Setup Approach

Let's consider the example of Brittany and see how we can set up the wage basis rules for her.

Brittany works in her company's East Coast district, and she spends 50 percent of her time in New York and 50 percent of her time in Pennsylvania.

She uses the company car, the use of which she has to report in order to be taxed properly. Consider the following to set up wage basis rules for Brittany.

• She receives a monthly salary of 2,000.

• Last month, Brittany reported a total personal use of the car amount of 100. She spent 50 percent of it in New York and 50 percent of it in Pennsylvania.
• In New York, imputed earnings such as personal use of company car amounts are included in the taxable wages.

• In Pennsylvania, Brittany isn't taxed for her personal use of the company car.

  Use these tasks to create the wage basis rules for Brittany:

  1. Use the Element Classifications quick action under Payroll and check if the secondary classification of Personal Use of Company Car is available under the primary classification of Imputed Earnings for an US LDG.
  2. Use the Elements quick action and create an element for Company Car for the US LDG. When you create the element, under the Standard Rules section, select the element as Nonrecurring and the Employee Level as Assignment Level.
  3. Use the Component Group Rules quick action under Payroll and navigate to Regional > Related Deductions > State Tax, to create the wage basis rules. Create a wage basis rule for the secondary classification of Personal Use of Company Car and the state of NY. Ensure that for Pennsylvania’s Primary Classification of Imputed Earnings the Use in Wage Basis value is set to N.