Tax Information Setup

Before you begin processing payroll for employees, you must set up tax information so that employee taxes are calculated properly. Tax amounts and some federal and state insurance amounts are calculated by a third-party software package called Quantum for Payroll Tax. Quantum for Payroll Tax is a product made by Vertex, Inc. that integrates with the JD Edwards EnterpriseOne Payroll system. You should also set up a corporate Tax ID for each taxing authority to which you report tax information.

The JD Edwards EnterpriseOne Payroll system passes information such as the taxing authority, taxable wages, exemptions, and supplemental wages to Quantum for Payroll Tax. For unemployment insurance, you must set up tables that Quantum for Payroll Tax uses to calculate the appropriate taxes.

You can also use the GeoCoder, another product made by Vertex, Inc. that can significantly reduce the effort required to assign tax code information. GeoCoder can automatically generate and assign state, local, municipal, and other codes to employee records for each state that you choose. To use the GeoCoder, you must use Quantum for Payroll Tax to calculate payroll tax information.

Setting up tax area information is not required for any system functions unless you are using the JD Edwards EnterpriseOne Payroll system. However, you might want to set up tax areas so that you can transfer this information to your payroll service provider. When tax areas are set up, the system can also automatically provide the appropriate codes to programs that you use for employee information and hiring such as Employee Master (P0801) and Employee Quick Hire (P060116Q).

You can use the Cost Center Tax Area Processing program (R079052) to automatically provide system level tax area information. You normally use this UBE when you are initially setting up the software, but you might also use it when adding a business unit or changing the address of a business unit. The Business Unit Constants program (P059051A) uses the tax area code that the Cost Center Tax Area Processing program supplies. This program also supports similar changes for Canadian organizations by supplying cost center tax area codes for provinces.

You can use the GeoCoder Employee Batch Processing program (R070103) to update information that you receive monthly from Vertex, Inc. You normally use this program when you initially set up the software, periodically after new employees are hired, and when employee addresses change. This program automatically updates the tax area (residence) and tax area (work) values on the country-specific form that is included in the employee hiring process. This form also supports a similar function for the Canadian hiring process.

Many companies are structured under multiple federal and state tax IDs, and they often operate in many different states. When an employee changes companies within a common paymaster group, JD Edwards EnterpriseOne Payroll can recognize and track their year-to-date State Unemployment Insurance (SUI) wages from the previous company so that the calculation of the tax is accurate and accumulation towards the annual limit does not start over.