Incorrect Connecticut Tax Withholding despite updates from SAP and BSI

[Former Member]

Hi all,

We applied BSI 9.0e tax updates #35-40, as well as the Connecticut tax withholding changes. The tax calculated by BSI is much than lower than expected, based on the BSI QuickFormula and Connecticutu2019s

http://www.ct.gov/drs/lib/drs/forms/2011withholding/2011withholdingcombinedcatchupwithholdingtaxtabl... website.

We think the problem centers around a parameter YP value of 0 being sent to BSI. We are using a pay period 17/2011, therefore YP should be equal to 16 I think. Instead the value is 0.

Tax update #35 contains the new Connecticut ER Debt Repayment tax (TT 11), so we have no choice but to retro our Connecticut employees back to 1/1/2011. The 0 value is occurring in a retro situation.

Also note the following:

1) We have applied all available Connecticut SAP and BSI notes, including 1622036, 1634872, 1536313, 1571815, 1594617 and 1627290. The latest note versions were pulled from the Service Marketplace on Oct. 9.

2) Note 1634872 made changes to the YP parameter. It IS in our system.

3) The employees tested WERE NOT hired in the middle of year, DO NOT have any additional CT withholding specified in IT0210-CT and DID NOT move into another payroll area.

4) We are on cyclic 9.0.e.

Has anyone else run into this? Any suggestions?

[Former Member]

Hi Alicia, with the latest SAP notes - SAP excludes any additional withholding from the YTD tax number on the BSI script file. We think this is correct - that way BSI does not consider any additional amount withheld. There's a separate parameter that store any additional withholding.

For your employees that are wrong - did they have an additional withholding amount during the year?

[alicia_robinson]

Jay -

We have both scenarios - employees with additional and without. and the YTD tax amount does not match in either case to the payroll results. I do see the "AA" in the script that shows the period additional amount, but nothing that would show the YTD additional amount. I compared our test environment to the produciton environment and the additional shows the same, but the production environment YTD taxes matches the payroll results (so this would be regular & additional taxes??). If they are not going to show the YTD additional amount then how are we to know that the YTD tax amount showing is right or wrong??

Sorry, but this has just been the biggest mess....next to the 9.0 upgrade that is.

Thanks!

[alicia_robinson]

Hello -

Is anyone still having problems with the CT tax withholding? We are on 605, BSI 9.0e TUB45 and have applied every note out there for CT.

We have employees that have a regular and supplemental payment in the same check and the system is adding these two amounts together under 'regular' and sending back taxes which we understand is how this is supposed to work now.

Our new problem is that we have employees that have a "gross up supplemental" payment that is paid at the same time as a regular/supplemental payment and the "gross up" is being taxed at a very high rate. For example, the taxable wages are $145 but the taxes are $365. I would say there is something wrong with that calculation!! Has anyone else had this issue?

Thanks!

[Former Member]

Hi Alicia,

At this point we've not had additional problems with Connecticut tax. I'd suggest making sure that you've got the latest versions of the CT Tax SAP notes applied (i.e. go to SNOTE and select Download Latest Version for your CT tax notes). We did have problems last year that matched your situation, and getting the latest Note version fixed things for us.

It's also possible that you've found an issue we haven't seen yet. Our CT payrolls have been pretty vanilla so far, although we're getting into bonus season here next month. Good luck!

Jay

[alicia_robinson]

Jay -

Thanks for the reply. I've had our basis group check the notes a couple of times and they've told me that the latest version is there. Did you do anything for the IT0234 that was suggested earlier on? That is the one piece that we didn't have set up, but that does seem to make our issue go away. I also found table V_T5UTLA which allows you to set up supplemental methods and this also seems to work for our issue. Making the change in the table is much easier than creating IT0234's for our CT population.

Thanks!

[Former Member]

Hi Alicia,

WIth the very latest notes from SAP, we were satisfied with the calculation. Your issue sounds similar to what we were facing until we applied the latest note versions. Be sure to go to transaction SNOTE, re-enter all the Connecticut tax withholding note numbers, and select download latest note versions. SAP released new versions of several CT notes this week - many of which we had applied earlier. Before we had applied the latest note versions, we had several cases where an employee had double or triple their normal CT tax withholding.

By the way, we are on 9.0e and tax update #40 as well. We have another Connecticut payroll processing on Monday (fingers crossed!).

Jay Crowley

[alicia_robinson]

Jay,

We just applied all those notes yesterday so I would have hoped that would be the most recent version, but I will get them to go back and do them again just to be sure (what could it hurt at this point - right??).

Thanks for the quick reply and crossing my fingers for your payroll run to be a success. We need all the help we can get at this point!!

Thanks again!

[Former Member]

Hi everybody,

Just wanted to say thanks for the follow-ups today.

Rajeev u2013 yes, we noticed similar problems #2 and #3 that you indicate in your posting. Weu2019re fortunate to have a smaller employee base in Connecticut. Fortunately nothing had moved to Production yet. We do disagree with how SAP is currently calculating CT tax in cases where a supplemental payment is included, and also when the employee had additional withholding in the year. But we are behind on our tax updates and want to get BSI back to the current tax update in Production. We were planning to live with the calculation in the hopes that something better comes along shortly.

