Please see attached for a list of 2024 Payroll tax updates. Please note that some changes may require an action to be utilized. They will be flagged with a Y in Action Required column.
Update: April 25, 2024
Canada
Federal Employment Insurance Tax – Effective 4/25/2024
A new field, Custom Employment Insurance tax rate, has been added to Tax Maintenance ~ Company Tax and to Employee Payroll Settings ~ Tax Settings to support EI Premium Reduction Program.
Optional: Employers that qualify can use this field to add the lower tax rate to be applied to the employer portion of the tax.
United States
Washington Paid Medical and Family Leave- Effective 4/25/2024
Corrected an issue where the taxable wage for Washington PFML was doubling on Government Reporting using the WA PMFL Form.
Update: April 5, 2024
United States – HSA – Action Required – Effective 3/19/24
The Federal HSA family contribution limit has changed from $8350 to $8300.
ACTION REQUIRED: Review employee HSA family contributions that may have exceeded the $8300 limit.
Alabama – Income Tax – Effective 1/1/24
Overtime wages earned in Washington DC by an Alabama resident are exempt from income tax.
Indiana – Income Tax – Effective 1/1/24
REVERTED: “Indiana will tax residents fully and will not provide credit for wages earned in another state.”
Indiana will continue to provide a tax credit for the tax paid to another state.
Iowa – Income Tax – Effective 2/23/24
The 2023 IA W-4 form and prior can still use the total allowances field. The engine will take the number of allowances and multiply by 40.
NOTE: Filing status is no longer used or supported. It was never used to calculate Iowa Income Tax.
Kentucky City, County or OLF – Action Required – Effective 3/8/2024
Corrected an issue where the subject wages could potentially exceed the wage base when the following conditions were all met:
1. The tax being calculated is a percentage-based Kentucky city or county OLF with a wage base
2. Both regular and supplemental wages have been set up.
3. The combined regular and supplemental wages are currently crossing the wage base
ACTION REQUIRED: Review Kentucky local taxable wages and taxable gross and adjust for any employee that may have been exposed to this issue.
Kentucky Campbell County Senior Citizen Tax – Effective 1/1/24
Corrected an issue that caused this tax to be missing from paychecks.
Kentucky Middlesboro OLF – Effective 4/1/24
The rate increased from 2% to 2.45%.
Kentucky West Buechel OLF – Action Required – Effective 1/1/24
Correction: The wage base does not have a limit. However, only $50,000 in tax can be collected.
ACTION REQUIRED: Review any employees in this local that may have exceeded $50,000 taxable wages and make corrections.
Oregon Quarterly Tax Report (OQ) showed the incorrect amounts for Taxable wages for Family Leave Insurance. The report has been corrected so that the correct amount displays.
ACTION REQUIRED: Review Quarter 1 2024 reports to ensure that the correct taxable wages show for Family Leave Insurance (FLI).
NOTE: As of January 1, 2024, FLI no longer follows Unemployment taxable wages but instead follows the Social Security Wage base.
Pennsylvania FSA – Effective 1/1/23
The taxability of Dependent Care FSA benefits has been updated for Pennsylvania State Tax. Both Employee and employer contributions are no longer subject to withholding tax.
Pennsylvania Homestead LST - Effective 1/1/24
The total LST amount increased from $40 to $52.
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@SoniaEchols90 Do you know if there are known issues with the April tax update regarding the US federal income tax withholding calculations. We’ve seen some employees withholdings change incorrectly after applying the tax update.
@SoniaEchols90 Do you know if there are known issues with the April tax update regarding the US federal income tax withholding calculations. We’ve seen some employees withholdings change incorrectly after applying the tax update.
Hi,
I am not aware of any issues. If you are not able to validate then please contact support.
Thank you,
Sonia
I just had the same thing reported. Client has salaried employees so taxable wages and and FIT are very consistent. They just performed Tax Maintenance and FIT tax dropped significantly. What is going on with the Tax Maintenance?
Paychecks with different withholding amounts are:
– Ref # 1509 – Previous FIT WH: $103.84 – New FIT WH: $131.54
– Ref # 1508 – Previous FIT WH: $405.52 – New FIT WH: $277.59
– Ref # 1510 – Previous FIT WH: $717.35 – New FIT WH: $549.56
– Ref # 1511 – Previous FIT WH: $275.36 – New FIT WH: $318.36
Hi Tammy,
Can you please open a case so that we can investigate?
Thank you,
Sonia
@SoniaEchols90 - I did Case #368907 was created a few minutes ago. FYI...I have another client reporting issues with FIT but this one indicates the FIT went up. I still need to research this one. I will create a case on it if I find the same situation.
Our customer is having the same issue. They are salaried and FIT went up. See case 369113
Just an update that we are actively looking into this issue. Impacted employee are using the 2020+ W4.
The issue has been resolved. We re-deployed the release and it is now working. Checks just need to be recalculated.
Update: 6/19/2024
We have transitioned from Symmetry's legacy Location Code Service (LCS) to Symmetry Location Service (SLS).Action Required
This is a new and improved geocoding Location Service.
NOTE: We have an application change that will be delivered in a future release before customers can reap the full benefit of the new service as described below.
