Create and maintain the records required for payroll tax calculations. Click Payroll Tax Reciprocity for an overview on this subject.
IRA, FUTA, SSA, Ohio Department of Taxation, Ohio SUTA, City Tax, etc.
Use Control Records' GL Entities for PR Deductions, Earnings, Taxes, etc,.Instead of Employees'.
Required for Payroll.
Referenced in Records: Job, Work Order, Payroll Tax Table, and Employee.
Referenced in Journals: Labor, Payroll Adjustment.
This release implements SDI (Box 14 on form W-2). To do so, the User 1 field in the applicable Tax Authority must be set to SDI. Tax Authority must also be set up as type Other.
Important Note: Box 14 - W2s:
The system uses the Tax Table to handle unemployment insurance, disability, etc. The Tax Table User1 fields may be used to specify the titles for unemployment, insurance, disability, etc. Only the Box 14 description should be entered, i.e FLI,TDI or SUI in the User1 field.
In previous releases, users could implement SDI (Box 14 on form W-2) by setting the User 1 field in the applicable Tax Authority to SDI. This functionality is still supported.
Main Tab
Note: this Help Topic lists the standard configuration of all fields that may be included in this record. If you are using a customized system, the fields displayed on your screen may not exactly match the order or status (required, optional, default, display-only, hidden, etc.) of the fields described in this Topic.
Tax Authority Id: (10 character, only . and - special characters)
A unique Id for this record: This field is required.
Tip: For Local Authorities, the Tax Authority Id and the corresponding Tax Table Id should be identical to correctly support employee withholding.
Tax Authority Name: (30 character)
A brief description. This field is optional but recommended.
Security Id:
If multiple location security is implemented on your centralized database system, this informational field displays the Security Id of the local user that created this record. If multiple location security is not implemented on your system, or if this record was created by a global user, this field will be blank.
Tax Type:
In previous versions, this field was an option field (with radio buttons) rather than an Id field. It is now implemented as an Id field due to an expanded number of tax types. These Id’s are maintained from within the Data-Basics software, and may not be changed by the user. The following Tax Types Id’s are now available:
EI (Canadian Users Only - Employment Insurance)
CPP (Canadian Users Only - Canadian Pension Plan)
Province (Canadian Users Only - Provincial Income Tax)
Federal (Federal Tax - US or Canada)
FICA (US Users Only: Federal Insurance Contribution Act)
FUTA (US Users Only: Federal Unemployment Insurance)
SUTA (US Users Only: State Unemployment Insurance)
State (US Users Only: State Tax)
Local (US Users Only: Local Income Tax)
Other (Other Income Tax – US or Canada)
Annualized Compute?
If this box is checked, wages will be annualized before the appropriate tax table is applied to them. Generally, if the taxes imposed by this taxing authority are bracketed (e.g., federal or state taxes), or if annual limits are applicable, check this box (by double-clicking on it or pressing the Spacebar).
An example of a taxing authority where the Annualized Compute? box should not be checked is for FICA tax: the associated tax table has only one tax rate detail line.
Check Label: (10 character)
The label you wish to appear on payroll checks for deductions of this type.
Check Label – Special Note for Canadian Users
All forms of income tax get grouped for like labels – so labels must be carefully entered for FED and Provincial tax the label must be the same. FED, ON and ON Health – Label "Tax" or "Income Tax" all the same that these taxes are grouped to avoid confusing your employees.
Employer Id: (20 character)
Your firm's TIN for this taxing authority.
State/Provincial:
If this is a state or municipal taxing authority, enter the appropriate two-character state code (OH, NY, CA, etc.).
Canadian Users:
For any provincial Tax Authority Records, you need to put the province code in this field to support T4 printing.
Deduction Records
For the deduction records for Union Dues or Charitable, need to populate field ‘Deduction User 1’ with Dues or Charitable, respectively.
Round Tax Amount?
If payroll tax deductions should be rounded, check this box (by double-clicking on it or pressing the Spacebar). If exact dollar amounts are to be calculated, this box should remain blank.
Credit Brackets By: Wage Tax
Reserved for future use.
Allowances for Other Deductions:
Allow Section 125?
