Puerto Rico Tax

For Puerto Rico residents, you specify the employee's status and exemptions.

Deltek Modification Date - 1/24/14

Enter the following field information for residents of Puerto Rico on the Withholding grid on the Payroll tab of the Employees hub:

Field	Description
Status	The Status field is based on the employee’s marital status and how much of the personal exemption the employee is claiming. Enter the status claimed by the employee on the employee’s Withholding Exemption Certificate: S or A: Single; or married, not living with spouse. 1 or B: Married, filing jointly and claiming all of the personal exemption for withholding, or head of household. 2 or C: Married, filing jointly, and claiming half of the personal exemption for withholding. 3 or D: Married, living with spouse, filing separately and claiming all of the personal exemption for withholding. 4 or E: Married, filing jointly and claiming none of the personal exemption for withholding.
Exemptions	Enter the total number of dependents claimed by the employee on the Withholding Exemption Certificate.
Other Exemptions	Puerto Rico’s tax calculations do not use the Other Exemptions field for calculating taxes.

Automatically Calculated Variables

Deltek automatically computes the following variables.

Optional Standard Deduction

The optional standard deduction is based on the employee’s filing status. The following amounts are used:

Status	Deduction
S or A	$3,500
1 or B	$7,000
2 or 3 and C or D	$3,500
4 or E	$0
A - E (Additional for Veterans)	$1,500

Allowance

The allowance is based on the number of exemptions in the first Exemptions field. It is determined by multiplying the number of exemptions by $2,500.

Deduction for Allowances

The deduction for allowances is based on the number of exemptions entered in the Other Exemptions field. It is determined by multiplying the number of other exemptions by $500.

How Deltek Calculates Tax

To calculate an employee's Puerto Rico State tax, Deltek does the following:

1. Multiplies the employee's gross pay per pay period by the number of pay periods in a year to determine annualized gross wages.
2. Subtracts the employee's optional standard deduction, allowance, deduction for allowances, and any 401(k) plan contributions from the employee's annualized gross wages to determine taxable income.
3. Calculates the net income tax by applying Tax Calculation Method 1 to the taxable income.
4. Divides the net income tax by the number of pay periods in a year to determine the amount to be withheld for the pay period. Deltek then rounds the withheld amount to the nearest dollar.