With the SLS in place, the engine will be able to precisely identify the applicable taxes at a more granular local level. It returns more precise location codes allowing you to pinpoint additional tax jurisdictions that may exist inside (or partially inside) traditional city boundaries. Which will help resolve the determination of whether JEDDs and other local taxes are applicable/ subject to withholding.
Action Required:
Navigate toTax Maintenance (PR208000)
Update Taxes under Tax Maintenance (PR208000)
Assign Taxes to Employees
Navigate to Employee Payroll Settings (PR203000) ~ TAXES
Review tax setup of problematic employees with local taxes to ensure taxes are properly set up.
If the employee reached the First ceiling of wages and did not exceed the Second ceiling of wages for CPP/QPP then the subsequent payrolls did not collect the Second ceiling CPP/QPP amounts. A change has been made so that the Second ceiling CPP/QPP wages will be collected. However, with this solution the limit will not be respected, and amounts will continue to be collected unless you follow the steps below. A permanent solution will be delivered later this year.
ACTION REQUIRED: The workaround until the permanent solution is delivered is to store the YTD values of the Second ceiling in tax settings.
Run the Taxes by Employee(PR641067) report for Year: 2024 and Tax Code: CAN CPP. Do not check Include Unreleased.
Export to Excel.
Find any employees with YTD Tax Wages greater than $68,500. Take YTD Tax Wages less $68,500 to arrive at the employee’s Second Ceiling Wages YTD.
For example, an employee’s YTD Tax Wages are $71,175.01. $71,175.01 – $68,500 = $2,675.01
Next take YTD Tax Amount less $3,867.60 to arrive at the Second Ceiling Tax YTD.
For example, an employee’s YTD Tax is $3,974.50. $3,974.50 - $3,867.50 = $107
Navigate to Employee Payroll Settings (PR2030PL) ~ TAXES ~ CAN CPP for the employee.
In the YTD Second Additional CPP Tax Contribution enter the employee’s Second Ceiling Tax YTD.
For example, $107.
In the YTD Second Additional CPP Wage Contribution enter the employee’s Second Ceiling Wages YTD.
For example, $2,675.01
Calculate payroll as normal.
NOTE: You will need to do this for every payroll until the employee has reached the max tax and max taxable wages for the Second Ceiling and you have set YTD Second Additional CPP Tax Contributionto $188and the YTD Second Additional CPP Wage Contributionto $4700 under Employee Payroll Settings (PR2030PL) ~ TAXES ~ CAN CPP.
The same logic will be used for QPP. Please Note that the Max Tax for QPP is different from CPP, see table below. Also, the fields to be updated under Employee Payroll Settings (PR2030PL) TAXES ~ CAN QPP will be YTD Second Additional QPP Tax Contribution and YTD Second Additional QPP Wage Contribution.
NOTE: If an employee transferred mid-year to or from Quebec to or from another province then enter the YTD tax and Taxable Wages for the Frist Tier only. Use the Second Additional Transferring Into for the Second-Tier amounts.
For example, an employee transfers from Ontario to Quebec. They have $70,000 YTD CPP Taxable Wages and $3,927.50 YTD CPP Tax. Under Employee Payroll Settings (PR203000) ~ TAXES ~ CAN QPP Set:
CPP YTD Tax to 3867.50
CPP YTD wages to 68500
YTD Second Additional CPP Tax Contribution Transferring Into to 60
YTD Second Additional CPP Wage Contribution Transferring Int to 1500
2024
YMPE
Max Wages
basic
exemption
1st Ceiling
%
1st Ceiling
Max Tax
YAMPE
Second Ceiling
%
Second Ceiling
Max Tax
Total
Tax
Second Ceiling
Max Wages
CPP
68,500
3500
5.95%
3,867.50
73,200
4%
188
4,055.50
4700
QPP
68,500
3500
6.4%
4,160
73,200
4%
188
4,348
4,700
YMPE - Year’s Maximum Pensionable Earnings is set by the government every year in January based on increases in the average wage in Canada (First ceiling).
YAMPE - Amount of the second earnings ceiling starting in 2024. It will be 7% higher than the First ceiling.
Federal/Quebec Wage Type – Effective 6/19/2024
Corrected an issue that caused earnings to be incorrectly taxed when an Earnings Type Codes (PR102000)Wage Type: set to “Custom” and had a Taxability Setting of “Cash Non-Subject Non-Taxable for a Tax Code”.
United States
Federal HSA Effective – Effective 6/19/2024
When setting up a Deduction and Benefit Codes (PR101060) form with a Code Type: “HSA” under USTAX SETTINGS will now default with a Reporting Type: “Under Box12W - W - Company's Contribution to an Employee's Health Savings Account (HSA)” under EMPLOYER CONTRIBUTION. Previously, Reporting Type: under EMPLOYER CONTRIBUTION was defaulting to “Box12DD - DD - Cost of Employer-Sponsored Health Coverage”.
Optional: Review your set up of current HSA accounts to ensure Employer Contributions are correctly mapped to Box 12W on the Employee's W-2.
