Release: 2026-7.55.0
Update: August 31, 2026
United States
All States
State Income Tax – effective August 31, 2026
Added a new Multi-State Withholding setting that lets you override how tax is calculated for employees who live and/or work in multiple states.
By default, the system calculates withholding using each state's standard rules, per that state's Employer Tax Guide. Use this setting if the default calculation doesn't meet your tax requirements.
Available options:
| Value | Behavior |
| Resident Only | All nonresident work-state wages are taxed as if earned in the resident state. Work-state tax is zero. |
| Nonresident Only | Nonresident wages are taxed only in the nonresident work state. Resident-state tax is zero. |
| Zero in Both | Both resident-state and work-state tax return zero. |
| None | The resident and work states are calculated independently, with no interaction between them: each state taxes only the wages actually earned there. |
| All | The work state taxes only its own wages. The resident state taxes all wages (as if everything were earned there), then gives a credit for the work-state tax already paid. |
| All with No Credit | Same as all, but the resident state does not give credit for work-state tax — so the same wages can effectively be taxed twice. |
| Difference | The resident state taxes its own wages, then adds a "top-up" if its tax rate on the work-state wages would have been higher than what the work state charged. All state wages are included when computing subject wages and gross subject wages. |
| Difference (Deprecated) | Same calculation as difference — only resident-state wages are used when computing subject wages and gross subject wages. Tax results are identical to difference. |
| Full | The work state taxes only its own wages. The resident state taxes its own wages, then adds what it would charge on the work-state wages too — with no credit for tax paid to the work state. |
| Default | Restores the state's default value (from the standard variable table). Useful when running multiple payrolls sequentially without resetting all engine settings individually. Not needed for Web API users. |
Colorado
State Income Tax – effective August 31, 2026
The Colorado Filing Status options have been updated to align with the state's current W-4 requirements. The available options are now:
- Single or Married filing separately
- Married filing jointly
- Married, but withhold at higher Single rate
- Head of Household
To update an employee's filing status: Go to Employee Payroll Settings > Tax Settings.
Denver Employer Occupational Tax (OPT) – ACTION REQUIRED - effective August 31, 2026
Colorado Occupational Privilege Taxes are flat, monthly head taxes assessed on both employees and employers once an employee's earnings in the jurisdiction meet a minimum wage threshold. Previously, only the employee portion of the Denver OPT was available in Tax Maintenance. The employer portion was missing, so it did not calculate on paychecks even when the employee portion applied.
We've also added descriptive guidance to two employee’s OPT tax settings that previously had no explanation, to help with configuration:
- Primary OPT – Indicates whether this is the employee's primary Occupational Privilege Tax jurisdiction. Since an employee can only owe OPT to one primary jurisdiction at a time, this setting helps determine which tax applies.
- Number of Exemptions – Specifies the number of exemptions claimed for OPT purposes, which affects whether the tax applies to the employee.
ACTION REQUIRED:
- Navigate to Tax Maintenance and run Update Taxes to retrieve the new Denver OPT employer tax code.
- Review your Denver-based employees' tax setup to confirm the employer tax is properly assigned.
- Verify paycheck calculations for affected employees on their next payroll run.
Glendale Employer Occupational Tax (OPT) – ACTION REQUIRED - effective August 31, 2026
Colorado Occupational Privilege Taxes are flat, monthly head taxes assessed on both employees and employers once an employee's earnings in the jurisdiction meet a minimum wage threshold. Previously, only the employee portion of the Denver OPT was available in Tax Maintenance. The employer portion was missing, so it did not calculate on paychecks even when the employee portion applied.
We've also added descriptive guidance to two employee’s OPT tax settings that previously had no explanation, to help with configuration:
- Primary OPT – Indicates whether this is the employee's primary Occupational Privilege Tax jurisdiction. Since an employee can only owe OPT to one primary jurisdiction at a time, this setting helps determine which tax applies.
- Number of Exemptions – Specifies the number of exemptions claimed for OPT purposes, which affects whether the tax applies to the employee.
Note: OPT is a flat monthly tax withheld once per calendar month — a $0 amount on later paychecks within the same month is expected behavior.
ACTION REQUIRED:
- Navigate to Tax Maintenance and run Update Taxes to retrieve the new Denver OPT employer tax code.
- Review your Denver-based employees' tax setup to confirm the employer tax is properly assigned.
- Verify paycheck calculations for affected employees on their next payroll run.
