1. US Payroll Implementation Guide
  2. Monitoring Form W-4 Information for Employees Subject to IRS Lock-In Letter (Release 9.2 Update)

Monitoring Form W-4 Information for Employees Subject to IRS Lock-In Letter (Release 9.2 Update)

When you receive a lock-in letter from the IRS for an employee, you are obligated to follow the IRS letter and ignore any W-4 information requested by the employee if it would result in lower federal tax withholding. The lock-in letter will generally instruct you to withhold taxes at a maximum rate on future paychecks. The maximum rate may be achieved if the employee sets their federal filing status to “Single" (S) and their number of exemptions to 0.

To monitor the IRS form W-4 information, you can use the JDE_ORCH_07_Process_All_Lock_List_Employees orchestration that is run on a schedule. The orchestration evaluates the filing status and number of exemptions for employees who have been identified as having received a lock-in letter. If an employee's filing status is any value other than “S" or the number of exemptions is greater than 0, the system sends an email to a manager in the Human Resources department. For more information about the JDE_ORCH_07_Process_All_Lock_List_Employees orchestration, see U.S. Payroll Orchestrations.

To use the JDE_ORCH_07_Process_All_Lock_List_Employees orchestration for monitoring W-4 information, you must complete the following steps:

  1. Add a value (for example, LL) to the Supplemental Database Code UDC table (00/SD).

  2. Set up a supplemental data type for lock-in letters in the Supplemental Data Setup program (P00091). See Creating Supplemental Data Type for Lock-In Letters.

  3. Associate the supplemental data type for lock-in letters with the employees who are subject to lock-in letters. See Associating Lock-In Letter Supplemental Data Type With Employee Record.

Note: If you already have a supplemental data type LL that you are using for another purpose, you can add a different code for lock-in letters to the 00/SD UDC table. Alternatively, you can use a different method, such as a category code, to identify the employees. Make the corresponding change to the orchestration so that it will recognize how you are identifying employees who are subject to lock-in letters.