Use this subtask to designate various choices regarding how a deduction should be treated for each locality's income tax when payroll is computed. For example, a 401(k) deduction can be subtracted from wages before income tax is computed for some localities, and not for others.
If a locality for which an employee has been set up in the Employee Taxes screen in Costpoint Employee is not found here, the system will perform the calculation based on the federal tax setup for this deduction.
This non-editable field displays the deduction code and description for which you are applying the following taxability rules.
After selecting the New Line button on the toolbar, enter the locality name for which you want to set up taxability rules. You can enter the code, or use Lookup to select the code. Locality IDs are validated against the Locality table. You must have already set up localities in the Local Taxes screen before you can enter the code here.
The locality name is displayed automatically once the code for the locality is entered.
Enter one of the following system-provided codes depending on the locality income tax computation for this deduction:
"F" (Fully Taxable) - The deduction has no effect on calculation of local income tax. An example of this would be an employee advance deduction.
"W" (Taxable, Not Subject to W/H) - The deduction is taxable when added to gross pay, but withholding is not required. An example of this would be Excess Life Insurance. This method will not be recognized if a locality has been set up with a "Y" method for calculating tax liability. See the Local Taxes screen for setting up Localities.
"E" (Exempt) - The system subtracts the deduction from gross pay before computing taxes. An example of this would be a cafeteria plan deduction.
Changes to this screen update the Deductions Local Taxable (PR_DED_LOC_TXBL) table.