DEDUCTIONS: PRE-TAX

If you designated that a deduction is pre-tax, then you must also create pre-tax calculation records for federal, state and local taxes. You may create these calculation records manually, one at a time, or you may process a command to have the system create these records for you. If you want to have the system create these records for you, please move forward in this document to the section on TAXCRSUPD.

Use this option to manually designate the taxes on which your pre-tax deductions are subject. Any deduction that is not set up as pre-tax through this option will automatically be subject to ALL applicable taxation.

Before beginning this option, you must have set up a federal tax record, a state tax record for each state affected, and a local tax record for each local tax affected through Menu PBMANT, Item Payroll G/L Distributions.

HOW TO MAINTAIN THE MISCELLANEOUS DEDUCTION PRE-TAX FILE

To begin, on the “PayBill Library Master menu, select File Maintenance. The screen will display:

From the File Maintenance menu, drag the blue bar down, or right-click in the white space on the right side of the screen to display more options. Click [Deductions: Pre-Tax].

The screen will display:

Add or Change:

Defaults to add. If you wish to change a pre-tax deduction file already set up, click once on change to select (a black dot will appear next to your selection).

Company:

Defaults to company 01. If you wish to work with the pre-tax deduction file for a different company, key the desired company number.

Deduction:

Key the desired deduction code. (This code must have been previously set up through Menu File Maintenance, item PR GL Distributions.)

OR

Select a code by clicking the button (prompt and select button).

The screen will display:

If you do not see the code you want, and the [PageDn] button is not grayed out, then click [PageDn] to view more. When you get to the end, [Top] will start the selections over again. If you page down past a screen of selections, and wish to go back a screen, then click [PageUp]. To not select a code, click [Close]. When you see the one you want to use, either <DOUBLE-CLICK> on the description, or highlight and click [Select].

Tax Type:

Select a tax type code by clicking the button (prompt and select button) to the right of the tax type. Select from Federal, State or Local.

State/Local/Federal Code:

If you selected federal as the tax type code, key 01 in this area.

If you selected state or local, as the tax type code, key the code set up through Menu PBMANT, Item Payroll G/L Distributions,

OR

Select a code by clicking the button (prompt and select button).

The screen will display:

If you do not see the code you want, and the [PageDn] button is not grayed out, then click [PageDn] to view more. When you get to the end, [Top] will start the selections over again. If you page down past a screen of selections, and wish to go back a screen, then click [PageUp]. To not select a code, click [Close]. When you see the one you want to use, either <DOUBLE-CLICK> on the description, or highlight and click [Select].

If you selected Federal/01, the screen will display:

Subject To FIT:

If this deduction is subject to federal income tax, click once on this option to select (a checkmark will appear next to the selection).

If this deduction is NOT subject to federal income tax, leave this option unselected (no checkmark will appear).

Subject To FICA:

If this deduction is subject to FICA tax, click once on this option to select (a checkmark will appear next to the selection).

If this deduction is NOT subject to FICA tax, leave this option unselected (no checkmark will appear).

Subject To MEDICARE:

If this deduction is subject to MEDICARE tax, click once on this option to select (a checkmark will appear next to the selection).

If this deduction is NOT subject to MEDICARE tax, leave this option unselected (no checkmark will appear).

Subject To FUTA:

If this deduction is subject to FUTA, click once on this option to select (a checkmark will appear next to the selection).

If this deduction is NOT subject to FUTA, leave this option unselected (no checkmark will appear).

If you selected State, the screen will display:

Subject To SIT:

If this deduction is subject to state income tax, click once on this option to select (a checkmark will appear next to the selection).

If this deduction is NOT subject to state income tax, leave this option unselected (no checkmark will appear).

Subject To SUTA:

If this deduction is subject to SUTA tax, click once on this option to select (a checkmark will appear next to the selection).

If this deduction is NOT subject to SUTA tax, leave this option unselected (no checkmark will appear).

Subject To SDI:

If this deduction is subject to state disability insurance (SDI) tax, click once on this option to select (a checkmark will appear next to the selection).

If this deduction is NOT subject to SDI tax, leave this option unselected (no checkmark will appear).

If you selected Local, the screen will display:

Subject To LIT:

If this deduction is subject to local income tax, click once on this option to select (a checkmark will appear next to the selection).

If this deduction is NOT subject to local income tax, leave this option unselected (no checkmark will appear).

To add, change, or delete this data, click [OK].

To NOT add, change, or delete this data, click [Exit]. You will be returned to menu.

If you do NOT wish to add, change, or delete this data, but wish to begin again, click [Close]. You will return to the previous screen to try again.

If you wish to set up additional pre-tax deduction files or change existing ones, follow the preceding steps.

When you have finished with this option, click [Exit]. You will be returned to menu.

When finished, you should go to the File Printing menu and print the Miscellaneous Deduction Pre-tax file to verify the accuracy of your data entry.

TAXCRSUPD:

Creation of Pre-Tax records

If you have created a new deduction that is pre-tax, or if you have existing pre-tax deductions, and are adding a new state, or a new locality, you may use a command to have the system create them automatically. Before processing this command, make certain that the W-2 box areas are set up correctly for the current year. The system will use your responses to identify the deduction type.

To have the system create the records automatically, using the 2006 specifications from the American Payroll Association, you will key a special command. Your user profile must have the SKMANAGE group in order to process this command.

From a menu, click the button at the top of the screen. On the command line, key TAXCRSUPD and click [OK].

The screen will display:

The system will ‘clear’ out the pre-tax record file of all existing records, and will re-populate the file with the ‘hard-coded’ 2006 specifications.

If your system has local taxes or SDI, please be aware that the system automatically makes every pre-tax deduction code SUBJECT to SDI and local taxes.

If this deduction is EXEMPT from local tax or SDI, you must manually correct the Pre-Tax record when the automated program has finished.

You will have to make these adjustments EACH time the command is processed, since the file is completely cleaned out and re-populated each time. Click [OK] after you have read the screen.

If you are certain that your W-2 boxes are current, and you want to continue with this process, key YES and press <enter>.

If you do NOT wish to continue, key NO and press <enter>. You will return to menu.

If you keyed YES, the screen will remain displayed while the program processes. When it has finished, you will return to menu. You should go to the File Printing menu and print the Miscellaneous Deduction Pre-tax file to verify that there are not any local taxes or SDI responses that need to be adjusted.