Add a State
If the state income tax is a percentage of the federal tax, you don't need to set up the state tax information or table for that state.
- On the Payroll tab, click .
- At the top, click Add State.
- Enter information in the fields.
- Tax Name—Enter the name of the tax. For example, name the Arizona Single state tax "AZ-SING" and name the Arizona Married state tax "AZ-MAR." These names display as options in the Type drop-down list in the Wages/Master Paycheck window.
- 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 state tax.
- Round Off Deductions to Whole Dollar—Select if the state requires state taxes to be rounded off to the nearest whole dollar before being deducted from the wages.
- Maximum Contribution per Year—If the state 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 state tax to the employees' wages.
- Deduct Federal—Select if the state requires the federal tax to be deducted before the state tax is calculated. If there are restrictions on the amount of federal tax taken before state tax, enter the percentage in the Pct of Federal field or enter the amount in the Up to Maximum field.
- Standard Deduction—If the state allows a standard amount to be deducted before state 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 state allows a deduction for each personal or dependent exemption claimed, enter the amounts. The program uses exemption data entered in the employee's record with this field to calculate the exemption amount to subtract from the gross wages before state tax is calculated.
- Tax Credits for—If the state allows personal or dependent tax credits, enter the amounts. The program uses exemption data entered in the employee's record with this field to calculate the tax credit amount. This amount is subtracted from the calculated state tax before the state tax is subtracted from the gross wages.
- Special Adjustments—If there is a special adjustment to be made to the gross wages before state 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 state tax information, in the navigation pane, click State Tax Table.
- To load the latest tax information for the state, click Load State Tax Info.Note: 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.