How to add or edit a State/Local Tax Table

The State/Local Tax Tables option on the minor Payroll Tax Tables Menu builds and maintains your state and local tax tables. Multiple state and local tax tables may be maintained in your dataset. For example: your company may use a special tax table for head of household and another for all other employees. Each employee record may have only one state tax code and only one local tax code assigned. If the employee is transferred or earns income in a different state or locality, or if the employee qualifies as a head of household after the first payroll check, your payroll clerk must update the state and/or local tax table codes through the View/Edit Employee.

You will need to add a new NAM I.D. for the reporting entity.

If known, type the state tax code or local tax code in the State/Local Code input field. Press [Enter] to open a search selection box. If the tax table already exists, the remaining screens in the series are used to view or change the selected table. If the tax table does not already exist, your payroll clerk may add the table.

A positive response to the question "This table does not exist. Do you want to add it?" will create a new table. A negative response to this question repositions the cursor for further action.

A positive response to the question "Print Tax Table Report?" outputs screen prints of the selected tax table. A negative response to this question bypasses the output.

Screen 1 of 4

Enter the name of the state or locality for this table in the State/Local Name input field.

Enter your state-assigned employer identification number in the State Employer ID Number input field. Be sure this number is correct.

Enter the state-assigned annual wage ceiling amount for use in calculating unemployment tax in the State Unemployment Tax Ceiling input field.

Enter your state-assigned unemployment tax rate in the State Unemployment Tax Rate input field. The format of this input field is 1.0000 represents one percent.

Tax Calculation Formula

The tax calculation formula input fields in the lower section of Screen 1 of 4 controls the order for calculating the withholding amount for employees assigned to the tax table. The actual calculation of withholdings occurs during the Calculate/Print Register option on the minor Payroll Calculations Menu. Type a number from 1 and 9 in the Order input field to indicate the order of calculation. To exclude a step from the calculation, simply blank out the input field.

Begin with gross wages for the pay period. Adjusted Gross Wages are defined here as: (Gross less State Tax Exempt Deductions for the pay period)

Multiply by number of pay periods in 1 year. Multiply adjusted gross wages by number of pay periods in the year. This step is performed because state tax table amounts are listed for annual wages.
Subtract standard exemptions (if any). Standard exemptions are determined by multiplying the percentage rate for the number of exemptions times the adjusted gross.

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If the result is not zero but less than the minimum, the result is equal to the minimum.
If the result is not zero but greater than the maximum, the result is equal to the maximum.
If the number of dependents is not zero, multiply the number of dependents by the dependent dollar amount, and subtract from the result.
Subtract other exemptions (if any). Subtract other exemptions (if any) from the adjusted gross; use the same formula as for standard exemptions.
Subtract percent of federal taxes. Multiply the federal tax rate by the federal tax amount. If step 1 has not yet been completed because your payroll clerk has changed the sequence, then the federal tax amount will be multiplied by the number of pay periods in the year before multiplying by the rate.
Calculate tax from percentage tables. Using the tax table, determine the tax. Each level of income is multiplied by a different rate and then accumulated.
Divide the number of pay periods in 1 year. Divide the calculated state tax by the number of pay periods in the year.
Add employee's additional state withholding. Add any additional withholding amount.

Enter the precision to which you wish taxes to be rounded in the Round Taxes To The Nearest Multiple Of input field. To round to the nearest:

Penny enter .01
Dime enter .10
Whole dollar enter 1.0

Review all entries prior to continuing. Press [Escape] to redisplay the prior screen. A positive response to the confirmation question "Is this correct?" displays the next screen in the series. A negative response to this question repositions the cursor for further action.

Screen 2 of 4

The input fields on Screen 2 of 4 control the calculation of the tax deduction for each of the twenty deduction fields in the dataset for employees assigned to the specific tax table. The input fields on this screen reflect the descriptive titles assigned in Setup Information to the deductions. If descriptive titles have not been assigned to the deduction fields, you should skip this screen and return to it after assigning the titles.

The Tax Exempt? Input fields default N for not exempt and may be overridden. As indicated in the legend, in the input field to the right of each deduction:

Enter N for not exempt
Enter U for exempt from SUTA
Enter I for exempt from state income tax
Enter B for exempt from both

Screens 3 of 4 and 4 of 4

Screens 3 of 4 and 4 of 4 are similar in appearance and function. The input fields on screen 3 of 4 apply only to employees with S for single in the Martial Status field. The input fields on screen 4 of 4 apply only to employees with M for married in the Martial Status field. See the Wage Information screen in the View/Edit Employee series of screens.

Based on information provided by your state or local tax reporting agency, enter the dollar amounts and percentages in the appropriate input fields. Refer to the calculation formula for an explanation of the input fields on these two screens.

Standard Exemptions

The state and local tax tables contain input fields for specifying standard exemptions by percentage and/or minimum/maximum dollar amounts.

Enter a percentage in the appropriate Exempts Claimed Percent input field.

Enter a minimum dollar amount and a maximum dollar amount in the appropriate Exempts Claimed Minimum Amount input field and the Exempts Claimed Maximum Amount input field.

Enter the dollar amount allowed per dependent in the Plus # Of Dependents @ input field.

Other Exemptions

The state and local tax tables contain input fields for specifying other exemptions by percentage and/or minimum/maximum dollar amounts.

Enter a percentage in the appropriate Exempts Claimed Percent input field.

Enter a minimum dollar amount and a maximum dollar amount in the appropriate Exempts Claimed Minimum Amount input field and the Exempts Claimed Maximum Amount input field.

Enter the dollar amount allowed per dependent in the Plus # Of Dependents @ input field.

Federal Tax Exemption

If your state or locality exempts a percentage of federal income tax, enter the percentage in the Percent Of Federal Tax To Be Exempt input field. Be sure that this field is included in your calculation formula.

Withholding Percentage

Enter the percentage to withhold in the Withhold Percent input field and a dollar amount in the If Taxable Income Is Greater Than input field For example: if the first $1000 of taxable income is not subject to withholding tax, and all taxable income above $1000 is subject to 5% withholding, enter 5.00 in the first input field and 1000.00 in the input field to its right. The percentage rates may increase and decrease as the taxable wages increase.

Review all entries prior to continuing. Press [Escape] to redisplay the prior screen.

Processing

Now that the table is created it can be applied to the employee’s that will be using it. When payroll is processed the SJI mapping will record the tax information.

You may want to create a new LDG account to record these taxes separately. If you do you will need to map in SJI, otherwise these taxes will default to a generic Taxes Payable account.

When it comes time to pay the taxes print the State Wages Taxable Report. This report is also a process and will create vouchers for disbursement. Instructions can be found on this page: https://culturatech.atlassian.net/wiki/x/LQCrNQ