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 income taxes (SIT) 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. Navigate to their statement of earnings.

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

5. In the search results, select the balance views of the balances related to SIT.

   • SIT 401k Reductions

   • SIT Gross

   • SIT Pretax Reductions

   • SIT Reduced Subject Withholdable

   • SIT Subject Withholdable

   • SIT Withheld

   These balances include CA in their references.

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

Adjust the Balances

To fix the balances for an employee that was coded for the wrong tax jurisdiction, first go to the Payroll work area in My Client Groups.

1. Click Adjust Individual Balances.

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, click Add.

7. Select Residence state as the adjustment element.

8. Select Residence State Income Tax.

   Note: If you don't see the relevant elements here, confirm you set up the element eligibility and that the employee meets the eligibility requirements.

9. Select CA as the state.

10. Enter the appropriate balance adjustments to negate the entry to the California jurisdiction.

    • Gross: -9318.72

    • Subject withholdable: -9318.72

    • Reduced subject withholdable: -9318.72

    • Tax calculated: -641.38

11. 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

12. Click Submit.

13. Click OK.

14. Repeat this process to perform another adjustment that enters a positive value for the New York SIT 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.