No tax after 35K of Severance pay(WT2286) for NC

[former_member194162]

Hi All,

Requirement:

After reaching 35k of Severance pay (WT2286) for North Caroline state, the tax should not be deducted.

What I did, I created a new WT2284 for the excess amount, which is non taxable.  When the amount reached to 35 in any of the pay period, the new WT2284 should be generated with extra amount.

Example:  Till last pay period the YTD of WT2286 is $33,892.40. And I am giving $5000 in current month and processing the payroll.  Now WT2286 should generate $1107.60 and remaining amount $3892.4 should generate with WT2284. But the rule is not calculating like this. The reason is, I think I am not capturing the current month’s amount in anywhere in the rule. Can anyone help me to achieve this?

Attached the rule for your reference.

Thanks

Bhairava

[former_member182083 · Accepted solution]

Hello Bhairava,

What you can do is have an additional wage type (apart from the severance pay wage type) that contains the amount $35000. This wage type should be configured as a non-taxable contribution (processing class 69 set to '2', processing class 68 set to '1' and processing class 71 set to 'S'). Also, this wage type will not have cumulation class 01 or 10 set.

When you process payroll for the affected employee write rule so that, $35000 will be reduced from the taxable gross and the employee will be taxed only on the balance.

We cumulate taxable earnings and non-taxable earnings from all wage types and then send it to BSI for calculating taxes.

Therefore, it does not matter what wage type the amount is stored in. The new wage type will be present in the payroll results and will be seen in table RT.

With Regards,

S.Karthik