Federal Simple IRA - Effective 6/19/2024
Corrected SIMPLE IRA scenario involving year-to-date Section 125 contributions. Section 125 employee contribution amounts are automatically subtracted from compensation when calculating SIMPLE IRA employer contributions, but any year-to-date Section 125 employer contributions will now be correctly included in the calculation when Allow employer SIMPLE IRA contributions is checked.
Allow employer SIMPLE IRA contributions is found under Tax Maintenance (PR208000) ~ COMPANY TAX ~ FEDOR Employe Payroll Settings (PR203000) ~ TAX SETTINGS ~ FED.
Federal Simple IRA - Effective 6/19/2024
Added a new flag Use increased SIMPLE IRA limit to Tax Maintenance ~ Company Tax Data and to Employee Payroll Settings ~ TAX SETTINGS to support Secure Act 2.0. For 2024, there are new increased limits available. Employees participating in a SIMPLE IRA plan can use an increased deferral limit of $17,600 (i.e, a 10% on the $16,000 annual contribution limit) if the employer meets one of the follow conditions:
Employer has 25 or fewer employees receiving at least $5000 of compensation or
Employer has more than 25 but not more than 100 employees and makes either a 4% matching contribution or a 3% nonelective contribution.
NOTE: If the employer elects to make a 4% matching contribution, the employer contribution must be entered as a percentage rather than a flat amount.
All States Income Tax – Action Required - Effective 6/19/2024
Employees can be marked as exempt by selecting the Is Exempted Flag under Employee Payroll Settings ~ Taxes~ Tax Settings for the state SIT selected. We will be removing the flag Employee is exempt from state withholding under Employee Payroll Settings ~ Tax Settings in a future release.
Action Required: Ensure that employees exempt from a State Income tax are flagged as exempt using the Is Exempted flag under Employee Payroll Settings ~ Taxes~ Tax Settings for the state SIT.
Multi-State Calculations Income Tax – Effective 6/19/2024
Corrected a rounding issue that would occur in multi-state calculations when all the following conditions were met:
You are using the combined calculation method
The resident state is one of the following: Maine, Minnesota, Missouri, West Virginia
If Minnesota, then you must have set up the tax to either use default rounding or to always round (Minnesota recommends rounding, but it is not mandatory like the other three listed)
The nonresident work state is NOT returning a rounded result.
In this scenario, any credit from the nonresident state was applied after the rounding, causing the resident state to incorrectly return an unrounded tax amount. The credit will now be applied prior to the resident state tax getting rounded.
Kentucky, Corbin City OLF – Effective 6/19/2024
Corbin City exists both inside and outside of Whitley County. We have confirmed with the Whitley County Occupational Tax Administrator that Whitley County collects the occupational tax for the portion of the City of Corbin within its borders. Therefore, the Corbin OLF will now only be returned for the portion of the city outside of Whitley County.
Massachusetts Employer Medical Assistance Contribution (EMAC) - Effective 6/19/2024
On (Tax Maintenance (PR208000) ~ TAX CODES ~MA ER EMAC)
If the Override Wage Base miscellaneous parameter is NOT set:
The tax engine will now correctly obey the wage base and will stop withholding once crossed by the combined year-to-date wages and year-to-date employer benefit contributions to a 401(k) or Roth 401(k).
If the Override Wage Base miscellaneous parameter is set:
While the description for Override Wage Base states that is intended to be a "Year-to-date Subject Wages Override," it was previously acting like a gross wages override and was re-adding year-to-date employer benefit contributions to 401(k)s or Roth 401(k)s. The tax engine will no longer re-add these when Override Wage Base has been set.
Massachusetts Income Tax – Effective 1/1/2024
Massachusetts State Tax began calculating a 4% surtax on annual income over $1,053,750. Previously, this surtax could only be calculated on regular wages. With this release, we've added support for calculating this surtax on payrolls that only include supplemental (bonus) wages.
Calculations involving only regular wages, or involving both regular and supplemental wages, are unaffected by this update.
A new flag, Annual Wages has been added to support “flat” supplemental calculation method. When determining the surtax amount for flat supplement payrolls the tax engine will add current supplemental wages + Year-to-date supplemental wages + value set for Annual Wages.
Annual Wages flag is found under Tax Maintenance (PR208000) ~ COMPANY TAX ~ MA OR Employe Payroll Settings (PR203000) ~ TAX SETTINGS ~ MA.
Ohio Bellefontaine City Income Tax – Effective 7/1/2024
Rate increased from 1.333% to 1.6%.
Ohio Bucyrus City Income Tax – Effective 7/1/2024
Corrected tax credit from 100% to 88.89%
.
Ohio Coal Grove City Income Tax – Effective 6/4/2024
Added an address exception with the tax engine so that Coal City Grove City Tax was returned for 1238 County Road 24, Ironton, OH 45638
Ohio Coshocton City Income Tax – Effective 1/1/2016
Added with a rate of 1%. RITA will administer this tax.
Ohio Mercy West JEDD III Tax – Effective 10/1/2024
Rate decreased from 1.5% to 1%.
Ohio JEDD Tax – Effective 6/19/2024
Corrected potential for tax credit limit to be exceeded when an employee lives in one city and works in another city, and that work location is part of a JEDD, then the credit to the resident city was being applied for both the work city and the JEDD, causing the resident credit limit to be exceeded. Also, Resident City Tax Calculation Option is NOT set to None.
