Understanding Tax Processing

This chapter discusses:

Delivered tax elements.
Federal tax calculation.
State tax calculation.
Tax and payment method overrides.
Tax reports.

Delivered Tax Elements

This section discusses:

Delivered federal tax elements.
Delivered state income tax elements.

Delivered Federal Tax Elements

This section discusses:

Delivered federal tax arrays.
Delivered federal tax brackets.
Delivered federal tax supporting elements.
Delivered federal tax variables.
Delivered federal tax formulas.
Delivered federal tax deductions.
Delivered federal tax accumulators.
Delivered federal tax sections.
Delivered federal tax element groups.

Delivered Federal Tax Arrays

This table lists the federal tax-related arrays delivered with Global Payroll for United States:

Array	Description
TAX AR EE FED DATA	Retrieves employee tax data (Forms W-4 and W-5).
TAX AR EE FED OTH	Retrieves federal employee tax information from the payee tax profile.
TAX AR ER COM DATA	Retrieves employer tax data from the COMPANY table.
TAX AR ER FED DATA	Retrieves employer federal tax data from the Company Federal Tax Data table.
TAX WA EE FED DATA	Writable array that stores federal employee tax information.
TAX AR REPORTING COMPANY	Retrieves the EIN information from the Year End Tax Reporting Company table.

Delivered Federal Tax Brackets

This table lists the federal tax-related brackets delivered with Global Payroll for United States:

Bracket	Description
TAX BR FWT RATES	Provides federal withholding tax (FWT) rates based on taxable income and marital status.
TAX BR EIC RATES	Provides earned income credit (EIC) rates based on taxable income and EIC status.

Delivered Federal Tax Supporting Elements

This table lists the federal tax-related supporting elements delivered with Global Payroll for United States:

Supporting Element	Description
TAX DT PRD DATE	From the period begin date, extracts three distinct numbers for year, month, and day.
TAX DT ST YEAR	Calculates the first day of the year.
TAX DR YR DAYS	A duration representing the number of days from the first day of the year.
TAX RR 1/100 CENT	Rounding rule that causes the system to disregard any fractional part of a cent of collected tax unless it amounts to one-half cent or more, in which case it increases it to 1 cent.
TAX DT EN YEAR	Calculates the end-of-year date.
TAX DT HIR DATE	Calculates the hire date.
TAX DR HIRE DAYS	Calculates the days from hire.
TAX DR YEAR DAYS	Calculates days from start of year.

Delivered Federal Tax Variables

This table lists the federal tax-related variables delivered with Global Payroll for United States:

Variable	Description
TAX VR AD AMT FWT	Additional amount to withhold.
TAX VR AD PCT FWT	Additional percent to withhold.
TAX VR BALANCES	Balances initialized.
TAX VR EIC BRK GRS	EIC bracket gross.
TAX VR FWT S	FWT supplemental.
TAX VR FWT SAV	Saved value for FWT calculation.
TAX VR FWT STATUS	Federal tax status.
TAX VR HIR DY	Hire day.
TAX VR HIR MO	Hire month.
TAX VR HIR YR	Hire year.
TAX VR MAR SAV	Marital status saved.
TAX VR REP COMPANY	Reporting company.
TAX VR RPT TYPE	Report type.
TAX VR RSLT AMT	Tax amount.
TAX VR RSLT GRS	Tax gross.
TAX VR RSLT NL GRS	Non limited tax gross.
TAX VR RSLT PIN	Tax element number.
TAX VR RSLT RATE	Tax rate.
TAX VR CRD PCT	Tax rate credit.
TAX VR EIN	Federal employer identification number (EIN).
TAX VR CPAY MST ID	Common Paymaster Tax ID
TAX VR METHOD	Tax method (A = Annualized, C = Cumulative, S = Supplemental).
TAX VR PMT	Payment option (R = Supplemental wages paid with regular wages, S = Separate payment).
TAX VR EXP FUT	Exempt from federal unemployment tax (FUTA) indicator (Y/N).
TAX VR MAR STAT	Payee marital status used for tax calculation (S = Single, M = Married, W = Married but withhold at higher single rate) as indicated on the W-4 form.
TAX VR NB ALLOW	Number of allowances as indicated on the W-4 form.
TAX VR EIC STATUS	EIC status (N = Not applicable, S = Single, M = Married, B = Both spouses filling) as indicated on the W-5 form.
TAX VR FICA EE	Federal Insurance Contributions Act (FICA) status for employee (N = Subject, E = Exempt, M = Medicare only).
TAX VR FICA ER	FICA status for employer (N = Subject, E = Exempt, M = Medicare only).
TAX VR TIP EE	Tipped status (N = Not tipped, D = Directly, I = Indirectly).
TAX VR GRS	Gross given by payroll.
TAX VR GRS A	Annualized gross given by payroll.
TAX VR GRS C	Cumulative gross given by payroll.
TAX VR GRS S	Supplemental gross given by payroll.
TAX VR GRS TOT	Non limited gross given by payroll.
TAX VR FWT PRE TAX	Pre-tax deductions.
TAX VR BASE GRS	Base gross given by payroll.
TAX VR FWT MAR	Payee marital status for the purpose of federal tax calculation.
TAX VR FREQ TYPE	Frequency type.
TAX VR FREQ FACT	Calculated frequency factor based on pay period.
TAX VR AN GRS	Calculated annualized gross.
TAX VR AN EXE	Calculated annualized exemption.
TAX VR BRK GRS	Bracket gross from tax brackets.
TAX VR LOW GRS	Low gross amount from tax brackets.
TAX VR RATE	Tax rate from tax brackets.
TAX VR LOW TAX	Low tax from tax brackets.
TAX VR LOW CREDIT	Low credit from tax brackets.
TAX VR AN FWT TOT	Calculated total annualized tax amount.
TAX VR PRD FACT	Tax period.
TAX VR FWT	Calculated FWT.
TAX VR FWT A	Calculated annualized FWT.
TAX VR FWT C	Calculated cumulative FWT.
TAX VR AMT	Calculated tax amount.
TAX VR PRD YR	Period year.
TAX VR PRD MO	Period month.
TAX VR PRD DY	Period day.
TAX VR FED EX ALL	Federal exemptions allowances.
TAX VR FED SUP R	Federal supplemental wage rate.
TAX VR OAS EE LIM	Old age, survivors, and disability insurance (OASDI) employee gross limit.
TAX VR OAS EE RATE	OASDI employee tax rate.
TAX VR OAS EE PY L	OASDI employee payment limit.
TAX VR OAS ER LIM	OASDI employer gross limit.
TAX VR OAS ER RATE	OASDI employer tax rate.
TAX VR OAS ER PY L	OASDI employer payment limit.
TAX VR MED EE RATE	Medicare employee tax rate.
TAX VR MED ER RATE	Medicare employer tax rate.
TAX VR FUT GRS LIM	FUTA gross limit.
TAX VR FUT RATE	FUTA tax rate.
TAX VR EIC GRS LIM	EIC gross limit for single certificate.
TAX VR EIC PYS LIM	EIC payment limit for single certificate.
TAX VR EIC GRJ LIM	EIC gross limit for joint certificate.
TAX VR EIC PYJ LIM	EIC payment limit for joint certificate.

