PeopleSoft Enterprise Global Payroll for United States 9.1 PeopleBook

Setting Up Taxes

This chapter provides an overview of taxes and discusses how to:

Set up year-end reporting companies.
Set up tax location information.
Define state withholding tax (SWT) marital statuses.
Define state and county income tax rates.
Maintain company tax information.
Maintain payee tax information.

Understanding Taxes

This section discusses:

Federal taxes.
State and territory taxes.

Federal Taxes

PeopleSoft Global Payroll for United States enables you to calculate and process:

Federal withholding tax (FWT).
Old age, survivors, and disability insurance (OASDI) tax.
Medicare tax.
Federal Unemployment Tax Act (FUTA) tax.
Advanced Earned Income Credit (EIC).

State and Territory Taxes

PeopleSoft Global Payroll for United States enables you to calculate and process state income tax. In addition, for states that allow it (currently only the state of Indiana), the system enables you to manage the distribution of the state-level advanced EIC.

Setting Up Year-End Reporting Companies

To define year-end reporting companies, use the Year End Reporting Company USA (GPUS_YE_CO_TBL) component.

Before you calculate payrolls or generate tax reports, you must set up year-end reporting companies.

Page Used to Set Up Year-End Reporting Companies

Page Name	Definition Name	Navigation	Usage
Year End Reporting Company USA	GPUS_YE_CO_TBL	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, Year End Reporting Company USA, Year End Reporting Company USA	Set up year-end reporting companies.

Setting Up Tax Location Information

To set up tax location information, use the Tax Location USA (GPUS_TAX_LOCATION) and Department USA (GPUS_DEPT) components.

This section discusses how to:

Define tax location codes.
Assign tax location codes to departments.

Pages Used to Set Up Tax Location Information

Page Name	Definition Name	Navigation	Usage
Tax Location USA	GPUS_TAX_LOCATION	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, Tax Location USA, Tax Location USA	Define tax locations.
Department USA	GPUS_DEPT	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Department USA, Department USA	Assign tax location codes to departments.

Defining Tax Location Codes

Access the Tax Location USA page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, Tax Location USA, Tax Location USA).

State

Enter the work state for the location that you are defining.

Alaska Area Code

Select the appropriate area code if you are defining a tax location that includes the state of Alaska. This code appears on certain Alaska quarterly reports.

County

Select the county for the location that you are defining. This field is available only if you select MD in the State field.

County Name

Displays the name of the county you select.

Rate

Displays the tax rate for the county you select.

Assigning Tax Location Codes to Departments

Access the Department USA page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Department USA, Department USA).

Tax Location

Enter a tax location code for the department. Newly hired payees from this department automatically have this tax location associated with their tax profile if the Populate Payee Tax Data check box is selected on the Installation Table USA page. In addition, if you enter a new location for a department on this page, the system creates a new tax profile row for payees associated with the department.

Note. For default tax location to be provided, Integration Broker must be set up, and Workforce_Sync and GPUS_JobSync must be active.

Defining State Withholding Tax Marital Statuses

To define state withholding tax (SWT) marital statuses for individual states, use the SWT Marital Status USA component (GPUS_SWT_MAR_STAT).

Page Used to Define SWT Marital Statuses

Page Name	Definition Name	Navigation	Usage
SWT Marital Status USA	GPUS_SWT_MAR_STAT	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, SWT Marital Status USA, SWT Marital Status USA	Define SWT marital statuses.

Defining SWT Marital Statuses

Access the SWT Marital Status USA page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, SWT Marital Status USA, SWT Marital Status USA).

Enter the effective date and a description of the marital status.

Note. The Comments are supplied by default from the Description field on the State Tax Data page.

Important! The PeopleSoft system delivers all existing marital statuses for each state. These should not be modified. You can use this page to create a new marital status to test an upcoming change in tax legislation.

Defining State and County Income Tax Rates

To define state and county income tax rates, use the State Tax Rates USA (GPUS_TAX_ST_TBL) and County Tax Rates USA (GPUS_LOCAL_TAX) components.

This section discusses how to:

Define state tax rates.
Define withholding rates.
Define state taxable gross exclusions.
Maintain county tax rates.

Important! The PeopleSoft system delivers all existing tax rate information for each state. This information should not be modified. You can use the pages of this component to view tax rate information and to test upcoming changes in tax legislation that affect tax rates.

