Local Taxes Subtask

Use the fields in this subtask to ensure proper withholding of payroll taxes for employees as indicated by their local withholding forms.

Field	Description
Local Tax	Enter, or click to select, a six-character locality code. You must establish the local tax tables on the following screens before making this selection: Manage Local Taxes Manage Local Standard Deductions (if applicable) Manage Local Tax Tables
State	This field displays the state assigned to the specified local tax code on the Manage Local Taxes screen. This value is not stored in the database.
Priority	Enter a value between 1 and 9999 in this field to establish the order in which the local tax will be withheld when payroll is computed. One (1) represents the highest priority and 9999 represents the lowest priority. Numbers do not have to be consecutive, but must be unique for a given employee (cannot duplicate the same priority number for the same employee). This value will only be used on the Compute Payroll application.
Filing Status	Enter, or click to select, the employee's local tax filing status. The adjacent field displays the description for the employee's local tax filing status.
Exemptions	Enter the number of exemptions the employee claimed for this local tax. This exemption is used in the computation of local tax withholding. Note: Some local taxes make a distinction between regular exemptions and additional withholding deductions.
Dependents	If the local tax gives a credit based upon the number of dependents claimed, enter the number of dependents the employee claims in this numeric field.
First-time claimed dependents	Enter the number of additional dependent exemption being claimed for the first time. This exemption is good only for the calendar year in which the WH-4 claiming the exemption is submitted. The First-time claimed dependents year field is required if the number of first-time claimed dependents is not zero. This field will only be enabled for State of Indiana.
First-time claimed dependents year	Enter the year of the additional dependent exemption being claimed for the first time. The first-time claimed dependent exemption will only be applied in the year specified on this field. This field is required if the number of first-time claimed dependents is not zero and is only applicable for State of Indiana.
Number of adopted children	This field will track the actual number of adopted child dependent exemptions claimed on line 8 of Form WH-4 and will be used in the calculation of Indiana's state withholding. This field will only be enabled for State of Indiana.
Credits	If the local tax allows a credit (reduction in tax) based upon the number of credits claimed, enter the number of credits claimed by the employee in this numeric field.
Override Amount (per pay period)	To override the system-calculated amount and use a different tax withholding amount, enter the amount in this numeric field. Costpoint uses this amount for each pay period.
Override Percent	To override the system-calculated amount and use a different tax withholding percentage, enter the amount in this numeric field. Costpoint will multiply this override percentage by the local taxable wages to determine the local tax withholding each pay period. This percentage will be used in place of the local tax tables.
Additional Amount (per pay period)	If you want to add an additional amount to the system-calculated tax withholding amount, enter that amount in this numeric field. This amount is added to the system-calculated amount each pay period.
Start Date	Enter, or click to select, a date for the local tax to start. This date is normally the pay period start date. If the start date is later than the pay period end date, the local tax starts in the following pay period. Leave this field blank to indicate that the local tax withholding should start immediately.
End Date	Enter, or click to select, a date through which the local tax must be withheld. This date is normally the pay period end date. Leave this field blank to indicate that this local tax should continue indefinitely.