Resident City Tax Calculation Option is found under Tax Maintenance (PR20800) ~ COMPANY TAX ~OH OR Employe Payroll Settings (PR203000) ~ TAX SETTINGS~ OH.
Pennsylvania Income Tax Effective 6/19/2024
Corrected an intermittent issue with calculation results that could occur when you are running a calculation that involves two (or more) different Pennsylvania addresses that meet all of the following conditions:
The addresses result in the same location code
The addresses have different applicable EITs (due to different school districts within the same city, etc.)
The EITs have the same tax rate
Previously, the tax engine would return the withholding results under one of those EITs at random. Now, it will consistently use the correct EIT.
Vermont Child Care Contribution – Effective 7/1/2024
Support for Vermont's new Child Care Contribution (CCC) tax for both employees and employers has been added. The total tax is 0.44%, but employers can optionally elect to withhold up to 25 percent of the required contribution (i.e., 0.11%) from employee wages. The employer may choose to withhold a smaller portion of employee wages or choose not to withhold any amount from employees. Any input values greater than 0.11% for the Employee Percentage will cause the tax engine to use the maximum percentage of 0.11%. Unless specified otherwise, the tax engine will assume that the employer is not withholding any amount from employees (i.e., that the employer is paying the full 0.44% by default).
Employee Percentage flag is found under Tax Maintenance (PR208000) ~ TAX CODES ~ VT CCC OR Employe Payroll Settings (PR203000) ~ TAXES ~ VT CCC.
Virginia Income Tax - Effective 4/1/2024
The standard deduction amount increased from $8000 to $8500.
Washington Cares (LTI) - Effective 6/19/2024
Resolved an issue where WA Cares wages appear to be doubling the taxable wage using Government Reporting (PR504000) on WA PFML FORM.
Wisconsin Income Tax – Effective 1/1/2024
We've added support for Wisconsin's nonresident withholding threshold. No withholding will occur for a Wisconsin nonresident employee if their annual wages are less than the threshold.
Effective 1 January 2009, the Wisconsin State Tax nonresident minimum withholding threshold is $1,500.
Effective 1 January 2024, the Wisconsin State Tax nonresident minimum withholding threshold is $2,000.
The Wisconsin Department of Revenue has released the April 2024 Wisconsin Tax Bulletin which includes this withholding requirement threshold increase for nonresidents, retroactive to the beginning of the year.
Update: July 22, 2024
Canada
Federal Employment Insurance (EI) – effective July 22, 2024
Modified the Custom Employment Insurance Tax Rate from two digits to four digits pass the decimal place to increase precision.
United States
Georgia Income Tax - effective 7/1/2024
Flat tax rate decreased from 5.49% to 5.39%. Dependent allowance increased from $3,000 to $4,000.
Idaho Income Tax - effective 5/21/2024
The tax brackets for Single and Married persons have been updated. The annual withholding allowance increased from $4,534 to $3,600. The supplemental flat rate decreased from 5.8% to 5.695%.
Kentucky
Hardin County OLF - effective 7/22/2024
Hardin County will now return a $0 tax calculation whenever one of the following OLF has also been calculated: Elizabethtown OLF, Radcliff OLF, Vine Grove OLF and West Point OLF.
Grant County OLF - effective 7/1/2024
Rate increased from 1.5% to 2.5%
Bourbon County OLF – effective 7/1/2024
Rate increased from .75% to 1.25%
Flemingsburg OLF – effective 7/1/2024
Rate increased from .75% to 1.25%
Massachusetts
Workforce Training Fund – effective 1/1/2020
Employer contributions for 401(k) and Roth 401(k) will now be treated as taxable and will increase the subject wages.
COVID-19 Recovery Assessment – effective 1/1/2020
Employer contributions for 401(k) and Roth 401(k) will now be treated as taxable and will increase the subject wages.
Ohio
Income Tax – effective 7/1/2024
The rate for the top tax bracket (More than $100,000) has decreased from 4.41% to 3.8%.
Blanchester City Tax – effective 7/1/2024
Added with a rate of 1%, a credit factor of 100% and a credit rate of 1%. This tax is administered by RITA.
College Corner City – effective 7/1/2024
Added with a rate of 1%, no tax credit or credit limit. This tax is administered by RITA.
Glenmont City – effective 7/1/2024
Added with a rate of 1%, no tax credit or credit limit. This tax is administered by RITA.
Holmesville City – effective 7/1/2024
Added with a rate of 1%, no tax credit or credit limit. This tax is administered by RITA.
Louisville City – effective 1/1/2016
Credit rate updated from 1.2% to 2%
Mingo Junction City – effective 1/1/2023
Tax rate and credit rate decreased from 2% to 1%.
Perrysburg Toledo JEDZ – effective 1/1/2024
Deactivated as this tax is not collected through payroll withholding. Instead, the JEZ tax is allocated by the tax department of the City of Perrysburg from payments received from the Perrysburg City Tax, based on city records of business address that are subject to the JEDZ. Only businesses located within the city boundaries of Perrysburg are subject to the JEDZ.