Pages Used to Define State and County Income Tax Rates

Page Name	Definition Name	Navigation	Usage
State Tax Rates USA	GPUS_TAX_ST_TBL2	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, State Tax Rates USA, State Tax Rates USA	Define state tax rates.
Withholding Tables	GPUS_TAX_ST_TBL	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, State Tax Rates USA, Withholding Tables	Define withholding rates.
Other State Rates	GPUS_TAX_ST_TBL3	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, State Tax Rates USA, Other State Rates	Define other tax rates.
County Tax Rates USA	GPUS_LOCAL_TAX	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, County Tax Rates USA	Maintain county tax rates.

Defining State Tax Rates

Access the State Tax Rates USA page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, State Tax Rates USA, State Tax Rates USA).

Note. Many of the fields and field values on this page apply only to specific states.

Annualized Formula	Indicates the formula that the system uses to calculate annualized state income tax.
FICA Method (Federal Insurance Contributions Act method)	Indicates the method that the system uses to calculate FICA credits.
State EIC Percent (state earned income credit percent)	Indicates the percentage of federal EIC that comprises the state EIC.
Round to Nearest Whole Dollar	Selected to specify that the system round calculated state income tax to the nearest whole dollar.

Standard Deductions

This group box contains the state-specific standard deductions that the system references when calculating state income tax.

Allowances and Exemptions

This group box contains the state-specific allowances, exemptions, and maximum SWT base and limits that the system references when calculating state income tax.

Credits

This group box contains the state-specific credits that the system references when calculating state income tax.

Supplemental Method

Paid with Regular Wages and Separate Payment	Indicates the method by which the system determines the tax for supplemental income. Many states have a supplemental method for the Paid with Regular Wages payment method that differs from the supplemental method specified for the Separate Payment payment method. If either of these fields has a value of Multiple Rates, the Special Rate field becomes available.
Supplemental Rate	Indicates the percentage by which the system multiplies the taxable gross when calculating tax for supplemental income. This field applies only to the payment methods with a supplemental method of Aggregate-No Tax else Percent or Percent of Taxable Gross. For example, for the state of Colorado, the supplemental method specified in the Separate Payment field is Percent of Taxable Gross and the supplemental rate is 4.63. That means that for supplemental payments, such as bonuses, that are paid separately from regular wages, the system multiplies the taxable gross of the supplemental payment by 4.63 percent to determine the state tax.
Special Rate	Indicates the percentage by which the system multiplies special supplementary income, such as stock. This field applies only to the payment method with a supplemental method of Multiple Rates.

Defining Withholding Rates

Access the Withholding Tables page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, State Tax Rates USA, Withholding Tables).

This page lists all of the state-specific wage brackets and withholding rates referenced by the SWT calculation process.

Defining State Taxable Gross Exclusions

Access the Other State Rates page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, State Tax Rates USA, Other State Rates).

Enter elements here that you want excluded from the calculation of taxable gross. For example, if a deduction is a member of the before tax deduction accumulator for all states, you can exclude the deduction from the calculation for a specific state using this page.

Maintaining County Tax Rates

Access the County Tax Rates USA page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, County Tax Rates USA).

Use this page to maintain the resident tax rate for a county within a given state.

Maintaining Company Tax Information

To maintain company tax information, use the Company Federal Tax Data USA (GPUS_FWT_ER) and Company State Tax USA (GPUS_CO_STATE_TAX) components.

This section discusses how to:

Maintain company federal tax information.
Maintain company state tax information.

Pages Used to Maintain Company Tax Information

Page Name	Definition Name	Navigation	Usage
Company Federal Tax Data USA	GPUS_FWT_ER	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, Company Federal Tax Data USA, Company Federal Tax Data USA	Define company-level federal tax information.
Company State Tax Data USA	GPUS_CO_STATE_TAX	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, Company State Tax USA, Company State Tax Data USA	Define company-level state tax information.

Maintaining Company Federal Tax Information

Access the Company Federal Tax Data USA page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, Company Federal Tax Data USA, Company Federal Tax Data USA).

FICA Status Employer

Select whether the company is subject to OASDI and Medicare taxes.

Subject	Select for companies subject to both OASDI and Medicare taxes. This is the default option.
Exempt	Select for companies exempt from OASDI and Medicare taxes.
Medicare Only	Select for companies subject to Medicare taxes only.

