State Tax Withholding Rules
Vertex provides the tax rule data that determines:
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What resident state taxes the payroll process withholds for employees
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When it withholds them
Each state has its own withholding and reciprocity rules. For further info about each state's default behavior, see Calculation Guide for the United States Vertex Payroll Tax Q Series.
These tax withholding rules determine the available resident wage accumulation rules. The federal and state withholding forms provide the default tax withholding info for the payroll process.
Here's how you can change these rules.
What you want to do |
How you do it |
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Define default state and local withholding |
By default, the payroll process calculates state and local deductions based on the definitions provided by Vertex. For further info, see the Vertex Payroll Tax Calculation Guide for the United States. To override these values for your organization:
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Set the state and resident wage accumulation rules at the organization level |
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Set the state and resident wage accumulation rules for individual employees |
Use the Calculation Cards task to set resident wage accumulation rules at the state and local levels on the employee's tax card. This overrides the value you set at the organization level. |
For further info, see the following sections.
How You Define the Default State and Local Withholding
You can create regional components on a person's tax card that are based on their work and resident addresses.
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Use the Calculation Cards task to open the person's Tax Withholding card for editing.
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In Withholding Details, click Add Tax Withholding and select Create Default State and Local Withholding.
This automatically creates the regional components based on the employee's home and work locations.
You can find this value |
In this task |
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Home Address |
Person |
Resident Tax Address |
Person |
Location |
Employment |
Working at Home |
Employment |
Work Tax Address |
Employment |
How You Can Add Tax Withholding Info
You can manually add any appropriate State, County, and City components to a person's tax card. These components help identify and configure the relevant states in the Calculation Card Overview region of the card.
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Use the Calculation Cards task to open the person's Tax Withholding card for editing.
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In Withholding Details, click Add Tax Withholding and select Add Withholding Information.
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Use the State, County, and City fields to search for the appropriate jurisdictions. Select the locations you require, and migrate them into the Selected box.
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Click Apply when finished.
How You Can Set the State Resident Wage Accumulation Rule
You can select which resident wage accumulation rule the payroll process uses when calculating SIT.
What you want to do |
How you do it |
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Set the rule on a payroll statutory unit (PSU) |
|
Set the rule on a tax reporting unit (TRU) |
This overrides any values on the parent PSU card. |
Set the rule for an individual employee |
This overrides any values on the PSU or TRU cards. |
When using the Only states under state tax rules withholding rule for federal income tax (FIT), select the appropriate Resident Wage Accumulation rule for each state.
If you're using this FIT withholding rule |
It does this |
And you can select this for Resident Wage Accumulation |
---|---|---|
All states |
Default withholding rule for all states. |
The payroll process automatically withholds for all states using the default action for each state. This is described in the Calculation Guide for the United States Vertex Payroll Tax Q Series. |
Only states under state tax rules |
From the states you have configured on the card, this identifies which you're withholding resident taxes. For each state you add, you select the appropriate resident wage accumulation rule. Note:
If you select an invalid rule, the card uses the default rule. |
Select one.
For further info, see Calculation Guide for the United States Vertex Payroll Tax Q Series. |
For further info, see Oracle Cloud Human Capital Management for United States: Courtesy Tax Implementation (2138998.1) on My Oracle Support.