The annual wage brackets for the employee CSPT have been updated.
Pennsylvania
Local Service Tax – effective 7/22/2024
Moved the Primary LST setting to be tax-specific instead of company and employee specific.
Antrim Township EIT – effective 7/1/2024
Nonresident rate decreased from .5% to 0%.
Dunkard Township LST – effective 7/1/2024
The municipal LST low-income exemption (LIE) amount increased from $0 to $12,000.
Duquesne City EIT – effective 7/1/2024
Resident rate decreased from 1.9% to 1%. Nonresident rate decreased from 1.4% to 1%.
Lincoln Township LST – effective 7/1/2024
Total LST amount increased from $5 to $10.
Northumberland Borough EIT – effective 7/1/2024
Resident rate increased from 1% to 1.45%.
Penn Township LST – effective 7/1/2024
Total LST amount increased from $5 to $10.
Petrolia Borough LST – effective 7/1/2024
Total LST amount decreased from $52 to $5.
Point Township EIT – effective 7/1/2024
Resident rate increased from 1% to 1.45%.
Rockefeller Township EIT – effective 7/1/2024
Resident rate increased from 1% to 1.45%.
Snydertown Borough EIT – effective 7/1/2024
Resident rate increased from 1% to 1.45%.
Sunbelt City EIT – effective 7/1/2024
Resident rate increased from 1% to 1.45%.
Upper Augusta Township EIT – effective 7/1/2024
Resident rate increased from 1% to 1.45%.
Utah Income Tax – effective 6/1/2024
Tax rate decreased from 4.65% to 4.55%. The value of a base allowance increased for Single ($440 from $415) and Married ($880 from $830). Amount subtracted from wages increased for Single ($8,8826 from $8,371) and Married ($17,652 from $16,742)
Complete list for 2024.
Update: August 29, 2024
Canada
Federal Employment Insurance (EI) – effective August 29, 2024
The code was corrected to ensure the calculation method is correctly set. Previously the EI was calculating too high.
United States
Arkansas
Arkansas Income Tax - effective dated July 1, 2024
The withholding formula has been updated. The supplemental tax rate decreased from 4.4% to 3.9%.
Arkansas Texarkana - effective date August 29, 2024
If an employee had Texarkana Resident checked and the employee lives in Texarkana TX but earns wages in Texarkana, AR the tax returned was always zero. Now this exemption can be turned off by unchecking Texarkana Resident for Texas. The employee wages will then be taxed in Arkansas.
District of Columbia Paid Family Leave – effective July 1, 2024
Employer rate increased from .26% to .75%
Hawaii Short Disability Insurance (SDI) – effective July 1, 2024
Corrected an issue when a single payroll run had both Regular and Supplemental wages and the premium cost was set to -1. Now the wages will be combined and the weekly wage base will be respected.
Indiana Allen County Income Tax – effective August 29, 2024
The Allen County Tax will now correctly treat employee contributions to a SIMPLE IRA as pre-tax for 2024, which means the contributions will reduce the subject wages for the tax.
This has always been the behavior for Allen County prior to April 2024, this fix restores the original intended behavior.
In addition, Allen County tax will now be collected when paying Supplemental wages. Previously, when calculating a Paycheck (PR302000) that has Supplemental earnings for a work location in Allen County of Indiana state, the Taxable Supplemental Wage of the location was incorrect.
Kansas Income Tax – effective July 1, 2024
Annual allowance has increased from $2.250 to $2,320. Tax brackets and personal allowances have been updated.
Kentucky Hurstbourne Acres OLF – effective July 1, 2024
New tax with a rate of 1%.
Note: Hurstbourne Acres - OLF has "stacked" taxes with the Louisville / Jefferson County - OLF.
Massachusetts Income Tax – effective July 1, 2024
Corrected an issue if a Full Time Student had supplemental wages. If the employee is marked as a full-time student, now their supplemental wages will be correctly treated as exempt.
Ohio
Mansfield City Income tax – effective January 1, 2025
Tax rate for resident and nonresident increased from 2% to 2.25%.
Village of Indian Hill Income Tax – effective January 1, 2024
Resident tax rate decreased from .475% to .45%.
Oregon
Income Tax – effective August 29, 2024
The state income tax withholding formula for Oregon uses the federal tax withheld as part of the withholding calculation (Oregon State Income Tax Withholding). There was previously an issue in multi-state scenarios with Oregon only when the Oregon regular wages didn't match the federal regular wages. The Oregen Wages instead of federal wages to calculate the FIT amount that is used as the deduction to the Oregon SIT calculation. Now the actual regular FIT tax amount will be used as the federal deduction amount for Oregon SIT (which means the deduction will decrease, which then increases the calculated tax)
Corbin City OLF – effective August 29, 2024
When both Whitley and Corbin City OLF taxes were set for an employee then taxes were returned only if there was a calculated amount. Going forward both will be returned even if the tax amount is zero.
Multnomah County Preschool Tax – effective August 29, 2024
If an employee is subject to Multnomah County tax withholding under the withholding calculation above, supplemental payments must have withholding applied. Income above $200,000 and below $400,000 must be withheld at a rate of 1.5% and income above $400,000 must be withheld at a rate of 3%.