I just re-installed the latest versions of the Connecticut notes, and it tells me that notes 1643809 and 1644556 are new versions from what we had earlier. Weu2019ll retest our CT cases with these, and see if things look even better.

I agree this has been a pain. As I said, we were already behind on BSI updates and we hated to hold things up further for this one issue.

Jay

[alicia_robinson]

Jay -

When you retested did the taxes calculate correctly? We have applied all the notes that have been released and I still think the calculations are in error. We are on 9.0e and TUB 40. The BSI Interface is not showing the correct YTD taxes - it does show the correct YTD wages - but the taxes are less than what is in the employee's payroll results. This is creating a huge difference in the taxes from the last payroll ($560) to the new payroll ($1775). My plan is to send this issue to BSI to explain why the correct YTD taxes are not being pulled in, but wanted to see if anyone else has this same issue.

Thanks!

[Former Member]

Hi

I just wanted to assure you that you are NOT alone in this mess. We had similar issues after we upgraded BSI TF 9.0 and we escalated it to the highest level in BSI and SAP to get this fixed, but unfortunately the solutions ( sap claims they have complete solution now) came very late. We had three outstanding issues:-

1. Employee hired after 01/01/2011 - their withholding was not correct.

2. If there was supplemental income in the same paycheck along with regular payment, CT withholding was rediculiously high.It would then drop in the subbsequent payrolls.

3. If employee had additional withholding for CT in IT0210, that was consumed in the total CT withholding and affecting regular withholding for CT.

When there was no solution in sight from either BSI / SAP, we did the unthinkable for benefits of our 2500 CT employees. Created formula in excel spreadsheet using tax tables on the website of DRS-CT, calculated their estimated CT taxes, subtracted their YTD CT tax and divided with remaining pay periods. Put this amount in IT210 as additional withholding for CT. it worked like a charm.

Hope you do not have to go that route. SAP says they have released Note 1643809 u201CTAX: CT tax for Regular and Supplemental wages in same checku201D on Oct 24th. Please apply it and test it out.

They have also been working on hard to fix this issue but just make sure that this Note does not break something else.

Best Wishes.

R

[Former Member]

Hello all,

Just a final posting on this issue. My problem was due to an SAP bug in Note #1634872. SAP released a new version of this note late Friday, and the latest code changes fixed my problem.

If you have already applied note #1634872, I recommend re-applying it with the new version released by SAP on Friday.

Thank you.

Jay Crowley

[former_member53484]

Hi All,

New notes has been released.

1644556: CT additional withholding estimation solution

1634872: TAX: Year to Date Pay Periods Incorrect

[former_member53484]

Hi Jay,

New notes, Is it doing retro?

Thanks

[alicia_robinson]

1644556: CT additional withholding estimation solution -- this note has not been released where I can see it.

This is what I see when I try to view the note - "The requested SAP Note is either in reworking or is released internally only"

[Former Member]

Hi S,

I received feedback from BSI. Please see below. It is as I expected - the problem is that parameter YP=0, so BSI TaxFactory incorrectly thinks that the employee has no YTD pay periods.

Hello Jay,

I have tested the script provided and the significant reduction in CT withholding is a result of the YP:0. It appears the employee has not had any year-to-date pay periods. I have attached the manual calculation for your review to see how TaxFactory determines the withholding. This seems to be something you must consult with SAP to determine why the YP has value of 0 and how to make the change as necessary.

Best Regards,

B'Nai Jackson

Application Specialist,Tier I Support

[Former Member]

Hi S,

Thanks for your thoughts. I checked note 1633367 earlier, however the employee does not have an additional CT amount specified. We have multiple employees impacted - for example one employee has no additional amount, but 3 additional allowaces. Another has no additional amount and no additional allowances. Both are under-withheld for CT tax.

I sent a request to BSI for assistance, but have not heard back yet. Am I right that there could be a problem if parameter YP=0? Shouldn't this be the number of prior YTD pay periods?

Thanks for your help,

Jay Crowley

[former_member182083]

Hello Jay,

Kindly check new note 1633367-TAX: CT SIT effective Aug. 1st - Add. Withholding, this is for additional withholding problem I am not sure whether it solve's your issue also. Have sent the BSI script to BSI support, what is the update you have got from them?

With Regards,

S.Karthik

[Former Member]

Hi Amosha,

Thanks for your thoughts. I agree that the Alternative formula 04-(HIRED ON / AFTER 08/01/2011 FO) gets us closer to the expected result. But I don't think we should need to make this change. None of the employees were hired on or after 8/1. They've all been with the company for several years.

I'm seeing a tax result that is about 50% of previous. So a tax withheld of $130 prior the BSI updates is now $65. Clearly something is not right.

Thanks for the suggestions, though.

Jay Crowley

[Former Member]

try creating W4 effective from 08/01/2011 for one CT employee ( old or new hire any one) with formula 04. And test the payroll. Force retro from 01/01/2011. See if the taxes are getting calculated.

[Former Member]

If the wages are same the tax differences should be between +/- 25 range max between old method and new method.