(USA) Entering U.S. Employee Tax Data

Specify the employee's special withholding tax status. The system calculates the withholding tax based on the value you select here and other factors.

See Special Withholding Tax Status.

• None: Select this option if no special tax status exists.

• Maintain taxable gross: Select this option to maintain taxable gross data without withholding any federal tax.

  Use this option for employees who claim exemption from withholding on their W-4 form.

  Note: An additional amount or percentage should not be entered when the Special Withholding Tax Status is Maintain taxable gross. The system issues a warning if you enter an additional amount or percentage, but does not prevent you from saving the data.

• No taxable gross; no tax taken: With this option, the system does not track federal taxable gross balance at all.

• Nonresident alien: Select this option if the employee is a non-resident alien as indicated on the W-4 form.

  For nonresident alien (NRA) employees in commercial organizations (not E&G), the system calculates the withholding tax based on the taxable gross, additional tax amount for NRA added to the taxable gross, and withholding allowances.

  See Special Tax Amts Page.

  (E&G) For nonresident alien employees in education and government organizations, the system determines the taxable gross for FWT based on earnings that exceed the treaty maximum amount defined on the Tax Treaty table. The system calculates FWT based on the taxable gross, additional amount for NRA added to the taxable gross, and withholding allowances.

Select the appropriate tax marital status for federal withholding taxes as indicated on the employee's completed Form W-4.

If the employee has selected "Married but withhold at single rate" on the W-4 form, you must select both the Single option and the check box marked "Check here and select Single status if married but withholding at single rate." This setting results in the employee being reported with marital status W.

Enter the number of allowances that the employee claims for FWT purposes. This number should match the number on the employee's W-4 form.

Use these fields to indicate that additional FWT taxes are to be taken. You can specify both an amount and a percentage, if appropriate. When you enter an additional percentage, the additional withholding is calculated by taking a percentage of the taxable wages.

The effect of this field depends on the option that you select in the Special Withholding Tax Status field.

See Special Withholding Tax Status.

Select this check box if the employee is exempt from FUT (Federal Unemployment tax). The default value comes from the FICA/Tax Details (Federal Insurance Contributions Act/tax details) page. You can override the default from the Company table for an employee.

Select this option if W-4 processing does not apply to the employee. This is the default value, which TAX103 resets automatically for those who fail to resubmit the W-4.

Indicates that the employee has been notified to submit a new Form W-4. This option is set by PY_W4_EE or manually.

Indicates that a new Form W-4 has been received. This option is set manually or through the W-4 Tax Information self-service transaction in PeopleSoft ePay.

Select this check box if a letter has been received from the Internal Revenue Service (IRS) specifying the allowances an employee is allowed to take.

Enter the maximum number of allowances possible. The value that you enter in the Withholding Allowances field cannot exceed the value that you enter in this field.

Select this check box to use taxable wages from all work states in the calculation of state taxes.

For states, such as Arizona, that base their calculation on a percentage of federal withholding tax (FWT):

• Select this check box to apply allocation or distribution percentage to the tax calculated.

• Select this check box to base the state withholding tax (SWT) on the allocated portion of FWT.

• Deselect this check box to not apply allocation or distribution percentage to the tax calculated.

  Deselect this check box to base the SWT on the entire amount of FWT.

For states, such as Alabama, Iowa, Missouri, and Oregon, that include a credit for FWT in their SWT calculation:

• Select this check box to use the allocated portion of the FWT as the credit in the SWT calculation.

• Deselect this check box to use the entire amount of FWT as the credit in the SWT calculation.

Select this check box if the employee has Pennsylvania W-2 reportable nonqualified deferred compensation amounts but does not have any Pennsylvania state taxable wages or state tax withheld for the tax year being reported.

Selecting this check box ensures that the system reports the Pennsylvania nonqualified deferred compensation on the employee's W-2 even though the employee doesn't have any reportable Pennsylvania earnings.

See Year End Processing: U.S., Puerto Rico, and the U.S. Territories Guide

Select a country from the list, or select one of the generic entries that are prefixed with $ that you may have established on the NR Alien Tax Treaty table (nonresident alien tax treaty table).

See (E&G) Setting Up 1042 Processing for Non-resident Aliens.

Select the appropriate treaty ID. If the employee is from a country with which the U.S. does not have a treaty, select NO TREATY.

If the NRA employee is a resident for tax purposes and files a W9, select Yes and enter the appropriate date in the Form W9 Effective Date field.

Employees who file a Form W9 that takes effect before the end of the current pay period are processed as if they did not have a treaty; their earnings are taxed as W-2 earnings instead of 1042 earnings.

