How does PeopleSoft calculate taxes when an employee transfers, after the pay end date and before the check date.
The paysheet will be created with PA as the work location, because this is where the employee worked for the time frame of 12/1/00 through 12/15/00.
The paycheck shows the following:
UI will be taken in the new location. In this case it will be OH. If you check the EE tax records, you will see that the UI record is on for OH as of 12/19/2000. Withholding - The employee should be taxed in both states because the reciprocity rule for Ohio residents is "tax in both work and resident state". Ohio will be the resident state. He did live and work in PA and then transferred so that as of the check date he lives and works in Ohio. The residency for this check's tax calculations is based on where he lives on the check date, so Ohio would be right. But he performed the work in PA earlier in the pay period, so a work tax is calculated.
In reviewing this scenrio, the bottom line is that the system now does some "fancy dancing." It looks at the old state as the Work State and the new state as the live state, and calculates taxes based on reciprocity rules between those two states. Of course, if you don't want this "fancy" calculation, then it's back to the same old issue of procedure and timing, and having HR or whomever, wait to enter transfer info UNTIL PAYROLL HAS BEEN CONFIRMED. Then they can go in and enter "backdated" transfer info and new tax locations to their hearts content!
The paycheck shows the following:
UI will be taken in the new location. In this case it will be OH. If you check the EE tax records, you will see that the UI record is on for OH as of 12/19/2000. Withholding - The employee should be taxed in both states because the reciprocity rule for Ohio residents is "tax in both work and resident state". Ohio will be the resident state. He did live and work in PA and then transferred so that as of the check date he lives and works in Ohio. The residency for this check's tax calculations is based on where he lives on the check date, so Ohio would be right. But he performed the work in PA earlier in the pay period, so a work tax is calculated.
In reviewing this scenrio, the bottom line is that the system now does some "fancy dancing." It looks at the old state as the Work State and the new state as the live state, and calculates taxes based on reciprocity rules between those two states. Of course, if you don't want this "fancy" calculation, then it's back to the same old issue of procedure and timing, and having HR or whomever, wait to enter transfer info UNTIL PAYROLL HAS BEEN CONFIRMED. Then they can go in and enter "backdated" transfer info and new tax locations to their hearts content!