Previously, the entire bonus amount would be calculated using the highest applicable rate. Now, the correct rate will be applied for the portions over and under the threshold(s).
Pennsylvania Petrolia Borough LST – effective July 1, 2024
LST amount increased from $5 to $52.
Our customer has adopted the Secure 2.0 Act Section 109 provisions related to catch-up contributions for employees aged 60-63 that is going into effect January 1, 2025. They have a large number of employees and will need to plan ahead for making changes to the employees’ tax settings. Will the options to “Use increased SIMPLE IRA limit” or “Use Catch-Up Contributions Limits” cover the changes for January or is there another setting they will need to have in place before January 1st?
@cbittle - I checked on this with our tax engine provider. Yes, they are aware of this need. Change will be coming in the future.
Calculation methods were not being honored if setup to use another method other than the default calculation method. Going forward, the tax methods selected will be utilized.
ACTION REQUIRED: Review the setup of Calculation methods under Tax Maintenance ~ TAX CODES (PR208000). Any employee that does not follow the default set for your company should be reviewed as well under Employee Payroll Settings ~ TAXES (PR203000). Below are the possible calculation methods: XX CAN PIT applies to BC, MB, NB, NL, NS, ON, PE, QC, SK and YT provinces\territories. Note: Commission/Draw is not available for QC Income Tax.
Annualized - This method multiplies the wages in the current pay period by the number of pay periods in a year to approximate total annual wages. Tax is calculated on the total annual wages. This amount is divided by the number of pay periods in a year to determine the tax for the current pay period.
Annualized Concurrent Aggregation - This method for determining the tax on Supplemental Pay is like the Concurrent Aggregation method, except that the Supplemental Pay amount is not annualized prior to being added to the annualized Regular Pay amount. The tax is calculated on the total amount of wages.
Annualized Previous Aggregation - This method is like the Previous Aggregation method, except that supplemental wages are not annualized prior to being added to the annualized Regular Pay amount.
This method combines the annualized Regular Pay amount from the previous pay period and the Supplemental Pay amount. Tax is calculated on this total amount. The amount of the tax paid on the previous Regular Pay wages is subtracted from the total. The result is the tax amount on the Supplemental Pay.
Commissions and Draws - This method is used for Federal and Provincial (except Quebec) calculations for an employee paid by commission.
Concurrent Aggregation - This method combines the Regular Pay with the Supplemental Pay into a total amount. Taxes are calculated on this total amount.
Cumulative - This method is used when wage amounts fluctuate over a range of pay periods. This method divides the sum of the current wages plus the Year-to-Date wages by the number of pay periods to date to compute an average wage for a given pay period. The tax is computed on the average wage as if this amount were paid to the employee each pay period. The taxes paid on Year-to-Date wages are subtracted from the tax on the average wages to determine the tax amount for the current pay period.
Cumulative Aggregation - This method combines the current wages and Year-to-Date wage amount to determine an average pay period wage. Tax is calculated on the average amount and multiplied by the number of pay periods so far, including the current pay period. The tax calculated is subtracted from the Year-to-Date tax amount that was already deducted. The current tax represents the amount to withhold for the current period.
Flat Rate - This method multiplies the current wage amount for the current pay period by a flat percentage.
Flat Rate Combined - This method multiplies the Supplemental Pay amount for the current pay period by a flat percentage. The tax on the Regular Pay is calculated using the annualized method. The total tax is the sum of these two calculations.
Flat Amount - This method applies a state-specified flat amount to a range of taxable gross wages.
Lump Sum - This method is used when an employee receives a special payment as defined in Canada Revenue Publication T4001. Taxes are calculated at a flat percentage rate.
No Self-Adjust - This method compares the Year-to-Date wages against the maximum wage limit specified for the jurisdiction. No adjustment is made if an employee has not paid sufficient taxes to date.
Previous Aggregation - This method combines regular wages from the previous pay period and the current supplemental wages. Taxes are calculated on this total amount. The amount of the tax paid on the previous Regular Pay wages is subtracted from the total. The result is the tax amount on the Supplemental Pay.
Self-Adjust -This method compares the Year-to-Date wages against the wage limit specified for the jurisdiction. Vertex Payroll Tax also checks the Year-to-Date tax amounts paid. An adjustment is made, if necessary, to "catch up" on an employee's taxes. After a wage limit is reached, no additional taxes are calculated.
Self-Adjust at Maximum - This method performs the same calculation as a Self-Adjust method when the employee's Year-To-Date gross has reached the maximum wage base. After a maximum wage base is reached, no taxes are withheld.
Note: The no self-adjust method is used prior to the maximum wage being reached.
Blank fields for the TD1 will now send a null value instead of a zero when paychecks are calculated. This could cause a change in the tax collected.
ACTION REQUIRED: Depending on the needs of your employees update Tax Maintenance ~ Company Settings (PR208000) by searching on Total Claim Amount under the Name column and set the default to blank, zero or the minimum personal claim amount. If Total Claim Amount is blank, it will use the basic personal amount in effect for that year as defined on Payroll Deductions Online Calculator - Canada.ca. If you choose to use blank, then the field cannot be marked as required. Then verify for employees that should only have the basic personal amount are set to default on Employee Payroll Settings ~ TAX SETTINGS (PR203000).