Delivered Federal Tax Formulas

This table lists the federal tax-related formulas delivered with Global Payroll for United States:

Formula	Description
TAX FM EIC POST	Post-process EIC.
TAX FM EIC PRE	Pre-process EIC. This formula manages exemption statuses and the gross accumulators.
TAX FM FUT POST	Post-process FUTA.
TAX FM FWT POST	Post-process FWT.
TAX FM FWT PRE	Pre-process FWT. This formula manages exemption statuses and the gross accumulators.
TAX FM FWT S/AGGR	Supplemental FWT aggregate.
TAX FM FWT S/PCT	Supplemental FWT percent.
TAX FM INIT EVENT	Tax initialization event list.
TAX FM MED EE POST	Post-process medicare employee.
TAX FM MED ER POST	Post-process medicare employer.
TAX FM OAS EE POST	Post-process OASDI employee.
TAX FM OAS ER POST	Post-process OASDI employer.
TAX FM FED POST	Federal post-process formula.
TAX FM INIT	Tax initialization. Runs before all earnings resolution to set the values required before any calculation: frequency factor, common paymaster ID, marital status, and technical initialization for OASDI, Medicare and FUTA balances.
TAX FM FWT	Calculates the total FWT based on regular, cumulative, and supplemental wages.
TAX FM FWT AN	Calculates withholding tax based on an annual gross and the tax brackets.
TAX FM FWT A	Calculates withholding tax using the annualized method.
TAX FM FWT C	Calculates withholding tax using the cumulative method.
TAX FM FWT SP	Calculates withholding tax using the supplemental method when supplemental wages are combined with regular wages.
TAX FM FWT SA	Calculates withholding tax using the supplemental method when supplemental wages are paid separately from regular wages.
TAX FM OAS EE	Calculates OASDI employee tax.
TAX FM OAS ER	Calculates OASDI employer tax.
TAX FM MED EE	Calculates Medicare employee tax.
TAX FM MED ER	Calculate Medicare employer tax.
TAX FM FUT	Calculates the FUTA employer tax.
TAX FM EIC	Calculates the Advanced EIC based on the EIC marital status and the tax brackets.
TAX FM PERIOD	Sets the period number.
TAX FM EE FED DATA	Look-up formula that retrieves employee tax data from forms W-4 and W-5.

Delivered Federal Tax Deductions

This table lists the federal tax-related deductions delivered with Global Payroll for United States:

Deduction	Description
FWT	Federal withholding tax.
OASDI EE	OASDI employee tax.
OASDI ER	OASDI employer tax.
MEDICARE EE	Medicare employee tax.
MEDICARE ER	Medicare employer tax.
FUTA	FUTA tax.
EIC	Advanced EIC. This is a negative deduction.

