu
• Setup column
• Payroll Calc. Formulas
  • Select + New
  • Code to match calc code
  • Type is Withholding
  • Payroll Code – Code created for local tax calc
  • Amount Type – Formula
  • Formula – Local Tax – Work for Work locality tax or Local Tax – Resident for Resident withholding
  • Formula ID and Calculation Sort should populate
  • Make sure the State Filter defaults based on Pay Code setup

Now you are ready to calculate the check and see the withholding populated.

 

Questions / Resources

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

If you would like to search for information and resources for Integrity Data products check out the following sites:

• Knowledge Base: https://www.integrity-data.com/knowledge-base/
• Videos: https://www.integrity-data.com/video-library

Last Review:      5/04/2021 – Revision: 0.0

Applies To:    Payroll Now

Keywords:  Tax, Local

Categories:  Payroll Now