Each employee should fill out a TD1 for Federal and One for Province of Employment when hired or have a life change that impacts taxable wages. If the employee’s Province of Employment is Quebec, then they will fill out the TP-1015.3-V. Personal tax credits will be on line 10. Information from the employee's TD1(s)/TP-1015.3-V must be set up for each employee under Employee Payroll Settings ~ TAX SETTINGS (PR203000).
If an individual does not give the completed TD1 form, the individual's tax deductions should only include the basic personal amount you estimated based on their income.
If the employee has more than one employer, then they can only claim them for one employer at a time and should enter 0 in line 13. TOTAL CLAIM AMOUNT of the TD1 form.
Two new boxes have been added to the 2024 T4: Box 94 -Indian (exempt employment Income) - RPP contributions and Box 95 - Indian (exempt employment income) Union dues.
ACTION REQUIRED: (If applicable)
Setup up new deductions under Deduction and Benefit Codes (PR101060) screen to support First Nation employees T4 reporting of RPP contributions and/or Union dues associated with (exempt employment Income) and map the Federal Reporting type to Box 94 and/or Box 95.
Adjust prior 2024 deductions for RPP and Union Dues for 2024 for any earnings mapped to Box 71 - Indian (exempt employment income) to the new deduction code(s) so that they report in the appropriate boxes on the T4.
NOTE: An application change is needed also for this solution, it will be delivered later with other Year End items.
Update: October 21, 2024
Canada –
Canada – T4 – 10/21/24
Corrected an issue with the letter ‘P’ randomly appearing in box 28 instead of a check mark.
Release: 2024-6 Update: November 14, 2024
Canada
Federal
CPP/QPP – effective November 14, 2024
Corrected an issue in Canadian Payroll when calculating a Paycheck (PR3020PL) the taxes CPP2 and QPP2 were exceeding the annual limit wage limit when the employee’s earnings exceeded Teir 1. Now when the employee has wages in Teir 2 and beyond the tax will be correctly calculated and the limits respected. NOTE: Prior workaround provided in the June 19, 2024 Tax Update to manually key in amounts on Employee Payroll Settings (PR203000) ~ TAXES will be ignored.
Yearend Webinar on November 20, 2024 at 11:30 - 1 PM EST. Register using the link below.
A new flag has been added to Tax Maintenance ~ COMPANY TAX for SIMPLE IRA to support changes for 2025.
Higher Benefit Catch-Up Limit - Select to use additional increased catch-up limits for the following benefit plans for individuals ages 60-63: SIMPLE IRA, 401(k), 403(b), 457(b), Roth 401(k), Roth 403(b), and Roth 457(b).
No change to catch-up contributions for ages 50+. Section 109 of the SECURE 2.0 Act amends section 414(v) of the Code to increase the annual limit on catch-up contributions, beginning with the 2025 taxable year, for individuals between ages 60 and 63. For non-SIMPLE plans, the increased limit is the greater of $10,000 or 150% of the regular catch-up limit for 2024, indexed for inflation. For SIMPLE plans, the increased limit is the greater of $5,000 or 150% of the regular catch-up limit for 2025, indexed for inflation. * SECURE 2.0 guidance published in the Internal Revenue Bulletin 2024-2
401(k) – effective December 5, 2024
A new flag has been added to Tax Maintenance ~ COMPANY TAX for 401(k). Benefit Annual Limit -Select to stop benefit contributions at the annual wage limit. Clear to stop benefit contributions at the benefit annual limit.
Social Security – effective January 1, 2025
Wage Base increases to $176,100.
All States
Additional Tax – effective December 5, 2024
A new flag has been added to Tax Maintenance ~ COMPANY TAX for states with income tax. Always Collect Additional State Tax - select to collect additional State Income Tax even if there are no earnings in the state. If the check box is cleared, Additional State Income Tax is applied only if the wages are earned in the state.
Alabama
Goldwater City Tax – effective January 1, 2019
The taxable wage base increased to $20,000. The tax rate remains .75% and the tax limit remains $150.
Irondale OLF - effective October 1, 2024
The resident and non-resident rate decreased to .5%.
California
State Disability Insurance – Effective January 1, 2025
The rate increased to 1.2%.
Colorado
Paid Family and Medical Leave (FAMLI) - effective January 1, 2025
Wage base increases to $176,100.
Connecticut
Paid Leave - effective January 1, 2025
Wage base increases to $176,100.
Illinois
State Unemployment - effective date July 1, 2021
Employer contributions to 401k and SIMPLE IRA should be treated as taxable for state unemployment. The taxable (subject) wages will increase.
University Park Employer’s Expense Tax – deactivated December 4, 2024
The University Park Employer's Expense Tax has been deactivated for all payroll dates. An audit resulted in insufficient information to confirm that this tax was ever officially enacted.
Indiana
Decatur County – effective October 1, 2024
Tax rate decreased to 2.45%
Fayette County - effective October 1, 2024
Tax rate increases to 2.82%
Fulton County - effective October 1, 2024
Tax rate increases to 2.88%
Henry County - effective October 1, 2024
The tax rate increases to 2.02%.