Note. All of the tax deductions use post-process formulas to manage manual payments (the taxable gross must be calculated based on the tax amount entered manually) and to trigger writable arrays containing tax amounts and grosses.

Delivered Federal Tax Accumulators

This table lists the federal tax-related accumulators delivered with Global Payroll for United States:

Accumulator	Description
FWT ARR	FIT withholding.
FWT PTDA	FIT withholding.
FWT YTDA	FIT withholding.
FWT GRS N	Taxable gross (subject to FWT) - Customer Maintained.
FWT GRS	Taxable gross for FWT.
FWT GRS PTD	Period-to-date taxable gross for FWT.
FWT GRS TOT	Taxable gross total for FWT.
FWT GRS TOT YTD	Year-to-date taxable gross Total for FWT.
FWT PRE TAX N	Before tax deductions - Customer Maintained.
FWT PRE TAX	Before tax deductions.
FWT PRE TAX PTD	Period-to-date before tax deductions.
OAS EE AMT CUR	OASDI employee amount.
OAS EE AMT PREV	OASDI employee amount.
OAS EE AMT TOT	OASDI employee amount.
OAS EE AMT YTD	Year to date OASDI amount for employee (used in year-end reports).
OAS EE GRS CUR	OASDI employee gross.
OAS EE GRS LIM	OASDI employee taxable gross.
OAS EE GRS PREV	OASDI employee gross.
OAS EE GRS TOT	OASDI employee gross.
OAS EAR AMT CUR	OASDI employer amount.
OAS ER AMT PREV	OASDI employer amount.
OAS ER AMT TOT	OASDI employer amount.
OAS ER GRS CUR	OASDI employer gross.
OAS ER GRS LIM	OASDI employer taxable gross
OAS ER GRS PREV	OASDI employer gross
OAS ER GRS TOT	OASDI employer gross
OASDI EE ARR	OASDI employee tax.
OASDI EE YTDA	OASDI employee tax.
OASDI ER ARR	OASDI employer tax.
OASDI ER YTDA	OASDI employer tax.
OAS EE GRS N	OASDI employee gross - Customer Maintained.
OAS EE GRS	OASDI employee gross.
OAS EE GRS YTD	Year-to-date OASDI employee gross.
OAS EE GRS LIM YTD	Year-to-date OASDI employee gross limited.
OAS ER GRS N	OASDI employer gross - Customer Maintained.
OAS ER GRS	OASDI employer gross.
OAS ER GRS YTD	Year-to-date OASDI employer gross.
OAS ER GRS LIM YTD	Year-to-date OASDI employer gross limited.
MED EE AMT CUR	Medicare employee amount.
MED EE AMT PREV	Medicare employee amount.
MED EE AMT TOT	Medicare employee amount.
MED EE AMT YTD	Medicare employee YTD.
MED EE AMT YTD	Year to date Medicare amount for employee (used in year-end reports).
MED EE GRS CUR	Medicare employee gross.
MED EE GRS LIM	Medicare employee taxable gross.
MED EE GRS LIM YTD	Medicare employee YTD taxable gross.
MED EE GRS PREV	Medicare employee gross.
MED EE GRS TOT	Medicare employee gross.
MED ER AMT CUR	Medicare employer amount.
MED ER AMT PREV	Medicare employer amount.
MED ER AMT TOT	Medicare employer amount.
MED ER GRS CUR	Medicare employer gross.
MED ER GRS LIM	Medicare employer taxable gross.
MED ER GRS LIM YTD	Medicare employer YTD taxable gross.
MED ER GRS PREV	Medicare employer gross.
MED ER GRS TOT	Medicare employer gross.
MEDICAL EE ARR	Medical.
MEDICAL EE MTDA	Medical.
MEDICAL EE PTDA	Medical.
MEDICAL EE QTDA	Medical.
MEDICAL EE YTDA	Medical.
MEDICAL ER ARR	Medical employer paid.
MEDICAL ER MTDA	Medical employer paid.
MEDICAL ER PTDA	Medical employer paid.
MEDICAL ER QTDA	Medical employer paid.
MEDICAL ER YTDA	Medical employer paid.
MEDICARE EE ARR	Medicare employee tax.
MEDICARE EE YTDA	Medicare employee tax.
MEDICARE ER ARR	Medicare employer tax.
MEDICARE ER YTDA	Medicare employer tax.
MED EE GRS N	Medicare employee gross - Customer Maintained.
MED EE GRS	Medicare employee gross.
MED EE GRS YTD	Year-to-date Medicare employee gross.
MED ER GRS N	Medicare employer gross - Customer Maintained.
MED ER GRS	Medicare employer gross.
MED ER GRS YTD	Year-to-date medicare employer gross.
FUT AMT CUR	FUTA amount.
FUT AMT PREV	FUTA amount.
FUT AMT TOT	FUTA amount.
FUT GRS CUR	FUTA gross.
FUT GRS LIM	FUTA taxable gross.
FUT GRS PREV	FUTA gross.
FUT GRS TOT	FUAT gross.
FUTA ARR	Federal unemployment tax.
FUTA TYDA	Federal unemployment tax.
FUT GRS N	FUTA gross - customer maintained.
FUT GRS	FUTA gross.
FUT GRS YTD	Year-to-date FUTA gross.
FUT GRS LIM YTD	Year-to-date FUTA gross limited.
EIC GRS N	EIC gross - customer maintained.
EIC GRS	EIC gross.
EIC GRS YTD	Year-to-date EIC gross.
EIC GRS LIM YTD	Year-to-date EIC gross limited.
EIC GRS LIM	EIC taxable gross.
EIC ARR	Earned income credit.
EIC YTDA	Earned income credit.

