Supplemental earnings include bonuses and awards. Most states do not have a separate withholding rate for supplemental earnings, but if one does, you must set up the rates in that State Supplemental Earnings window. On the Payroll tab, click Tax Setup > State Tax > State Supp. Tax Setup.

To apply the rates set up in this window, in the Master Paycheck grid of the employee's Wages/Master Paycheck window, select Supplemental Earn or Bonus in the Type column. If you don't set up rates in this window, the state income tax is calculated on supplemental earnings the same way it is calculated for regular wages.