FICA Status Employee

Select the default FICA status for the payees of the company. You can override the FICA status of individual payees on the Maintain Tax Profile USA page.

See Maintaining Payee Tax Profiles.

Subject	Select to designate payees as subject to both OASDI and Medicare taxes. This is the default option.
Exempt	Select to designate payees as exempt from OASDI and Medicare taxes.
Medicare Only	Select to designate payees as subject to Medicare taxes only.

FUTA Status

Select whether the company is exempt from FUTA. By default, all companies are not exempt.

Note. The system sets the default FUTA status for a payee for the initial hire row only.

Maintaining Company State Tax Information

Access the Company State Tax Data USA page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Taxes, Company State Tax USA, Company State Tax Data USA).

Enter the employer identification number (EIN) that the company uses to report and pay SWT.

Maintaining Payee Tax Information

To maintain payee tax information, use the Maintain Tax Profile USA (GPUS_EE_TAX), Maintain Tax Data USA (GPUS_EE_FWT), and W-4 Tax Information USA (GPUS_W4_DATA) components.

This sections discusses how to:

Maintain payee tax profiles.
Maintain federal tax data.
Maintain state tax data.
Use self-service to maintain tax data.
Maintain URLs to tax forms on third-party servers.

Pages Used to Maintain Tax Information

Page Name	Definition Name	Navigation	Usage
Maintain Tax Profile USA	GPUS_EE_TAX	Global Payroll & Absence Mgmt, Payee Data, Taxes, Maintain Tax Profile USA, Maintain Tax Profile USA	Create and maintain payee tax profiles.
Federal Tax Data	GPUS_FWT_EE	Global Payroll & Absence Mgmt, Payee Data, Taxes, Maintain Tax Data USA, Federal Tax Data	Maintain federal tax information for individual payees.
State Tax Data	GPUS_SWT_EE	Global Payroll & Absence Mgmt, Payee Data, Taxes, Maintain Tax Data USA, State Tax Data	Maintain state tax information for individual payees.
Arizona Withholding Update USA	GPUS_AZ_WHLD_UPD	Global Payroll & Absence Mgmt, Year-End Processing, Arizona Withholding Update USA, Arizona Withholding Update USA	Run the Arizona Withholding Update Application Engine (GPUS_AZ_WHLD) process. For payees with Arizona SWT data, this process updates the Arizona percentage of federal withholding based on the current state-defined values.
W-4 Tax Information	GPUS_W4_DATA	Self-Service, Payroll and Compensation, W-4 Tax Information USA, W-4 Tax Information	Maintain W-4 tax information.
Submit Confirmation	EO_SUBMIT_CONFIRM	Click the Submit button on the W-4 Tax Information page.	Confirm changes to W-4 tax information.
URL Maintenance	URL_TABLE	PeopleTools, Utilities, Administration, URLs, URL Maintenance	Maintain the URLs for links that access official tax forms on third-party servers.

Maintaining Payee Tax Profiles

Access the Maintain Tax Profile USA page (Global Payroll & Absence Mgmt, Payee Data, Taxes, Maintain Tax Profile USA, Maintain Tax Profile USA).

Tax Location

Enter a tax location for the payee. The system populates the fields in the Employee Tax Distribution group box with the state and distribution percentage associated with the tax location that you select. If the payee belongs to a department with which you associated a tax location using the Department Table USA page, the system automatically populates this field.

Note. When you save this page, the Federal and State Tax Data pages are populated. You can then access these pages to update or modify the data.

See Assigning Tax Location Codes to Departments.

FICA Status (Federal Insurance Contribution Act status)

By default, the value of this field is based on the FICA Status Employee option selected on the Company Federal Tax Data USA page.

You can override the default value by selecting:

Subject: For payees subject to both OASDI and Medicare taxes.

Exempt: For payees exempt from OASDI and Medicare taxes.

Medicare Only: For payees subject to Medicare taxes only.

Tax Report Type

Select the report type that indicates which year-end form the system uses to report annual earnings and taxes.

Employee Tax Distribution

This group box displays the state and tax distribution information associated with the tax location that you select for the payee. If you select a tax location that includes a specified county, the system displays the County, County Name, and Rate fields in this group box.

View Federal Tax Data	Click to access the Federal Tax Data page for the payee.
View State Tax Data	Click to access the State Tax Data page for the payee.