Pennsylvania

Field	Description
Resident PSD Code	Enter the Pennsylvania Political Subdivision Code assigned to the municipality in which the employee lives. If an employee lives in Pennsylvania, you must populate this field. If the employee both lives and works in Pennsylvania, you must withhold the higher of the two EIT Rates, as well as the Local Services Tax (LST), and make remittances to the local tax collector(s) for the worksite location(s). If the employee lives in Pennsylvania, but physically works outside of Pennsylvania, the DCED states, "As an out-of-state employer, you are NOT required to complete the Residency Certification Form or withhold the local Earned Income Tax (EIT) for a PA resident employee. However, the PA resident employee will still be subject to and owe the "Total Resident EIT Rate" based on their PA home municipality. Therefore, as an out-of-state employer, you may withhold the 'Total Resident EIT Rate' as a courtesy to your PA resident employee and make remittances to the local tax collector for their PA home municipality. If you choose not to withhold and remit, then please notify your PA resident employee that they will be responsible for making quarterly estimated payments on their own directly to the local tax collector(s) for their PA home municipality." According to the Pennsylvania DCED, the Resident PSD Code will be 880000 for an employee that works in Pennsylvania, but lives outside of Pennsylvania. This field is only editable if the local tax is linked to the state of Pennsylvania (PA) on the Manage Local Taxes screen.
Worksite PSD Code	Use this field to enter the Pennsylvania Political Subdivision (PSD) code assigned to the municipality in which the employee works. If the employee lives in Pennsylvania, but physically works outside of Pennsylvania, you may leave this field blank. According to the Pennsylvania Department of Community and Economic Development, "As an out-of-state employer, you are NOT required to complete the Residency Certification Form or withhold the local Earned Income Tax (EIT) for a PA resident employee. However, the PA resident employee will still be subject to and owe the 'Total Resident EIT Rate' based on their PA home municipality. Therefore, as an out-of-state employer, you may withhold the 'Total Resident EIT Rate' as a courtesy to your PA resident employee and make remittances to the local tax collector for their PA home municipality. If you choose not to withhold and remit, then please notify your PA resident employee that they will be responsible for making quarterly estimated payments on their own directly to the local tax collector(s) for their PA home municipality." This field is only editable if the Local Tax is linked to the state of Pennsylvania (PA) in the Manage Local Taxes screen.
Local Tax PSD Code	If the local code is linked to the state of PA (Pennsylvania), this field displays the PSD Code assigned to the local code. This value is not stored in the database.

Field

Description

Resident PSD Code

Enter the Pennsylvania Political Subdivision Code assigned to the municipality in which the employee lives. If an employee lives in Pennsylvania, you must populate this field.

If the employee both lives and works in Pennsylvania, you must withhold the higher of the two EIT Rates, as well as the Local Services Tax (LST), and make remittances to the local tax collector(s) for the worksite location(s).

If the employee lives in Pennsylvania, but physically works outside of Pennsylvania, the DCED states, "As an out-of-state employer, you are NOT required to complete the Residency Certification Form or withhold the local Earned Income Tax (EIT) for a PA resident employee. However, the PA resident employee will still be subject to and owe the "Total Resident EIT Rate" based on their PA home municipality. Therefore, as an out-of-state employer, you may withhold the 'Total Resident EIT Rate' as a courtesy to your PA resident employee and make remittances to the local tax collector for their PA home municipality. If you choose not to withhold and remit, then please notify your PA resident employee that they will be responsible for making quarterly estimated payments on their own directly to the local tax collector(s) for their PA home municipality."

According to the Pennsylvania DCED, the Resident PSD Code will be 880000 for an employee that works in Pennsylvania, but lives outside of Pennsylvania.

This field is only editable if the local tax is linked to the state of Pennsylvania (PA) on the Manage Local Taxes screen.

Worksite PSD Code

Use this field to enter the Pennsylvania Political Subdivision (PSD) code assigned to the municipality in which the employee works.

If the employee lives in Pennsylvania, but physically works outside of Pennsylvania, you may leave this field blank. According to the Pennsylvania Department of Community and Economic Development, "As an out-of-state employer, you are NOT required to complete the Residency Certification Form or withhold the local Earned Income Tax (EIT) for a PA resident employee. However, the PA resident employee will still be subject to and owe the 'Total Resident EIT Rate' based on their PA home municipality. Therefore, as an out-of-state employer, you may withhold the 'Total Resident EIT Rate' as a courtesy to your PA resident employee and make remittances to the local tax collector for their PA home municipality. If you choose not to withhold and remit, then please notify your PA resident employee that they will be responsible for making quarterly estimated payments on their own directly to the local tax collector(s) for their PA home municipality."

This field is only editable if the Local Tax is linked to the state of Pennsylvania (PA) in the Manage Local Taxes screen.

Local Tax PSD Code

If the local code is linked to the state of PA (Pennsylvania), this field displays the PSD Code assigned to the local code. This value is not stored in the database.

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Local Taxes Subtask

Contents

Pennsylvania