Add a Locality
If local income tax is a percentage of federal tax, you don't need to set up the local tax information or table for that locality.
- On the Payroll tab, click Tax Setup > Local Tax.
- At the top, click Add Locality.
- Enter information in the fields.
- Wage Limits—Enter the salary range that this tax applies to.
- Federal Filing Status of Exempt also Means Exempt from this Tax—Select if a federal filing of exempt also means exemption from this local tax.
- Round Off Deductions to Whole Dollar—Select if the locality requires local taxes to be rounded off to the nearest whole dollar before being deducted from the wages.
- Maximum Contribution per Year—If the locality has a maximum amount of tax that an employee can pay in a year, enter this amount. If the employee reaches this maximum amount, the program does not apply the local tax to the employees' wages.
- Deduct Federal—Select if the locality requires the federal tax to be deducted before the local tax is calculated. If there are restrictions on the amount of federal tax taken before local tax, enter the percentage in the Pct of Federal field or enter the amount in the Up to Maximum field.
- Standard Deduction—If the locality allows a standard amount to be deducted before local tax is calculated, enter the fixed amount or the percentage of gross wages that can be deducted, whichever is higher. If you can only deduct a certain amount, enter the amount in the Up to Maximum field.
- Exemption Allowances—If the locality allows a deduction for each personal or dependent exemption claimed, enter the amounts.
- Tax Credits for—If the locality allows personal or dependent tax credits, enter the amounts.
- Special Adjustments—If there is a special adjustment to be made to the gross wages before local tax is calculated, enter the following information in the fields: percentage of gross wages to be considered, amount per exemption, wage base amount for exceeding income, and percentage of income exceeding that base.
- After you enter the local tax information, in the navigation pane, click Local Tax Table.
- To load the latest tax information for the locality, click Load Tax Info.Note: You can obtain local tax tables from your local or city government. This table calculates how much tax to withhold from an employee's paycheck. For more, see Withholding and EIC Tables.
- After you complete the tax table, click Save.