Note. Federal tax data and state tax data records are created after the Tax Profile page is saved. When a payee's tax profile is saved, links to the Federal/State Tax Data pages become available, enabling you to modify the tax information.

Maintaining Federal Tax Data

Access the Federal Tax Data page (Global Payroll & Absence Mgmt, Payee Data, Taxes, Maintain Tax Data USA, Federal Tax Data).

Tax Marital Status

Select the payee's tax marital status for FWT (Federal Withholding Tax). The default value is Single.

Withholding Allowances

Enter the number of allowances that the payee claims for FWT purposes. The default value is zero.

Special Tax Withholding

None	Select if the payee has no special tax status. With this option, the system calculates FWT based on the payee's taxable gross, marital status, and withholding allowances. If you select this option and specify an amount or percentage in the FWT Additional Withholding group box, the system calculates taxes based on the information in the tax table and withholds the additional withholding amount indicated.
Do Not Maintain Taxable Gross and Do Not Withhold Tax	Select to disable the tracking of federal taxable gross balance and the calculation of federal income tax for the payee.
Maintain Taxable Gross; FWT Zero Unless Specified in "FWT Additional Withholding"	Select to override the normal tax calculation with the amount or percentage indicated in the FWT Additional Withholding group box. The system determines taxable gross for FWT using the individual earnings paid to the payee. The tax withheld becomes either a flat amount or a percentage of the federal taxable wages.
Flagged for IRS	Select to flag W-4s for transmission to the IRS.

W-4 Processing

None	Indicates that W-4 processing does not apply to the payee.
Notification Sent	Indicates that you notified the payee that he must submit a new Form W-4.
New W-4 Received	Indicates that you received a new Form W-4 from the payee.

FWT Additional Withholding

Use the fields in this group box to withhold additional FWT. The effect that these fields have on tax calculation depends on the option that you select in the Special Tax Withholding group box.

Amount	Enter an additional flat amount to withhold.
Percentage	Enter an additional percentage to withhold. The system calculates the additional withholding using a percentage of the payee's taxable wages.

Special Tax Other

Exempt from FUTA (exempt from Federal Unemployment Tax Act)	Select to exempt the payee from FUTA. If you select the Exempt from FUTA check box on the Company Federal Tax Data USA page, the Exempt from FUTA check box on this page is selected for payees of that company.
Use Total Wage for Multi State	Note. This field is for future use.

Lock-In Details

Letter Received	Select to indicate that you received a letter from the Internal Revenue Service specifying the number of allowances that the payee is allowed to claim.
Limit on Allowances	Enter the maximum number of allowances that the payee can claim. The value that you enter in the Withholding Allowances field is not allowed to exceed this number.

Earned Income Credit

Earned Income Credit

Select the EIC eligibility of the payee. Values are:

Not Applicable: Select if the payee is ineligible for the credit.

Single, or Head of Household: Select if the payee is eligible for the credit and is single or claims head of household status.

Married Without Spouse Filing: Select if the payee is eligible for the credit, is married, and has a spouse who does not file a tax return.

Married, Both Spouses Filing: Select if the payee is eligible for the credit, is married, and has a spouse who also files a tax return.

W-5 Processing

A payee must submit a Form W-5 to receive advance EIC payments with each paycheck. The fields in this group box indicate the status of the payee's Form W-5.

None	Indicates that W-5 processing does not apply to the payee.
Notification Sent	Indicates that you notified the payee that he must submit a new Form W-5.
New W-5 Received	Indicates that you received a new Form W-5 from the payee.

Maintaining State Tax Data

Access the State Tax Data page (Global Payroll & Absence Mgmt, Payee Data, Taxes, Maintain Tax Data USA, State Tax Data).

State Information

State	Enter the state for which you are entering tax data. Normally, the system populates this field automatically based on the tax location selected on the Payee Tax Profile page.
Resident	Select to indicate that this is the payee's state of residence.
Non Residency Statement Filed	Select if the payee completed the necessary nonresidency certificate.
UI Jurisdiction (unemployment insurance jurisdiction)	Select to indicate that this is the payee's work state and state of jurisdiction for unemployment insurance tax. Note. This check box must be selected for state income tax to be calculated.
SWT Marital Status (state withholding tax marital status)	Select the appropriate marital status for SWT (State Withholding Tax). Note. This field is has a value of N/A (not applicable) for states that do not use marital status for tax calculation.
Withholding Allowances	Enter the number of allowances that the payee claims for SWT. This number should match the number on the payee's state withholding allowance certificate.

