Understanding Year-End Setup for Puerto Rico

If your organization has employees who worked in Puerto Rico during a tax year, you must create 499R-2 forms for tax reporting purposes when you process the year-end information for that tax year. To set up employees who work in Puerto Rico correctly, you must set them up as statutory employees.

See Setting Up Information in Box 13.

Additionally, you must assign each employee record the proper tax area and tax method. When you assign the correct tax method, the history records that are created as a result of the payroll process are assigned the appropriate tax history type. The payroll system generates 499R-2 forms for employees who work in Puerto Rico based on the tax history type.