Courtesy Withholding Taxes

In some states, if an employee resides in a different city, county, or state and works in another, they might be required to pay taxes for both localities.

As their employer, you might not be required to withhold and deposit taxes for both.

Note: Individual local and state taxation rules vary. Consult with the appropriate tax authorities for complete compliance info on whether you're required to withhold.

For further info, see Oracle Cloud Human Capital Management for the United States: Courtesy Tax Implementation (2138998.1) on the Help Center.

Here's How the Courtesy Tax Withholding Hierarchy Works

Before you can set up your organization for courtesy withholding, you need to understand the hierarchy courtesy taxes use. Configurations at lower levels override those at higher levels.

1. First it checks the configuration on the payroll statutory unit (PSU).

2. Then it checks the tax reporting unit (TRU).

   Entries here override the PSU.

3. Then it checks the employee Tax Withholding card.

   Entries here override both the TRU and PSU.

How You Configure These Taxes

For instructions, see the following on the Help Center.

• Configure Courtesy Tax Withholding

• Configure County and City Withholding Rules for Courtesy Taxes

• Configure State Tax Withholding for Courtesy Taxes

How You Set Up Courtesy Tax Overrides

For instructions, see the following on the Help Center.

• Override Vertex Rules for State Courtesy Taxes

• Override Vertex Rules for City Courtesy Taxes

• Override Vertex Rules for Courtesy Taxes at the Employee Level

Where You Can Find Additional Info

For further info, see the following.

• All Documents for Cloud Applications HCM (1504483.1) on My Oracle Support

• Calculation Guide for the United States Vertex Payroll Tax Q Series