Special Tax Withholding

None	Select if the payee has no special tax status. With this option, the system calculates SWT based on the payee's taxable gross, marital status, and withholding allowances. If you select this option and specify an amount or percentage in the SWT Additional Withholding group box, the system calculates taxes based on the information in the tax table and withholds the additional withholding amount indicated.
Do Not Maintain Taxable Gross and Do Not Withhold Tax	Select to disable the tracking of state taxable gross balance for the payee.
Maintain Taxable Gross; SWT Zero unless specified in "SWT Additional Withholding"	Select to override the normal tax calculation with the amount or percentage indicated in the SWT Additional Withholding group box. The system determines taxable gross for SWT using the individual earnings paid to the payee. The tax withheld becomes either a flat amount or a percentage of the federal taxable wages.

SWT Additional Withholding

Use the fields in this group box to withhold additional SWT. The effect that these fields have on tax calculation depends on the option that you select in the Special Tax Withholding group box.

Amount

Enter an additional flat amount to withhold.

Percentage

Enter an additional percentage to withhold. The system calculates the additional withholding using a percentage of the payee's taxable wages.

Note. The state of Connecticut has the ability to increase or decrease values that are entered as additional withholding.

Special Tax Other

Additional Allowances	Enter any additional allowances that the payee claims for California SWT.
SDI Status (state disability insurance status)	Note. This field is reserved for future use.
AZ PC of Federal Withholding (Arizona percentage of federal withholding)	Select a valid percentage of federal withholding that constitutes the SWT amount.
Exempt from SUI (exempt from state unemployment tax)	Note. This field is reserved for future use.
MS Annual Exemption Amount (Mississippi annual exemption amount)	Enter the annual exemption amount from the payee's completed Mississippi withholding exemption certificate. This exemption amount reduces the payee's taxable gross before the SWT calculation for each pay period.
CA Wage Plan (California unemployment plan)	Note. This field is reserved for future use.

Lock-In Details

Letter Received	Select if you received a letter from the state taxing authority that specifies the number of allowances that the payee can claim.
Limit on Allowances	Enter the maximum number of allowances that the payee can claim. The value that you enter in the Withholding Allowances field is not allowed to exceed this number.

Earned Income Credit

Earned Income Credit

Specify the EIC eligibility of the payee. Values are:

Not Applicable: The payee is ineligible for the credit.

Single, or Head of Household: The payee is eligible for the credit and is single or claims head of household status.

Married Without Spouse Filing: The payee is eligible for the credit, is married, and has a spouse who does not file a tax return.

Married, Both Spouses Filing: The payee is eligible for the credit, is married, and has a spouse who also files a tax return.

Using Self-Service to Maintain Tax Data

Access the W-4 Tax Information page (Self-Service, Payroll and Compensation, W-4 Tax Information USA, W-4 Tax Information).

This self-service page enables payees to update their W-4 tax information. They can change their marital status, change the number of allowances they are claiming, enter additional withholding amounts, and claim exemption from FWT. Payees can also indicate when the name that they have on record with the Social Security Administration changes. If they want to view or print a copy of the official Form W-4, they can click the Official Form W-4 link to access the form in PDF format.

Note. The Official Form W-4 link is to a third-party server. Therefore, you must use the URL Maintenance page to update the link periodically to make sure it is still valid.

Maintaining URLs to Tax Forms on Third-Party Servers

Access the URL Maintenance page (PeopleTools, Utilities, Administration, URLs, URL Maintenance).

Use this page to maintain the URL accessed by the Official Form W-4 link on the W-4 Tax Information self-service page. The URL identifier for the link is GPUS_W4_FORM. Make changes to the URL field to update the link.

State	Enter the work state for the location that you are defining.
Alaska Area Code	Select the appropriate area code if you are defining a tax location that includes the state of Alaska. This code appears on certain Alaska quarterly reports.
County	Select the county for the location that you are defining. This field is available only if you select MD in the State field.
County Name	Displays the name of the county you select.
Rate	Displays the tax rate for the county you select.

Tax Marital Status	Select the payee's tax marital status for FWT (Federal Withholding Tax). The default value is Single.
Withholding Allowances	Enter the number of allowances that the payee claims for FWT purposes. The default value is zero.