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Distribution Codes

Federal Taxes Tabs

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Federal Taxes - Distribution Tab

Access this tab using Maintain>Payroll>Federal Taxes.

Use this tab to specify how to distribute the employer's portion of the federal tax expense. Choose to have federal tax amounts distributed the same way the employee's earnings are distributed; distribution can be limited to the earnings used to calculate the federal tax; or distribute federal tax expense using the specific Distribution Code entered on this tab.

 

Distribution of the Employer-Paid Federal Tax Expense Should: Select one of the three options (Follow Earnings on Timesheet, Follow Earnings Used to Calculate the Tax, or Use Distribution Code) for the system to distribute employer paid federal taxes. If Use Distribution Code is selected, enter an existing Distribution Code.

  • Click Distribution Codes Information to open the Maintain>Payroll>Distribution Codes form, where you can create or modify a distribution code. Each time this button is selected, a new Distribution Codes form is opened.
  • Many grants and contracts allow federal taxes to be charged directly to the funding source. In this case, choose Follow Earnings on Timesheet or Follow Earnings Used to Calculate the Tax. The employer's portion of the federal taxes is distributed to the same Account Codes (Fund and any other account segments except General Ledger) as the employee's earnings. In other words, the Distribution Codes used to distribute the employee's earnings are also used to distribute the federal tax. If more than one Distribution Code is used to distribute the employee's earnings, the federal taxes are distributed based upon a weighted average of the distributed earnings.
  • If there are one or more funding sources to which you do not distribute federal taxes (because you may have a negotiated rate or federal taxes are simply disallowed), you can choose the Use Distribution Code Distribution method. For this method, specify the exact Distribution Code to distribute the federal taxes, which may be entirely or partially distributed to overhead. If a Distribution Code is specified on this tab, it should be an existing Distribution Code.
  • This only applies to employer-paid taxes, such as FUTA, Social Security, and Medicare.