Understanding Tax Status Setup for Deductions

You set up tax information for a deduction so that the system properly calculates any taxes that must be withheld from an employee's pay as a result of the deduction.

In some cases, you might need to indicate that a deduction is exempt from one or more types of taxes. For example, a deduction might be exempt from federal withholding tax but not from state withholding tax.

Important: Do not change taxable status for any DBA in the middle of the year. Previously calculated taxable amounts and taxes do not automatically change if the taxable status changes. You must enter an end date to the current DBA and create a new DBA with the new taxable status. If necessary, add the new DBA to your employee DBA instructions, using an appropriate start date.

See also:

• Understanding Payroll History

• "Reviewing Payroll History Information Online", in the JD Edwards EnterpriseOne Applications Payroll Implementation Guide