1. Localization Information Guide
  2. Adjust an Employee's State Taxes After a Jurisdiction Correction

Adjust an Employee's State Taxes After a Jurisdiction Correction

In this example, you have found an employee with the wrong state jurisdiction configuration. Because of this, their state taxes were deducted for California instead of New York.

Having already corrected the jurisdiction error, you want to perform adjustments to the person's state tax and 401 (k) deductions.

  • This person has $9,318.72 as their subject withholdable income.

  • They need to be refunded $641.38 in California taxes and pay the appropriate amount in New York taxes

  • You want to perform these adjustments for your 3/31/2023 quarter-end payroll run.

This involves multiple steps.

What you need to do

How you do it

Ensure you created the eligibility links for the element

Use the Elements task to verify eligibility links exist for the Residence State Income Tax predefined element.

Check the employee balances before you adjust them

Use the Person Results task to confirm the results on the person's SOE for these tax balances.

  • SIT 401k Reductions

  • SIT Gross

  • SIT Pretax Reductions

  • SIT Reduced Subject Withholdable

  • SIT Subject Withholdable

  • SIT Withheld

Adjust the balances

Use the Adjust Individual Balances task to correct the affected balances.

Verify the adjustment

Use the Person Results task to verify you adjusted the balances correctly.

Pay the adjusted monies

Use the Calculate Payroll process for the next pay period to generate the adjustment payments.

For further info, see the following sections.

Create the Eligibility Links

You must ensure you have created the eligibility links for your elements. If not, the element isn't available for adjustment. In this example, you're adjusting the employee's Residence State Income Tax predefined element.

  1. View the element in the Elements task.

  2. Make sure you have established eligibility links for it.

Check the Employee Balances

Before performing the adjustment, verify the employee's current balance values.

  1. Start the Person Results task.

  2. Search for and select the employee.

  3. For the pay run you are adjusting, select Statement of Earnings.

  4. Navigate to their balance results from the SOE.

  5. Select the State Income Tax balance group, and click Search.

  6. In the search results, select the balance views of the balances related to state income tax.

    • SIT 401k Reductions

    • SIT Gross

    • SIT Pretax Reductions

    • SIT Reduced Subject Withholdable

    • SIT Subject Withholdable

    • SIT Withheld

    These balances include CA in their references.

  7. View the Residence State Income Tax run results. In this case, note the CA state geography code.

Adjust the Balances

To adjust the balances for the employee:

  1. Start the Adjust Individual Balances task.

  2. Search for and select the employee.

  3. Enter 3/31/2023 as the effective date.

  4. Select the Residence State Income Tax element.

  5. Enter the assignment number, if applicable.

  6. In Adjustment Values, select CA as the state.

  7. Enter these adjustment values.

    • Gross: -9318.72

    • Subject withholdable: -9318.72

    • Reduced subject withholdable: -9318.72

    • Tax calculated: -641.38

  8. In Costing and Payment Details, set the following.

    Field name

    What you select

    Include adjustment in payment balance

    Yes

    Include adjustment in costing process

    Yes

  9. Click Submit.

  10. Click OK.

  11. Repeat this process to perform another adjustment that enters a positive value for the New York tax deductions.

After you submit the balance adjustments, the task uses the Adjust Multiple Balances flow to submit the changes for the employee. It automatically generates a name for the flow that includes the name of the employee and the date of the balance adjustment. For example, if you performed an adjustment for Patricia Smith on March 31, it would name the flow Balance_Adjustment_Patricia_Smith_2023_03_31.

Verify the Adjustment

To review the balances after the adjustment:

  1. Start the Person Results task.

  2. Search for and select the employee you adjusted.

  3. Click Show Filters, and click Clear.

    This displays all search results.

  4. Enter 3/31/22 as the process date.

  5. Click OK.

  6. Click Search.

    The task displays the process details according to your search criteria.

  7. Click Adjust Multiple Balances to view the details of the adjustments you made.

    The California deductions should be refunded, and the appropriate New York taxes deducted.

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