If Section 125 deductions are allowed by this authority, check this box (by double-clicking on it or pressing the Spacebar). If Section 125 deductions are taxed, this box should remain blank.
Allow Section 401(k)?
If 401(k) deductions are allowed by this authority, check this box (by double-clicking on it or pressing the Spacebar). If 401(k) deductions are taxed, this box should remain blank.
Allow Other Pretax?
If deductions flagged as "Other Pretax" are allowed by this authority, check this box (by double-clicking on it or pressing the Spacebar). If Other Pretax deductions are taxed, this box should remain blank.
Allow Federal Tax?
If Federal Tax deductions are allowed by this authority, check this box (by double-clicking on it or pressing the Spacebar). If Federal Tax deductions are taxed, this box should remain blank.
Allow FICA Tax?
If FICA tax deductions are allowed by this authority, check this box (by double-clicking on it or pressing the Spacebar). If FICA tax deductions are taxed, this box should remain blank.
Allow CPP?
Canadian Users Only: Check this field if Canadian Pension Plan deductions are allowed.
Allow EI?
Canadian Users Only: Check this field if Canadian Employment Insurance deductions are allowed.
Allow Provincial?
Canadian Users Only: Check this field if Provincial tax deductions are allowed.
Allow RRSP?
Canadian Users Only: Check this field if Registered Retirement Savings Plan deductions are allowed (check on Federal and Provincial tax authority records, and on Ontario Health Premium record).
Allow PPIP?
Canadian Users Only: check this field if Province of Quebec tax for parental leave is allowed.
Credits for Other Deductions:
Credit % 125:
Credit % 401:
Credit % Other:
Credit % Federal:
Credit % FICA:
Credit % State:
Reserved for future use.
Credit % CPP?
Canadian Users Only: Enter the applicable credit percentage for Canadian Pension Plan deductions (allowed in the Federal and Ontario Province Tax Authority records).
Credit % EI?
Canadian Users Only: Enter the applicable credit percentage for Employment Insurance deductions (allowed in the Federal and Ontario Province Tax Authority records).
Credit % Provincial?
Canadian Users Only: Enter the applicable credit percentage for Provincial Tax deductions.
Credit % RRSP?
Canadian Users Only: Enter the applicable credit percentage for Registered Retirement Savings Plan deductions.
Credit % PPIP?
Canadian Users Only: Enter the applicable credit percentage for Province of Quebec Tax deductions.
Residual Withholding?
If this payroll authority allows its residents a payroll tax credit for wages earned in other authorities, this box should be checked.
Residual Tax Credit %
The Residual Tax Credit as a percentage.
Tax Authority User1: Tax Authority User2:
These optional fields may be used for entering any information your company wishes to retain (e.g., additional account numbers).
Important Note: Box 14 - W2s:
The system uses the Tax Table to handle unemployment insurance, disability, etc. The Tax Table User1 fields may be used to specify the titles for unemployment, insurance, disability, etc. Only the Box 14 description should be entered, i.e FLI,TDI or SUI in the User1 field.
In previous releases, users could implement SDI (Box 14 on form W-2) by setting the User 1 field in the applicable Tax Authority to SDI. This functionality is still supported.
General Ledger Tab
GL Account Id:
Enter the liability account for the employee's portion of the taxes.
GL Entity Id
Optional. The default Entity (department or profit center) to be credited during Compute Payroll. However, if a GL Entity Id has been entered in the Employee record, the credit will be applied to the Entity specified in the Employee record. If the GL Entity Id field is blank in the Employee record, the system will credit the GL Entity in the Tax Authority record (if the GL Entity is filled in). If the GL Entity is blank in both the Employee and Payroll Tax Authority records, a GL Entity will not be credited.
This behavior may be overridden via Use Control Records' GL Entities for PR Deductions, Earnings, Taxes, etc,.Instead of Employees'.
GL Expense Account Id:
If the employer is liable for this tax or a portion of this tax (e.g., FUTA, SUTA), enter the expense account for the employer's portion of the taxes. The GL Entity for the expense comes from the Job's Cost Code.