Delivered Federal Tax Sections

This table lists the federal tax-related sections delivered with Global Payroll for United States:

Section	Description
TAX INITIALIZATION	Tax initialization.
FEDERAL TAX EE	Federal tax calculation for employees.
FEDERAL TAX ER	Federal tax calculation for employers.

Delivered Federal Tax Element Groups

Global Payroll for United States delivers the following federal tax-related element groups: TAX EG FED EE.

Element Group	Description
TAX EG FED EE	Federal tax deductions.
TAX EG FED ER	Federal tax deductions employer.
TAX EG W-2	W-2 YTD accumulators.
TAX EG W-2AS	W-2AS YTD accumulators.
TAX EG W-2GU	W-2GU YTD accumulators.
TAX EG W-2PR	W-2PR YTD accumulators.
TAX EG W-2VI	W-2VI YTD accumulators.
TAX EG YE IND	Year-end indicators.
TAX EG YE VAR	Year-end variables.

Delivered State Income Tax Elements

This section discusses:

Delivered state income tax arrays.
Delivered state income tax brackets.
Delivered state income tax variables.
Delivered state income tax formulas.
Delivered state income tax deductions.
Delivered state income tax accumulators.
Delivered state income tax sections.
Delivered state income tax element groups.

Delivered State Income Tax Arrays

This table lists the state income tax-related arrays delivered with Global Payroll for United States:

Array	Description
TAX AR ER ST DATA	Retrieves employer tax data (Company/State Table).
TAX AR SWT TBL	Retrieves state calculation method and other special tax information from the State Tax table.
TAX AR SWT WAG BRK	State tax rates.
TAX AR SWT STD DED	State tax standard deductions.
TAX AR SWT ALLOW	State tax allowances.
TAX AR SWT PERSCR	State tax personal credit.
TAX AR SWT EXCL	State pre-tax deductions exclusions.
TAX AR EE WRK ST	Work state.

Delivered State Income Tax Brackets

This table lists the state income tax-related brackets delivered with Global Payroll for United States:

Bracket	Description
TAX BR ANN MTHD	Returns the formula for calculating taxes using the annualized tax method.
TAX BR REG MTHD	Returns the formula for calculating taxes for supplemental income paid with regular wages or paid separately.

Delivered State Income Tax Variables

This table lists the state income tax-related variables delivered with Global Payroll for United States:

Variable	Description
TAX VR AD AMT SWT	Additional amount to withhold.
TAX VR AD PCT SWT	Additional percent to withhold.
TAX VR SWT EIN	State income tax EIN (Employer Identification Number) from the Company State Tax table.
TAX VR STATE	U.S. state or territory.
TAX VR GRS S SPC	Gross given by payroll.
TAX VR GRS S TOT	Gross given by payroll.
TAX VR FORM REG	Formula for regular wages.
TAX VR FORM SEP	Formula for separate payment.
TAX VR SWT	Calculated SWT.
TAX VR SWT A	Calculated SWT annualized.
TAX VR SWT C	Calculated SWT cumulative.
TAX VR SWT S	Calculated SWT supplemental.
TAX VR SWT MAR	Payee's marital status used for state tax calculation.
TAX VR SWT PRE TAX	Pre-tax deductions for SWT.
TAX VR AD ALLOW	Additional allowances (payee level).
TAX VR NBR DEPEND	Number of dependents.
TAX VR FWT CR LIM	State tax FWT credit limit.
TAX VR SWT STD DED	State tax standard deductions.
TAX VR PCT OF FWT	State tax percent of FWT.
TAX VR AN FICA	Calculated annualized FICA.
TAX VR FICA CR LIM	State tax FICA credit limit.
TAX VR SWT ALLOW	State tax exemption allowances.
TAX VR SWT ALL 2D	State tax exemption, more than two allowances.
TAX VR SWT ALL ADD	State tax additional allowances.
TAX VR SWT PERSCR	State tax personal credit.
TAX VR SWT GRS LIM	State taxable gross limit.
TAX VR SWT DED MIN	State tax standard deductions minimum.
TAX VR SWT EX AMT	State tax annual exemption amount.
TAX VR SWT SPC EX	State tax special annual exemption amount.
TAX VR SWT DED 2D	State tax standard deductions for two dependents or more.
TAX VR SWT ALL LIM	State tax exemption allowances limit (high income allowance).
TAX VR SWT ROUND	State tax rounding rule (nearest dollar).
TAX VR SWT EX LIM	State tax gross limit (threshold).
TAX VR SWT EX BPCT	State tax exemption percentage below.
TAX VR SWT EX APCT	State tax exemption percentage above.
TAX VR SWT WK AMT	State tax work amount.
TAX VR SWT WK DED	State tax work deduction.
TAX VR SWT WK EX	State tax work exemption amount.
TAX VR SWT MLTPY	State tax special multiplier.
TAX VR AN SWT TOT	Calculated total annualized tax amount.
TAX VR PCT SUP SPC	State tax percentage on special supplemental wages (bonuses and stock-options).
TAX VR PCT SUP	State tax percentage on supplemental wages.
TAX VR JURISDICT	UI jurisdiction.
TAX VR STATE EIC	State EIC.
TAX VR ANN MTHD	Annualized method.
TAX VR REG MTHD	Supplemental, paid with regular wages method.
TAX VR SEP MTHD	Supplemental, paid separately method.
TAX VR PRE STATUS	Previous status.
TAX VR SWT MAX FWT	Maximum FWT exemption.
TAX VR CATEGORY	Tax category.
TAX VR DED NUM	Before tax deduction pointer.
TAX VR BRK TYP	Bracket type.
TAX VR SWT ALL 2D	Allowance, two dependents.
TAX VR SWT ADD ADJ	Additional amount adjustment.
TAX VR SWT DED MAX	Standard deduction maximum.
TAX VR SWT DED PC1	Standard deduction percent 1.
TAX VR SWT DED PC	Standard deduction percent.
TAX VR SWT DEP CR	State tax dependent credit.
TAX VR SWT GRS LI2	State taxable gross limit 2.
TAX VR SWT SAV	Saved value for SWT calculation.
TAX VR SWT STATUS	State tax status.
TAX VR EFFDT	Tax rates effective date.