Greenwood Village Employer Occupational Tax (OPT) – ACTION REQUIRED - effective August 31, 2026
Colorado Occupational Privilege Taxes are flat, monthly head taxes assessed on both employees and employers once an employee's earnings in the jurisdiction meet a minimum wage threshold. Previously, only the employee portion of the Denver OPT was available in Tax Maintenance. The employer portion was missing, so it did not calculate on paychecks even when the employee portion applied.
We've also added descriptive guidance to two employee’s OPT tax settings that previously had no explanation, to help with configuration:
- Primary OPT – Indicates whether this is the employee's primary Occupational Privilege Tax jurisdiction. Since an employee can only owe OPT to one primary jurisdiction at a time, this setting helps determine which tax applies.
- Number of Exemptions – Specifies the number of exemptions claimed for OPT purposes, which affects whether the tax applies to the employee.
Note: OPT is a flat monthly tax withheld once per calendar month — a $0 amount on later paychecks within the same month is expected behavior.
ACTION REQUIRED:
- Navigate to Tax Maintenance and run Update Taxes to retrieve the new Denver OPT employer tax code.
- Review your Denver-based employees' tax setup to confirm the employer tax is properly assigned.
- Verify paycheck calculations for affected employees on their next payroll run.
Sheridan Employer Occupational Tax (OPT) – ACTION REQUIRED - effective August 31, 2026
Colorado Occupational Privilege Taxes are flat, monthly head taxes assessed on both employees and employers once an employee's earnings in the jurisdiction meet a minimum wage threshold. Previously, only the employee portion of the Denver OPT was available in Tax Maintenance. The employer portion was missing, so it did not calculate on paychecks even when the employee portion applied.
We've also added descriptive guidance to two employee’s OPT tax settings that previously had no explanation, to help with configuration:
- Primary OPT – Indicates whether this is the employee's primary Occupational Privilege Tax jurisdiction. Since an employee can only owe OPT to one primary jurisdiction at a time, this setting helps determine which tax applies.
- Number of Exemptions – Specifies the number of exemptions claimed for OPT purposes, which affects whether the tax applies to the employee.
Note: OPT is a flat monthly tax withheld once per calendar month — a $0 amount on later paychecks within the same month is expected behavior.
ACTION REQUIRED:
- Navigate to Tax Maintenance and run Update Taxes to retrieve the new Denver OPT employer tax code.
- Review your Denver-based employees' tax setup to confirm the employer tax is properly assigned.
- Verify paycheck calculations for affected employees on their next payroll run.
Indiana
County Tax – effective August 31, 2026
Previously, running Assign Taxes or Import Taxes could omit Indiana county taxes if the county configured in Employee Payroll Settings (Indiana County of Residence as of January 1 and Principal Employment) didn't match the employee's current address or work location. These counties will now appear on the Taxes tab as expected, regardless of address match.
Kentucky
State Income Tax – effective January 1, 2026
The state supplemental tax rate has been corrected from 4.0% to 3.5%.
Minnesota
Paid Family Medical Leave (PFML) – ACTION REQUIRED – effective August 31, 2026
Corrected an issue where, if the employer picked up part of the employee's contribution, subject wages could be overstated and PFML tax over-collected. PFML taxable wages now correctly match SUTA.
ACTION REQUIRED: If you pay part of your employees' PFML contribution, then review year-to-date PFML taxable wages and withholding for accuracy. Going forward, PFML withholding will calculate correctly with no further action needed.
Ohio
Worked-in City Tax – ACTION REQUIRED - effective August 31, 2026
Corrected an issue where employees working in an Ohio location with both a JEDD/JEDZ tax and a city tax had both taxes withheld, effectively doubling work-location withholding (for example, Norton City Tax at 2.0% withheld alongside Norton-Barberton JEDZ Tax at 2.0%). Only the JEDD/JEDZ tax is required and is now withheld for the worked-in location; the city tax is no longer withheld in these cases.
The resident (lived-in) city tax is unaffected and continues to be withheld as normal.
ACTION REQUIRED: If you have employees working in Ohio JEDD/JEDZ locations, review year-to-date withholding for affected work locations to confirm accuracy.
Aberdeen City Tax – effective January 1, 2026
The tax rate has been reverted from 2.0% to 1.0%. The tax credit remains 100% for taxes paid to other municipalities, up to a maximum credit of 1.0%.
Marion City Tax – effective January 1, 2026
The Tax credit has decreased from 100% to 50% for taxes paid to other municipalities, up to a maximum credit of 2.0%, which remains the same. The tax rate also remains 2.0%.