Select No if the employee is from a country with which the U.S. does not have a treaty.

Enter the taxpayer ID number of the employee. If you enter a value here, the system uses this value instead of the social security number when producing the 1042 forms/magnetic media.

Select from these options:

• Subj Rule: (subject to rule): This is the default value for nonresident alien employees.

• Exempt: Select if the non-resident alien employee is exempt from the NRA withholding rule based on IRS specifications, such as a student or business apprentice from India.

• N/A (not applicable): Select for nonresident alien employees who are taxed as U.S. citizens.

The treaty expiration date appears. The system calculates the date based on the date of entry and rules that are established on the Tax Treaty/NR Data table.

If the NRA employee filed a Form 8223, select Yes and enter the appropriate dates in the Form 8233 Effective Date and From 8233 Expiration Date fields. Form 8223 is required for all income codes except 12 (royalties) and 15 (scholarships and fellowships).

If the NRA employee filed a Form W8 for scholarship and fellowship income or royalties, select Yes and enter the appropriate dates in the Form W8 Effective Date and Form W8 Expiration Date fields.

The earnings caps that apply to each earnings type as per the tax treaties for nonresident aliens.

For nonresident aliens, whose forms (8223 or W8-BEN) have been completed and are in effect, this is the tax rate that is applied to their income until the income exceeds the maximum earnings specified.

The tax rate that is applied to the nonresident alien employee's income if their forms (8223 or W8) have not been received.

When the Form 8233 Received field value is No, and Tax Rate Before Form Received is 0.999900, the system taxes the payment as Form W-2 earnings.

When the Form 8233 Received field value is No, and Tax Rate Before Form Received is any value other than 0.999900, the system taxes the payment as Form 1042-S earnings using the rate specified in Tax Rate Before Form Received field.

Select the state. Certain state-specific page elements are shown or hidden depending on the state that you select.

Select this check box if the state selected in the State field is the state of residence.

Select this check box if the employee has completed the necessary nonresidency certificate.

Select this check box if the state selected in the State field is the state of jurisdiction for unemployment insurance tax.

Select this check box if the employee's earnings are exempt from SUT. This field reflects the value entered in the Company Exempt from SUT (company exempt from state unemployment taxes) field on the Company table.

This field reflects the value of the SDI deduction on the State Tax table and is derived from the employee's SDI status entered on the Company table.

Select Exempt if the employee's earnings are exempt from SDI or Voluntary Disability Insurance tax.

Select Not Applicable if the state does not have state disability or does not require employers to carry private disability plans.

Select Subject if the employee's earnings are subject to SDI tax.

Select Voluntary Disability Plan if the company has a voluntary disability plan that covers the employee.

Specify the employee's special withholding tax (SWT) status. The system calculates the withholding tax based on the value you select here and other factors.

See Special Withholding Tax Status.

• None: Select this option if no special tax status exists.

• Maintain taxable gross: Select this option to override the normal tax calculation with the amount and percentage indicated in the Additional Amount and Additional Percentage fields. If those fields are clear, no state tax is withheld.

  When you select the Maintain taxable gross option and save, the system automatically enters X in the Tax Marital Status field, preventing state taxes from being withheld. If you subsequently select None to continue withholding state taxes, you must also enter the valid Tax Marital Status value for withholding. If you do not, when you save, the system displays a message saying that it is using the default SWT marital/tax status for the state and giving you an opportunity to change the withholding status before saving again.

  Note: Use this option for employees claiming exemption from withholding on the state equivalent of Form W-4.

• No taxable gross; no tax taken: With this option, the system does not withhold SWT and does not track state taxable gross balance at all.

• (E&G) Nonresident alien (Fed Rules) (nonresident alien; federal rules): Select this option to calculate state taxes using the same treaty rule as used for federal tax calculations.

Select the appropriate tax marital status for SWT. The system displays the associated description.

To prevent state taxes from being withheld, the combination of Special Withholding Tax Status = Maintain taxable gross and Tax Marital Status = X must be selected. When Maintain taxable gross is selected, the system automatically sets the Tax Marital Status field to X when you select Save. If you select a Tax Marital Status of X and the Special Withholding Tax Status field is not set to Maintain taxable gross, an error message appears saying that X is not allowed if Maintain taxable gross is not selected.

Enter the number of allowances that the employee claims for SWT purposes. This number should match the number on the employee's state withholding allowance certificate.

For states that have their own withholding allowances form, the system displays informational text explaining where this information appears on the state form.

Enter an additional flat amount to withhold. The effect of this field depends on the option that you select in the Special Tax Status group box.