Delivered State Income Tax Formulas

This table lists the state income tax-related formulas delivered with Global Payroll for United States:

Formula	Description
TAX FM ST POST	State post-process formula.
TAX FM STATE EIC P	Post-process state EIC.
TAX FM SWT A/P FWT	SWT — Ann/Percent of FWT.
TAX FM SWT POST	Post-process SWT.
TAX FM SWT PRE	Pre-process SWT. This formula manages exemption statuses and the gross accumulators. In addition, it retrieves payee tax data information such as marital status and allowances.
TAX FM SWT S/+PCTS	SWT — Multiple rates.
TAX FM SWT S/P FWT	STW — Sup/Percent of FWT.
TAX FM SWT S/PCT	SWT — Percent of tax gross.
TAX FM SWT	Calculates SWT based on regular and supplemental wages.
TAX FM SWT AN	Calculates SWT based on an annual gross and the tax brackets.
TAX FM SWT A	Calculates SWT using the annualized method.
TAX FM SWT C	Calculates SWT using the cumulative method.
TAX FM SWT A/BRK	Calculates SWT on Regular Wages - States using state tax rates.
TAX FM SWT A/FWT	Calculates SWT on Regular Wages - States using an FWT wage bracket.
TAX FM SWT A/F-CR	Calculates SWT on Regular Wages - States using an FWT credit in the tax calculation.
TAX FM SWT A/F/ALL	Calculates SWT on Regular Wages - States using an FWT credit in the tax calculation and a specific allowance calculation.
TAX FM SWT A/F-CR2	Calculates SWT on Regular Wages - States using an FWT credit in the tax calculation (2nd method).
TAX FM SWT A/PFWT	Calculates SWT on Regular Wages - States using a percent of FWT only in the tax calculation.
TAX FM SWT A/FICA	Calculates SWT on Regular Wages - States using a FICA Credit in the tax calculation.
TAX FM SWT A/SPC*	Calculates SWT on Regular Wages - States using a special multiplier in the tax calculation.
TAX FM SWT A/SPC*E	Calculates SWT on Regular Wages - States using a special exemption table in the tax calculation.
TAX FM SWT A/STDED	Calculates SWT on Regular Wages - States using a standard deduction threshold in the tax calculation.
TAX FM SWT A/EX-CR	Calculates SWT on Regular Wages - States using a special formula to calculate the “Exempt/Personal Credit” amount.
TAX FM SWT A/ANEX	Calculates SWT on Regular Wages - States using an annual exemption amount in the tax calculation.
TAX FM SWT A/+ALW	Calculates SWT on Regular Wages - States using an additional allowance number.
TAX FM SWT S/AGGR	Calculates SWT on Supplemental Wages - Aggregate.
TAX FM SWT S/%GRS	Calculates SWT on Supplemental Wages - Percent of taxable gross.
TAX FM SWT S/%FWT	Calculates SWT on Supplemental Wages - States using a percent of FWT only in the tax calculation.
TAX FM SWT S/+PCTS	Calculates SWT on Supplemental Wages - Multiple Rates.
TAX FM SWT S/NO-AN	Calculates SWT on Supplemental Wages - Aggregate - No Annualize.
TAX FM SWT S/T/PCT	Calculates SWT on Supplemental Wages - Aggregate - No Tax else percent.
TAX FM SWT S/SPC	Calculates SWT on Supplemental Wages - Special Table.
TAX FM STATE EIC	Calculates the state advanced EIC.
TAX FM EE ST DATA	Look-up formula that retrieves employee tax data (Forms W-4 and W-5).
TAX FM SWT DED	Look-up formula that retrieves standard deduction rates.
TAX FM SWT ALL	Look-up formula that retrieves allowance rates.
TAX FM SWT CRD	Look-up formula that retrieves credit rates.
TAX FM SWT EXCL	Look-up formula that retrieves the elements excluded from the taxable gross calculation.