Note: See Employee Child Taxes Tab's - GL Expense Account override option:
The GL Expense Account Id in the Employee Child Taxes Tab enables the use of multiple GL Accounts for employer based taxes. This field can only be set if the selected P/R Tax Table has the Tax Employer? box checked (normally tax tables: FUTA, FICA-SSER, FICA-MC, SUTA). If this field is completed, the Compute PR function will use it to post to GL History instead of using the GL Expense account in the associated Tax Authority. If this field is blank, the system will continue to use the GL Expense Account in the Tax Authority.
Note: the sys-compute-payroll registry PRExpenseAccount option trumps the GL Expense Accounts on the Tax Authority and Employee Taxes tab.
Job Cost?
Check this box if taxes paid to this Authority should be written to Job Cost when a payroll check is printed.
Cost Category:
If the Job Cost? box is checked, enter the Cost Category to be used when this labor expense is written to Job History.
W-2 Category Employee
This field supercedes the use of the User 1 field for the handling of box 12 and 14 codes and titles for unemployment insurance. The User 1 field is still supported if this field is blank.
W-2 Category Employer
Reserved for Future Use.
PRS Tax Code:
Paycor Users:
The Exc Dept column on the Paycor report specifies the local Tax Auth a line is associated with. If the PRS Tax Code is set in this local Tax Authority record, it will be used to complete the Exc Dept column; if the PRS Tax Code field in the Tax Authority Type record is blank, the Tax Authority Id will be used to set the Exc Dept column. It is not necessary to set this field for State, Federal or Other Tax Authorities as these are not needed for Paycor reporting.
Paychex Users:
Paychex uses the information in State and Local Tax Authority records to populate the Override State and Override Local columns of its report. If the PRS Tax Code is set in the Tax Authority record, it will be used to complete the applicable Override State or Override Local column; if the PRS Tax Code field in the Tax Authority Type record is blank, the Tax Authority Id will be used to set the State or Local Override column.
Tax Authority User 1: Tax Authority User 2:
These optional fields may be used to record additional information required by your company or for reporting purposes.
Reciprocity Agreements Tab
Tax Auth Id:
This tab lists the authorities with which a reciprocal agreement exists for non-residents wages earned. Only authorities of a similar type (e.g., state, local or other) should be listed. The system now checks that the authorities entered on this tab are eligible for reciprocity with the Tax Authority on the Main tab.
Type: Description:
These informational fields specify the type of reciprocity agreement.
In a reciprocal situation, tax would be withheld for the authority of residence. The point of the reciprocity tab is to redirect withholding to the employee's authority of residence.
Example:
For example if you were filling in the record for Illinois Income State tax, the following states should be listed in the Reciprocal Agreement Tab: IA, KY, MI, WI
In a reciprocal situation, the authorities listed on authority A's reciprocal tab would list authority A on their reciprocal tab. To continue our example, note that Illinois is listed on the reciprocal tabs for the following states:
Authority: Reciprocal Tab:
IA IL
MI IL, IN, KY, MN, OH, WI
KY IL, IN, MI, WV, OH, WI
WI IL, IN, KY, MN, MI
States with No Payroll Tax
The following states do not impose any payroll tax for residents or non-residents: AK, FL, NV, NH, SD, TN, TX, WA, WY. However, if an employee lives in a state where payroll tax is withheld, payroll tax should be collected to the state of residence. To implement this, the reciprocal tab of states with no taxes should include every state where your employee might reside that does collect taxes. This makes sense if you recall that the point of the reciprocal tab is to redirect withholding to the employee's authority of residence. In this way, withholding for work performed in Texas by residents of other states would be correctly withheld.
Authority: Reciprocal Tab:
TX All States in which your employees that might work in Texas reside:
(e.g., CO, NM, LA, AR, KS, OK, etc.)
Arizona
Residents of CA, DC, IN, OR, and VA are exempt from Arizona state withholding tax for work done in Arizona as long as the tax is paid to the state of residence. Although Arizona does not implement reciprocal agreements per say, it would be set up as follows:
Authority: Reciprocal Tab:
AZ CA, DC, IN, OR, VA
Registry Tab
This tab is reserved for future use in W2 reporting - paper and electronic. Since this table is generic it may also be used for other purposes in the future.
Key: Value: Description:
Reserved for future use.