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Former Member
Oct 17, 2011 at 11:12 AM

Config for Separate Aggregation method

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Hi All,

As per the IRS Guidelines for Supplemental Wgae Types which is as mentioned below-

Supplemental wages identified separately from regular wages. If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method depends partly on whether you withhold income tax from your employee's regular wages.

1. If you withheld income tax from an employee's regular wages in the current or immediately preceding calendar year, you can use one of the following methods for the supplemental wages.

a. Withhold a flat 25% (no other percentage allowed).

b. If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. If there are no concurrently paid regular wages, add the supplemental wages to alternatively, either the regular wages paid or to be paid for the current payroll period or the regular wages paid for the preceding payroll period. Figure theincome tax withholding as if the total of the regular wages and supplemental wages is a single payment. Subtract the taxwithheld from the regular wages. Withhold the remaining tax from the supplemental wages. If there were other payments of supplemental wages paid during the payroll period made before the current payment of supplemental wages, aggregate all the payments of supplemental wages paid during the payroll period with the regular wages paid during the payroll period, calculate the tax on the total, subtract the tax already withheld from the regular wages and the previous supplemental wage payments, *and withhold the remaining tax. *

If we set the Processing class 68 for a Wage Type as 2 then it is Withholding @ flat 25% as mentioned in above A Clause.

WHAT WE NEED TO DO SO THAT IT WORKS AS PER THE DEFINITION MENTIONED IN B Clause?