Delivered State Income Tax Deductions

This table lists the state income tax-related deductions delivered with Global Payroll for United States:

Deduction	Description
SWT	State withholding tax (SWT)
STATE EIC	State EIC

Delivered State Income Tax Accumulators

This table lists the state income tax-related accumulators delivered with Global Payroll for United States:

Accumulator	Description
SWT GRS N	Taxable gross subject to SWT - Customer Maintained.
SWT GRS	Taxable gross subject to SWT.
SWT GRS PTD	Period-to-date taxable gross subject to SWT.
SWT GRS SPC N	Taxable gross supplemental special earnings (bonus and stock options) subject to SWT - Customer Maintained.
SWT GRS SPC	Taxable gross supplemental special earnings (bonus and stock options) subject to SWT.
SWT GRS SPC PTD	Period-to-date taxable gross supplemental special earnings (bonus and stock options) subject to SWT.
SWT GRS TOT	Taxable gross total for SWT.
SWT GRS TOT YTD	Year-to-date taxable gross total for SWT.
SWT PRE TAX N	Before tax deductions - Customer Maintained.
SWT PRE TAX	Before tax deductions.
SWT PRE TAX PTD	Year-to-date before tax deductions.
SWT GRS DRIVER	SWT driver accumulator.
SWT GRS S	SWT gross.
SWT GRS SPC S	SWT special gross.
SWT PRE TAX EXC	SWT before tax exclusions.
SWT PRE TAX S	SWT before tax.
SWT ARR	State income tax.
SWT PTDA	State income tax.
SWT YTDA	State income tax.

Delivered State Income Tax Sections

This table lists the state income tax-related sections delivered with Global Payroll for United States:

Section	Description
TAX INITIALIZATION	Tax initialization.
STATE TAX EE	State tax calculation for employees.

Delivered State Income Tax Element Groups

There is one state income tax-related element group delivered with Global Payroll for United States: TAX EG STATE EE.

Federal Tax Calculation

This section discusses how to:

Calculate federal tax.
Calculate FWT.
Calculate OASDI.
Calculate Medicare tax.
Calculate FUTA.
Calculate the EIC.

Calculating Federal Tax

This diagram illustrates the flow of federal tax calculation:

Federal tax calculation

This diagram presents an overall view of the calculation of federal income tax. It shows how the system uses employee data, company data, earnings, deductions, and supporting elements to calculate the various federal taxes and credits for payees and employers. The system then uses the taxes and credits calculated for payees to calculate net pay.

Calculating FWT

This diagram illustrates the flow of FWT calculation:

FWT calculation

The system calculates FWT as a deduction (FWT) using the formula TAX FM FWT. The system includes this deduction in net pay calculation.

The calculation has three phases, based on tax method:

Annualized
Cumulative
Supplemental (aggregate/percent)

The calculations are based on the bracket TAX BR FWT RATES that contains the tax rates and set of variables that store key values such as exemption allowances and supplemental wage rate.

Note. The default tax method is annualized. You can override the method that the system uses to calculate FWT.

See Overriding Tax and Payment Methods.

Calculating OASDI

This diagram illustrates the flow of the OASDI calculation:

OASDI tax calculation

The system calculates OASDI employee tax as a deduction (OASDI EE) using the formula TAX FM OAS EE. The system includes this deduction in the net pay calculation. The calculations are based on a set of variables that store key values such as gross limits, tax rates, and payment limits for OASDI. Year-to-date OASDI tax for a payee is stored in the OASDI EE YTDA accumulator. The system then refers to this accumulator to enforce the yearly OASDI limit during calculation.

The system calculates OASDI employer tax as a deduction (OASDI ER) using the formula TAX FM OAS ER. Because this deduction applies only to employers, the system does not include it in net pay calculation. The system stores year-to-date OASDI employer tax in an accumulator (OASDI ER YTDA), just as it does for year-to-date OASDI employee tax. Likewise, the system uses the accumulator to enforce yearly limits on OASDI employer tax.

Calculating Medicare Tax

This diagram illustrates the flow of Medicare tax calculation:

Medicare tax calculation

The system calculates Medicare employee tax as a deduction (MEDICARE EE) using the formula TAX FM MED EE. The system includes this deduction in net pay calculation. The calculations are based on a variable that stores the tax rate for Medicare.

