Understanding Tax Withholding and Override Information Entry

After you complete the Change Reason form, you can enter tax withholding and override information for a new employee or change existing employee information.

When you need to change tax withholding and override information that has already been entered, you can select Employee Tax Overrides - USA from the Employee Management menu (G05BE1).

You enter tax withholding and override information to indicate the number and type of exemptions that employees claim on their withholding allowance forms. Quantum for Payroll Tax, the tax calculation system that integrates with the JD Edwards EnterpriseOne Payroll system, uses this information to calculate employees' taxes each pay period. The system provides the tax area and tax type for federal income tax (tax type A) with no exemptions and no override withholding amount. If the employee has any exemptions, you must enter the number of exemptions. The system uses the number of federal exemptions to calculate all taxes unless you enter separate override records for state and local taxes.

Quantum for Payroll Tax currently supports percentage or flat amount overrides of federal and state tax calculations for non-supplemental pay. These flat or percentage amount overrides can be taken in addition to the taxes that the system calculates or they can replace the tax amounts that the system would calculate.

When an employee receives supplemental pay along with non-supplemental pay in the same payment, and that employee has tax amount overrides, the system uses the tax overrides when calculating the tax amount to be withheld from the employee's non-supplemental pay and uses the federal supplemental tables to calculate tax for supplemental pay. However, when an employee who has tax override amounts receives a payment containing only supplemental pay, the system disregards the federal tax overrides and taxes the employee using the applicable federal supplemental pay tax rates supplied by Quantum for Payroll Tax. These examples illustrate the differences in tax results when an employee receives supplemental pay and has tax overrides. Please note that the numbers in these examples are for illustration purposes only, and are not intended to reflect actual tax amounts as defined by governmental taxation authorities.