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Distribution Codes

State Taxes Tabs

Payroll Checklists

Payroll FAQs

State Taxes - State Tab

Access this tab using Maintain>Payroll>State Taxes.

Use this form to specify how the system is to account for the state tax withheld from employees' checks. This not only accommodates the employee's state tax withholding, but also the employer-paid state tax expense. Also, you can specify the federal unemployment tax credit rate information.

On this tab, set up codes for the states in which employees are subject to tax. Also, specify which taxes are included: state withholding and/or state unemployment. A calculation method is also required for State Unemployment Tax. And finally, enter the organization's Employer Tax ID number.

 

Code: Enter a two-character state or territory code.

State Withholding State Withholding Tax, Tax Account ID: Select State Withholding Tax, if applicable, and enter the SWT tax account ID number for the selected state.

State Unemployment State Unemployment Tax, Tax Account ID, Calculation Method: Select State Unemployment Tax, if applicable. Enter the SUTA tax account ID number for the selected state and a Calculation Method of Current or Year-to-Date (historical) must be selected.

  • 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.
  • Each applicable state's withholding tables do not have to be entered. These are built into the system. Once a state has been entered, the system automatically accesses that state's tax tables.
  • Note that once a particular state has been activated for either state withholding and/or state unemployment, this state must be included on the employee's Maintain>Payroll>Employee Information form to make it applicable for that employee.
  • If the State Withholding Tax box is selected, a liability account is required on the Tax tab. If the State Unemployment box is selected, the following are required on the Tax tab:
    • Expense Account (if Employer is selected),
    • Liability Account (if Employer and/or Employee are selected),
    • Maximum Annual Subject Wages for the Employer (if Employer is selected), or Maximum Annual Subject Wages for the Employee (if Employee is selected), and
    • Percent of Wages for the Employer (if Employer is selected), or Percent of Wages for the Employee (if Employee is selected).
  • If your organization is not subject to SUTA and your state does not require SUTA reporting, then clear the State Unemployment Tax check box. If your organization is not subject to SUTA but your state does require SUTA reporting, select the State Unemployment Tax check box, then enter a percentage of "0" in the Percentage of Wages box on the Tax tab. In both cases, the amount of FUTA will be calculated at 6.0%. Otherwise, FUTA will be calculated at .6%.
  • Select a calculation method of current to allow for mid-year rate changes. Alternatively, select year-to-date to average the history of the SUTA tax calculated. With this method, if there is a rate change for SUTA, the increase or decrease is averaged year-to-date.