The system calculates Medicare employer tax as a deduction (MEDICARE ER) using the formula TAX FM MED ER. Because this deduction applies only to employers, the system does not include it in net pay calculation.

Calculating FUTA

This diagram illustrates the flow of FUTA calculation:

FUTA calculation

The system calculates FUTA as a deduction (FUTA) using the formula TAX FM FUT. The system includes this deduction in net pay calculation. The calculations are based on a variable that stores the tax rate for FUTA.

Year-to-date FUTA for a payee is stored in the FUTA_YTDA accumulator. The system then refers to this accumulator to enforce the yearly FUTA limit during calculation.

Calculating the EIC

This diagram illustrates the flow of EIC calculation:

EIC calculation

The system calculates EIC as a negative deduction (EIC) using the formula TAX FM EIC. The system includes this deduction in net pay calculation. The calculations are based on a bracket (TAX BR EIC RATES) that contains the payment rates and a set of variables that store key values such as gross limit and payment limit for a single certificate or for joint certificates. Year-to-date EIC for a payee is stored in the EIC_YTD accumulator. The system then refers to this accumulator to enforce the yearly EIC limit during calculation.

State Tax Calculation

This section discusses how to:

Calculate state income tax.
Calculate SWT.
Calculate the state EIC.

Calculating State Income Tax

This diagram illustrates the flow of state income tax calculation:

State income tax calculation

This diagram presents an overall view of the calculation of state income tax. It shows how the system uses employee data, company data, earnings, deductions, and supporting elements to calculate SWT and state EIC for payees. The system then uses the taxes and credits to calculate net pay.

Calculating SWT

This diagram illustrates the flow of SWT calculation:

SWT calculation

The system calculates SWT as a deduction (SWT) using the formula TAX FM SWT. The system includes this deduction in net pay calculation. Because it is possible for a payee to earn income from multiple states during the year, the system uses an accumulator driver (SWT GRS TOT) to generate multiple resolutions of the deduction. For every state that applies to a payee, SWT GRS TOT drives a separate resolution of the SWT deduction. The calculation has three phases, based on the tax method and payment method for supplemental wages:

Annualized
Cumulative
Supplemental (paid with regular wages or in a separate payment)

The calculations are based on the State Tax table that determines which formula to apply for each state.

This table returns:

The formula to apply for regular wages.
The formula to apply for supplemental income paid with regular wages.
The formula to apply for supplemental income paid separately.
The rounding rule to apply.

Note. You can override the tax method and payment method that the system uses to calculate SWT.

See Overriding Tax and Payment Methods.

Calculating the State EIC

This diagram illustrates the flow of state EIC calculation:

State EIC Calculation

The system calculates state EIC as a negative deduction (STATE EIC) using the formula TAX FM STATE EIC. The system includes this deduction in net pay calculation. This deduction is driven by the accumulator SWT GRS TOT.

Overriding Tax and Payment Methods

Global Payroll for United States supports three tax calculation methods: annualized, cumulative, and supplemental. For taxes calculated using the supplemental method, the two supported payment methods that affect tax calculation are Paid with Regular Wages and Separate Payment. The tax calculation method and payment method are controlled by the variables TAX VR METHOD and TAX VR PMT, respectively. All of the earnings and deductions delivered with Global Payroll for United States are associated with a default tax method and payment method. To make one-time or recurring changes to these values, you must use supporting element overrides (SOVRs).

Overriding Tax Methods

The variable TAX VR METHOD, which controls the tax calculation method used by the system for each earning and deduction, has three possible values: A (annualized), C (cumulative), and S (supplemental). Most of the earnings delivered with Global Payroll for United States have a default tax method of A. There are exceptions, such as the BONUS earning, which has a tax method of S. You can change the tax method for an earning at the payee level on the Element Detail page of the Element Assignment By Payee component (GP_ED_PYE) for a recurring modification, and on the positive input component (GP_PI_MNL_ERNDED) for a one-time modification.

See Also

Defining Payee Overrides

Entering Positive Input

Overriding Payment Methods

The variable TAX VR PMT, which controls the payment method that the system uses when calculating taxes on supplemental income, has two possible values: R (Paid with Regular Wages) and S (Separate Payment). This variable has a default value of R for all supplemental tax calculations, but you can override the payment method at the calendar level. You must create a separate calendar with a unique run type using the Calendars component (GP_CALENDAR).

Overriding State Codes and Tax Report Types

The variables TAX VR STATE (U.S. state and territory code) and TAX VR RPT TYPE (report type) control how the system processes and reports tax data at the state level. You can override the state and territory code and report type for a payee on the Element Detail page of the Element Assignment By Payee component (GP_ED_PYE) for a recurring modification, and on the positive input component (GP_PI_MNL_ERNDED) for a one-time modification.

Tax Reports

This section lists the tax reports provided in Global Payroll for United States and discusses how to:

Run the Tax Deposit and Liability report.
Run the W-4 IRS report.

