Incorrect Federal Withholding Tax Calculation for 2020 W4 with BSI TaxFactory 11

[former_member60779]

We are currently working on migration to BSI TaxFactory 11. We have applied support packs to our T08 SAP instance and have installed BSI TaxFactory 11. We are currently underway with payroll testing. We processed a pay period in our alt-dev environment in parallel with our production environment in order to validate that Net Pay is not impacted by the support packs or the TF11 upgrade. However, I have found that the majority of EE's who have a new W4 submitted on or after 01/01/2020 are showing incorrect calculations for the /401 Federal Withholding tax in the alt-dev environment.

Federal WH for these EE's in alt-dev is higher than what was deducted for the same taxable income in production. I have realized that the Federal WH taxes in alt-dev for these individuals have been calculated without taking the standard deduction into account, which increases their overall taxable income, and for many, places them in a higher tax bracket (we are using the percentage method for tax calculations). I have processed batch tests in the BSI TF10 and BSI TF11 web clients and confirmed that they are both producing the correct Federal WH tax calculation results. However SAP alt-dev is not deducting the correct amount when payroll is processed.

I'm hoping to get answer to the following questions:

1. In our alt-dev environment (where support packs and BSI TF11 are installed), why are Federal WH taxes being calculated without the standard deduction being taken?
2. Is there a configuration item that needs to be done to turn on the standard deduction feature in SAP?
3. Why does SAP not read the output from BSI (which contains the Calculated Tax amount for each tax type) and use this in the payroll results?

Thanks so much!

[jahnavi_kavuru]

Hi,

We have the same issue. Did you find any solution, If so would you please share? Federal taxes are being calculated at single and zero and in old method as opposed to 2020 W4 information after applying BSI 11. In our case, output from BSI itself seems to be incorrect. However I did find a change in BSI messages in USTAX for those employees. While in BSI 10, employee status shows as '0', with BSI 11, employee status in USTAX processing shows as '2'. Also, BSI message displays as correct marital status not being used.Are we missing any configuration steps? There are no data changes.

Thank you .

[alicia_robinson]

Just a curious question.....

If you made changes to table T5UTK for the marital statuses in your prod system - are these same changes in your alt-dev system?

We have not started with testing for BSI 11 yet so curious if this is your issue or it's something SAP related with the changes around the FED W-4.

[former_member60779]

jahnavi.kavuru SAP has released notes that should fix the withholding tax issue. Please refer to this SAP post for more information: https://blogs.sap.com/2020/04/03/w-4-state-withholding-tax-calculation-2020-based-on-the-state-or-st...

Thanks!

Emily

[DuaneCornforth]

Emily,

I know this original post is over a year old. I am seeing a very similar issue in testing a version 11 payroll tax calc. The V11 results are deducting a higher amounts then our V10 results. I am sure you received an answer on your standard deduction question. Do you remember what that was now? Thanks.

Duane