This is a new topic in 12.05.
Tiered Supplemental Earnings Tax Calculations
Multiple fields available in the Tax Authority Configuration screens support tiered supplemental earnings tax calculations. This is particularly relevant for Massachusetts, which requires different tax rates based on year-to-date earnings thresholds.
State Tax Authority Configuration
Four fields are available on the State Info layout of the Tax Authority Configuration detail screen (for Tax Authority Type = State) to support tiered supplemental earnings tax calculations.
Fields | Description |
Additional Supplemental Tax Rate | Specifies the additional tax rate to apply to supplemental earnings that exceed the Starting Wage threshold.
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Starting Wage | Sets the year-to-date earnings threshold at which the additional supplemental tax rate begins to apply.
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Starting Wage Basis | Annualized: Based on annualized earnings for the current pay period. Cumulative - All Wages: Uses year-to-date total taxable wages. Cumulative - Supplemental Wages Only: Uses only year-to-date supplemental earnings. |
Use State Details for Starting Wage and Suppl. Tax | When checked, the system uses employee-specific state tax details (deductions and exemptions) for calculating supplemental tax on amounts over the threshold. |
Federal Tax Authority Configuration
Two fields are available on the Federal Info layout of the Tax Authority Configuration detail screen (for Tax Authority Type = Federal) to support tiered supplemental earnings tax calculations.
Fields | Description |
Additional Supplemental Tax Rate | Applies an additional rate to supplemental earnings over the threshold. |
Starting Wage | Defines the threshold amount. |