Pages Used to Run Tax Reports

Page Name	Object Name	Navigation	Usage
Tax Deposit and Liability USA	GPUS_RC_TAXDEPLIAB	Global Payroll & Absence Mgmt, Taxes, Tax Deposit and Liability USA	Generates pay period details on federal and state taxes withheld from employees.
Tax Summary Reports USA	GPUS_RC_TAXSUMRPT	Global Payroll & Absence Mgmt, Taxes, Tax Summary Reports USA	Summarizes period-to-date income tax, other federal taxes, and state taxes.
Quarterly Tax Reports USA	GPUS_RC_QTRTAXRPT	Global Payroll & Absence Mgmt, Taxes, Quarterly Tax Reports USA	Summarizes quarterly federal and state withholding tax details for employees.
Federal Tax Data Status USA	GPUS_RC_FEDTAXSTA	Global Payroll & Absence Mgmt, Taxes, Federal Tax Data Status USA	Lists employees with federal withholding exemption or those with more than 10 allowances. (If the Do Not Maintain Taxable Gross and Do Not Withhold Tax option is selected on the Federal Tax Data page, these employees will appear in the report.) This report summarizes exemptions for the selected employees.
W-4 IRS Report USA	GPUS_RC_W4IRSRPT	Global Payroll & Absence Mgmt, Taxes, W-4 IRS Report USA	Lists employees with federal withholding exemption or those with more than 10 allowances.
W-4 Exempt Payees Report USA	GPUS_RC_W4EXEMP	Global Payroll & Absence Mgmt, Taxes, W-4 Exempt Payees Report USA	Lists employees who fail to complete new W-4 forms by the due date.
Identify W-4 Exempt Payees USA	GPUS_RC_SELW4EXEMP	Global Payroll & Absence Mgmt, Taxes, Identify W-4 Exempt Payees USA	Lists employees whose federal tax data includes specified parameters. (If the Maintain Taxable Gross; FWT Zero Unless Specified in FWT Additional Withholding option and the Do Not Maintain Taxable Gross and Do Not Withhold Tax option are selected on the Federal Tax Data page, these employees will appear in the report.)
Reset W-4 Exempt Payees USA	GPUS_RC_W4RSTEXEMP	Global Payroll & Absence Mgmt, Taxes, Reset W-4 Exempt Payees USA	Updates future-dated records that currently specify W-4 exempt status.
W-4 ePay Audit Report USA	GPUS_RC_W4EPAYRPT	Global Payroll & Absence Mgmt, Taxes, W-4 ePay Audit Report USA	Lists employees who enter W-4 information through self-service. Note. This report is available if you purchased ePay.
Identify W-5 EIC Payees USA	GPUS_RC_SELW5PYES	Global Payroll & Absence Mgmt, Taxes, Identify W-5 EIC Payees USA	Lists employees without EIC status.
Reset W-5 EIC Payees USA	GPUS_RC_W5RSTEIC	Global Payroll & Absence Mgmt, Taxes, Reset W-5 EIC Payees USA	Resets employee W-5 EIC status to None and updates status on future-dated records.
W-5 EIC Payees Report USA	GPUS_RC_W5EICRPT	Global Payroll & Absence Mgmt, Taxes, W-5 EIC Payees Report USA	Lists employees who fail to re-file EIC eligibility by the due date.

Running the Tax Deposit and Liability Report

Access the Tax Deposit and Liability USA page.

Report Request Parameters

Report Run By	Define what you want the report run by. Values are Calendar Group ID, Payment Date Range, and Year and Quarter.
Tax Year	Enter the tax year for which you want to run the report.

Tax Quarter

Select the tax quarter for which to run the report. Values are 1st Quarter, 2nd Quarter, 3rd Quarter, and 4th Quarter.

Population

Selection	Select the population for which to run the report. Values are Federal EIN and Reporting Company.
Federal EIN	Select the Federal EIN. This field appears only if you select Federal EIN in the Selection field.
Reporting Company	Select the reporting company. This field appears only if you select Reporting Company in the Selection field.
Payroll Cycle	Select the payroll cycle when the report is run. Values are All Cycles, Off-Cycle Only, and On-Cycle Only.

Running the W-4 IRS Report

Access the W-4 IRS Report USA page.

Report Request Parameters

Tax Year	Enter the tax year for which you want to run the report.
Tax Quarter	Select the quarter for which you want to run the report. Values are 1st Quarter, 2nd Quarter, 3rd Quarter, and 4th Quarter.
Electronic Processing	Select if you want to process the report electronically. If you select this check box, the Population group box becomes unavailable for entry.
Transmitter Control Code	If you select the Electronic Processing check box, this field becomes available for entry. Enter a code for the electronic processing.

Population

The Population group box is available for entry if the Electronic Processingcheck box is deselected.

Report Type Payee	Select the category of payees for which the report is run. Values are All Payees, Payees using ePay, and Single Payee.
EmplID	If you select Single Payee in the Report Type Payee field, enter the employee ID for which the report is run.
Report Exemption Allowances	Select the type of exemption allowance for the payee population being defined. Values are All, Claim Exempt, Exempt or > 10 Allowances, and More than 10 Allowances.