Employee Accumulated Tax Changes

This process is for use with Option 2 or Accumulated Income tax only (Field =FEDERAL TAX CALCULATION in User Specific Parameters Profile set to 2). Access to an employee's accumulated tax fields allow an employee's tax information to be manually adjusted throughout the calendar year if necessary. An employee's TAX PERIODS and TO DATE TAX PERIOD should be adjusted when an employee is added to the payroll system or a change is made that affects an employee's income tax, such as a change to any of the exemptions. The Accumulated Reset should also be run any time there is a change to the income tax formula.

All employee's accumulated tax values must be reset at the beginning of each calendar year. Note the Accumulated Tax Reset for further information on globally adjusting employees accumulated tax values.

The STATUS listed for an employee identifies 'UNCHANGED' if the employee's accumulated tax field have not been adjusted since the last start of the reset.

An employee's STATUS will list 'CHANGED' after an employee has been manually adjusted.

NOTE: The START PERIOD and END PERIOD fields allow an employee to be set to have the income tax calculated using the Accumulated Tax calculation (Option 2) while the payroll is set to use the standard Option 1 tax calculation. An employee can be setup to use the option 2 Accumulated Tax calculation for only a given range of pay periods or for the whole year.

When this option 2 tax override is used the Accumulated Tax Reset must be run at the beginning of the taxation year. The Employee Accumulated Tax Report includes an option which will report only those employee's overridden to the option 2 tax calculation.

When an employee is set to use the option 2 tax calculation part way through a year, the TAX PERIODS, TO DATE TAX PERIOD and OPTIONAL TAX YTD must be adjusted accordingly. These three fields must correspond.  For example, the OPTIONAL TAX YTD must be a total of all optional income paid as of the TO DATE TAX PERIOD and the TAX PERIODS must be reset to 1 as of the of the TO DATE TAX PERIOD. If the TO DATE TAX PERIOD is reset to 199907 and the next pay period to be processed is 199907 then the TAX PERIODS would be set to 1. If the TO DATE TAX PERIOD is reset to 199907 and the next pay period to be processed is 199908 then the TAX PERIODS would be set to 2.

Employee NO

Enter the Employee Number of the employee that is to be accessed.

Use look-up to select the employee by name.

Name

The employees name will be displayed.

Tax Periods

An employee's TAX PERIODS should represent the number of taxable pay periods to be used on the next pay run. The number of TAX PERIODS is set to '1' at the beginning of a calendar year and is automatically incremented by the system each time an employee is paid taxable income.

The TAX PERIODS should be reset to '1' when an employee's income tax information, such as exemption code, is changed throughout the calendar year.

When the TAX PERIODS changes, the TO DATE TAX PERIOD should also be adjusted.

The TAX PERIODS cannot exceed the number of pay period as defined by the pay cycle code from the employee's master function line.

To Date Tax Period

The TO DATE TAX PERIOD represents the pay period when the number of TAX PERIODS was last reset. Set the TO DATE TAX PERIOD to the current pay period (next pay period to be run) whenever the number of TAX PERIODS is reset.

Optional Tax YTD

The OPTIONAL TAX YTD is the total optional tax accumulated for the calendar year per employee. The OPTIONAL TAX YTD must be zeroed out before beginning each calendar year. You must reset the OPTIONAL TAX YTD when you change or reset the TAX PERIODS and TO DATE TAX PERIOD.

The START PERIOD and END PERIOD only apply when the payroll is set to use the standard tax calculation, Option 1.

Start Period

• Enter a pay period to indicate which pay period the employee's income tax should be calculated using the Accumulated Tax option 2.

A default of '000000' will be accepted to indicate an open start period.

End Period

• Enter a pay period to indicate the last pay period the employee's income tax should be calculated using the Accumulated Tax option 2.

A default of '999999' will be accepted to indicate a open end period.