What is threshold-based withholding?
With this calculation method, tax calculations don't begin until the employee's year-to-date wages reach a $200k threshold. No tax is withheld until this threshold is reached.
To enable it, use the Calculation Value Definitions task to update Threshold-based withholding for your legislative data group (LDG).
Add a row to Calculation Values with these values.
|
For this column |
Enter this value |
|---|---|
|
From Value |
Leave the default |
|
To Value |
Leave the default |
|
Calculation Type Override |
Leave the default |
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Text |
Y |
If you change the withholding method after taxes have already been withheld during the calendar year, the payroll process doesn't retroactively adjust prior withholdings when the employee exceeds the threshold. In such cases, you need to perform a balance adjustment.