US Payroll - Payroll Taxes - Overview

Overview

Although there is tax setup in the Payroll module, all tax calculations are done through Vertex processing. It is vital that the Process Payroll screen is run for every employee as this is where the actual tax calculations are made in Enterprise.

Vertex

Vertex software is provided to complete calculation of taxes in the CMiC Enterprise Payroll module.

Vertex software information is available at: http://www.Vertexinc.com/

For further information, contact your CMiC Consultant.

Winfiler

CMiC software is designed to be used with Winfiler when preparing and filing tax information.

Winfiler information is available at: http://www.greatland.com/Products/products.asp?MerchID=102&Page=tax/

For further information, contact your CMiC Consultant.

Greenshades

CMIC software is designed to be used with Greenshades when preparing and filing tax information. If installed, Greenshades has the ability to generate XML files for annual W-2 transactions files, quarterly SUTA and W-2 files, and new hire files. The Greenshades interface files display the company legal name from GL. If there is more than one company in the FEIN, the first non-null, legal company name found is used. If no legal company names are found, the W-2s are printed with the FEIN legal name.

For further information, contact your CMiC Consultant.

Payroll Tax Setup

In order for a tax to be created and applied when processing Payroll, the following steps must be followed for each screen in this sub-menu:

  • US Payroll - Tax Settings: Access to Vertex and the locations of the required files must be defined for each individual user processing Payroll. This enables Enterprise and Vertex to communicate and complete required tax calculations and processing prior to printing checks.

  • US Payroll - Payroll Taxes: Define the tax codes used throughout Payroll when processed. In some cases the tax may also be optionally added to employees, though these are typically assigned automatically. It is not recommended to use reporting groups with taxes in order to fully display individual tax types and amounts on stubs and pay checks.

  • US Payroll - Payroll Tax Elements and US Payroll - Payroll Tax Elements - By Transactions: There is the option of defining taxable items. In some tax scenarios, the tax applies to more than base wages. If the tax applies to benefits, deductions, or expenses, this screen allows the assignment of items to be included in the tax calculations.

  • US Payroll - Tax Calculation Method: Some taxes may have multiple calculation methods.

  • US Payroll - Payroll Tax Accounting: GL accounts should be specified where the liabilities and transactions are processed for each tax code used. Each tax code should have its own debit and credit accounts.

  • US Payroll - Tax Rates: Tax rates must be defined for FUTA, SDI, SUI, and WC at the Federal and State levels.

Taxes are processed when Process Payroll is run. At that time, Vertex tables are used in the calculations and the amounts created.

The following are some additional notes to consider about taxes:

  • SUI/SDI taxes are calculated with the employee location taken from the Tax tab in the Employee Profile.

  • WC Calculations are based on Employee Profile, and are either done by employee or by job location.

  • Reporting details on stubs and pay checks are impacted by the use of reporting groups. Reporting groups allow taxes to be grouped which may be desirable, but mean that individual taxes are not displayed.

  • Employer taxes do not print on employee stubs and pay checks. Amounts can be viewed on the posting reports.

  • Taxes defined as payable by job include separate amounts and lines for each job and phase for that employee when viewed in the posting reports.

  • To verify taxes prior to printing the actual checks, use the Employee Pay History Query (standard Treeview path: US Payroll > Query > Employee Pay History) to view details for specific periods or employees.

Notes on EIC (Earned Income Credit)

The earned income tax credit is a refundable credit for certain qualified workers. It is intended to help offset some of the increases in living expenses and social security taxes. This credit reduces the amount, if any, of tax owed and may result in a refund to the taxpayer.

When setting up the EIC (Vertex Tax ID = 5), the Master setup should specify that this is not an employer paid tax and that it is not job allocated. This is a credit which is added to the employee’s net pay after all benefits, deductions, and taxes have been calculated. It is paid by the employer out of the federal withholding and FICA (Social Security and Medicare) taxes that have been collected by the employer on the government’s behalf.

Payroll Tax Reports

The following reports are available in the Tax Reports sub-menu (standard Treeview path: US Payroll > Reports > Tax Reports):