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How to setup Advanced Supplemental Tax Rate
How to setup Advanced Supplemental Tax Rate
Description of Issue
In the IRS Publication 15-T it talks about an option of how to tax employees for supplemental wages based on previous payrolls in the month, the current payroll and uses the federal taxes already withheld. How do I set this up in Munis?
Context
- Tax Tables
- Payroll Control Settings
- Run Control
- Pay Master
Cause
Resolution
If a site determines they would rather use the Advanced Supplemental method to withhold income tax from supplemental wages vs the flat percentage the following will need to be defined:
- Go to Run Control Settings (Payroll>Payroll Setup>Payroll Control Settings. Click Accept. Click Run Control in the toolbar).
- Navigate to the applicable payroll run control type. Click Update. Next to the Supplemental Pay field, select A-Advanced Supplemental. Click Accept.
- Repeat step 2 for each applicable run type.
- Go to Pay Master (Payroll>Payroll Setup> Pay Master).
- Search for the pay types that will be using the Advanced Supplemental Tax calculation. Click Update. Next to the Tax Method field select S-Supplemental. Click Accept.
- Repeat step 5 for all applicable pay types.
- Go to Deduction and Benefit Master (Payroll>Payroll Setup>Deduction and Benefit Master).
- Search for the Federal Tax and State Tax Deductions (ex. 3000|4000). Confirm the Tax Table Type field is defined with 01-Like Federal.
- Steps 1-8 will need to be complete prior to creating the payroll warrant where this supplemental calculation method should take place.
Note - These supplemental tax calculations are defined at the Run Control level so the calculation would be applied to that particular payroll run type(s) and all applicable employees/pay types within the payroll.
Additional Information
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