Iowa
State Unemployment Tax – effective January 1, 2025
Taxable wage base increases to $39,500.
Kentucky
Boone County OLF – effective January 1, 2025
Wage base increases to $77,400.
Cambell County Taxes Updated – effective January 1, 2025
Alexandria OLF
Wage base increases to $176,100.
Campbell County OLF
Wage base increases to $176,100.
Cold Spring OLF
Wage base increases to $176,100.
Highland Heights OLF
Wage base increases to $176,100.
Wilder OLF
Wage base increases to $176,100.
Florence OLF – effective January 1, 2025
Wage base increases to $176,100.
Hardin County OLF - effective date November 12, 2024
If Hardin County is set up with Fort Knox, Upton or Sonora the tax for Hardin County OLF will no longer calculate.
Jackson OLF – effective January 1, 2025
Wage base increases to $176,100.
Newport OLF – effective January 1, 2025
Wage base increases to $176,100.
Union OLF – effective January 1, 2025
Wage base increases to $176,100.
Warren County ITA Transpark Tax – effective January 1, 2003
The non-resident rate increased from 0% to 1.5%. The resident rate remains 1.5%.
Warsaw OLF – effective January 1, 2025
Wage base increases to $176,100.
Winchester OLF – effective date October 1, 2024
The resident and non-resident rate increased to 2.15%.
Maine
State Income Tax – effective January 1, 2025
Personal exemption amount increases to $5,150. Tax Table has been updated.
Massachusetts
Paid Family and Medical Leave - effective January 1, 2025
Wage base increases to $176,100.
Missouri
State Unemployment – effective January 1, 2025
Wage base decreases to $9,500
Nevada
State Unemployment – effective January 1, 2025
The taxable wage base will increase to $41,800.
Nevada Career Enhancement Program – effective January 1, 2025
The taxable wage base will increase to $41,800
New Jersey
Unemployment Tax - effective January 1, 2025
Wage base increases to $43,300
SUI – effective January 1, 2025
Wage base increases to $43,300
Employee SDI – effective January 1, 2025
Wage base increases to $176,100. The rate increases from 0% to .23%.
Employer SDI – effective January 1, 2025
Wage base increases to $43,300
Workforce Development/Supplemental Workforce Funds – effective January 1, 2025
Wage base increases to $43,300
New York
Paid Family Leave Insurance – effective January 1, 2025
The tax rate increases to .388%
Weekly taxable wage base increases to $1,757.19
Annual Wage base increases to $91,373.88 ($1,757.19 x 52 weeks)
RE-employment Service Fund – effective January 1, 2025
Wage base increases to $12,800
Ohio
Bradford City Tax – effective October 1, 2024
Will be administered by RITA. This can affect credit calculation in certain multi-city scenarios.
City of Cheviot JEDD Tax – effective January 1, 2025
Several updates for JEDD taxes administered by City of Cheviot.
Western Ridge JEDD I Tax
Wage Base increases to $143,991
Christ-Children’s JEDD II Tax
Wage base increases to $136,396
Harrison Green JEDD IV Tax
Wage base increases to $132,525
UDF JEDD Tax
Wage base increases to $ 127,757
Coal Grove City Tax – effective November 1, 2024
Will be administered by RITA. This can affect credit calculation in certain multi-city scenarios.
Cridersville City Tax – effective November 12, 2024
Tax credit has been corrected from 25% to 100% for all payroll dates.
Jamestown City Tax – effective January 1, 2025
The tax rate increases to 1%. Tax credit decreases to .50%. Credit limit increases to 1%.
Lorain-Amherst JEDD Tax - effective January 1, 2013
Retroactively corrected the tax rate from 1.5% to 2.5%.
McAlister’s JEDD VI Tax – effective January 1, 2025
Wage base increases to $124,884.
Mount Healthy- Springfield Township- Hamiton County JEDD Tax effective January 1, 2015
Retroactively corrected the tax rate from 1.5$ to 2%.
Newark JEDD Tax – effective January 16, 2024
Retroactively corrected the following JEDD/JEDZ taxes administered by Newark Income Division:
Etna Corporate Park JEDZ1 Tax
Etna Corporate Park JEDZ2 Tax
Pataskala JEDD Tax
Credit factors (tax credits) are corrected from 0% to 100% and the credit rate (credit limits) from 0% to 1%.
Orange Township JEDD Tax – Effective October 1, 2024
New JEDD tax with a tax rate of 2.5%. The rate will follow the City of Worthington and will be administered by RITA.
Ridgeway City Tax – effective July 1, 2024
Tax increased to 1%.
Rittman City Tax – effective January 1, 2025
Tax increased to 1.5%
Zanesville – Perry Township JEDD Tax – effective August 4, 2020
Added with a tax rate of 1.9%. The tax is administered by the City of Zanesville.
Oregon
Lane Transit Tax – effective January 1, 2025
The tax rate increases to .8%.
TriMet Transit Tax - effective January 1, 2025
The tax rate increases to .8237%.
Pennsylvania
Washington Township LST – deactivated January 1, 2024