Enter an additional percentage to withhold. The additional withholding is calculated by taking a percentage of the taxable wages.

If applicable, enter any additional allowances that the employee claims for SWT purposes.

For states that have their own withholding allowances form, the system displays informational text explaining where this information appears on the state form.

Enter the percentage of taxable gross that constitutes the Arizona state withholding.

Leave the value set at the default State/State (state disability plan and state unemployment) unless otherwise instructed by your organization's tax professionals.

Values are: DI Exempt/State (disability unemployment exempt/state), None/None, None/State, State/Exempt, State/State, Voluntary/Exempt, and Voluntary/State.

Indicate whether the withholding adjustment amount is an Increase or Decrease amount.

The system increases or decreases the employee's CT withholding only on payments of regular wages. If regular and supplemental wages are paid concurrently, the system applies the increase or decrease to the regular earnings only, and not to the supplemental wages.

Indicate whether the withholding adjustment amount is an Increase or Decrease amount.

The system increases or decreases the employee's Louisiana withholding only on payments of regular wages. If regular and supplemental wages are paid concurrently, the system applies the increase or decrease to the regular earnings only, and not to the supplemental wages.

Enter an annual exemption amount for the employee from the employee's completed Mississippi withholding exemption certificate. This exemption amount reduces the employee's taxable gross before the SWT calculation for each pay period.

Indicate the employee's status for the New Jersey Family Leave or New York Paid Family Leave Insurance tax:

Select Exempt if the employee's earnings are exempt from the FLI tax.

Select Subject if the employee's earnings are subject to FLI tax.

Select Voluntary Plan if the company has a voluntary family leave insurance plan that covers the employee.

(E&G) This check box is visible only if Education and Government is selected on the Installation table - Products page. Select to indicate that the employee is a participant in a government pension or retirement plan of the Commonwealth of Puerto Rico. The employee's government or retirement plan contribution is factored into the withholding calculations.

Select from the following values:

• Eligible/Accepted

• Eligible/Not Accepted/Covered

• Eligible/Not Accepted/No Cover

• Not Applicable

• Not Eligible

• Seasonal

This check box appears only if the state is WI and the Special Tax Status is Maintain Taxable Gross.

Select this check box if you want the amount entered in the Additional Amount field to be treated as a flat withholding amount and used in reciprocity calculations. For example, if an employee lives in California and works in Wisconsin and files a WI WT-4A indicating that $100 be deducted as a Wisconsin additional amount, then selecting this check box ensures that employee's California withholding is reduced by $100 as required by the reciprocity rules.

Select this check box if a letter has been received from the state taxing authority that specifies the allowances an employee is allowed to take.

Enter the maximum number of allowances possible. The value that you enter in Withholding Allowances field cannot exceed the value that you enter in this field.

Select the locality that the employee lives or works in. If the employee lives or works in multiple localities, enter a row for each different locality an employee pays taxes in. Define localities on the Company Local Tax Table page.

Select this check box if the locality selected in the Locality field is a resident locality. An employee can have more than one resident tax locality. You may need more than one resident locality entry in cases where two different taxes exist for the same locality, such as a municipality tax and a school district tax.

(IN) This check box appears only when the state selected is Indiana and the Resident check box is deselected.

For a nonresident employee working in Indiana, county tax must be calculated and withheld for the entire year based on the Indiana County of Principal Employment as of January 1 entry that is specified on the employee’s completed Indiana Form WH-4 for the current year. For a nonresident employee, select the County of Principal Employment check box to identify this locality as the Indiana County of Principal Employment that is specified on the employee’s Form WH-4.

Select another work locality if you have more than one work tax for a given locality. The entry in this field is used to link to another local work tax code.

See Understanding Split Local Tax Distribution for KY, AL, and OR.

Specify the employee's special withholding tax status. The system calculates the withholding tax based on the value you select here and other factors.

See Special Withholding Tax Status.

• None: Select this option if no special tax status exists.

• Maintain taxable gross: Select this option to override the normal tax calculation with the amount and percentage indicated in the Additional Amount and Additional Percentage fields. If those fields are clear, no local tax is withheld.

• No taxable gross; no tax taken: With this option, the system does not track local taxable gross balance at all.

Enter the marital tax status for local withholding taxes. Depending on the locality that you selected, different field values appear.

Enter the number of allowances that the employee claims for local withholding tax purposes.

Use these fields to indicate that additional LWT taxes are to be taken. You can specify both an amount and a percentage, if appropriate. The effect of this field depends on the special tax status option that you select.

See Special Withholding Tax Status.