Establishing Employee Tax Information

Select the Override Type to use when calculating the amount to withhold for income taxes paid to the federal government.

Enter the Override Amount to use in conjunction with the Override Type.

This field is unchecked by default. Check this box if the employee is exempt from FICA taxes.

Enter or select the FICA Exempt Thru Date to stop the employee's FICA Exempt taxation from calculating. Note the following when enabling this field:

This field is unchecked by default. Check this box if the employee has filed Form 4029. Members of recognized religious groups file Form 4029 to apply for exemption from Social Security and Medicare taxes.

This field is unchecked by default. Check this box to calculate railroad taxes (and suppress Social Security and Medicare taxes) for the employee.

Note:   Railroad taxes are not reported on Form 941 and are not posted to the Employer 941 Register. These taxes are included in the MasterTax RTS file. They need to be reported on the Form CT-1 Employer’s Annual Railroad Retirement Tax Return. PrismHR and MasterTax do not currently support the Form CT-1.

This field is unchecked by default. Check this box if the employee has submitted Form W-8 BEN or Form W-8 BEN-E. This setting is applied to tax reports. Tax suppression is managed using the Tax Exemption field on the Employee Types form.

Select Federal W-4 Filed if the employee has filed that application.

Enter the Federal W-4 Year when the form was filed.

If necessary, enter or update the number of Federal Allowances (pre 2020) (exemptions) claimed by the employee. This applies to tax years prior to 2020.

Note:  The system calculates federal withholding amounts for taxes using rates stored in the tax tables. If appropriate, you can override the default calculation using the Override Type and Override Amount fields. For example, some employees want to increase their income tax withholding by a fixed amount. You would select Add To Withholding and then enter the amount to add to the calculated amount. (Note that the system does not add this additional amount to income tax calculated on supplemental earnings.)

Select the Alternative Calculation Code to use to calculate income for the state. This applies only to New Jersey, Arizona, and Arkansas.

From 1997 until 2021, this field was only used for employees subject to Mississippi taxes. In 2022, this field was extended for use in Colorado tax calculation with no change to the Mississippi functionality.

Mississippi: Mississippi employees must provide their state tax exemption claims on a separate form. Enter that exemption amount here.

Colorado: Enter the annual withholding allowance claimed by the employee.

Indiana: For the state of Indiana, the system can now capture the exemption for "adopted qualifying dependent" on the new hire form. When processing the Form WH-4 (Employee's Withholding Exemption and County Status Certificate) for the state of Indiana through Onboarding or Employee Portal, the updated Form WH-4 is now available and any entry for adopted qualifying dependents will be reflected in PrismHR. For the state of Indiana, this value will be stored here. This value does not currently factor in this employees tax withholding amount. Support for the tax calculation to include this exemption amount will be included in a future release.

This field is only required for employees subject to Mississippi taxes. Enter the supplemental exemption amount claimed by the employee.

Select the Override Type to use when calculating income taxes for the state, if appropriate.

Enter the Override Amount to use in conjunction with the Override Type.

Select whether the employee has Multiple Jobs and enter their Dependents, Other Income, and Deductions values. These are entered on their state W-4 and correspond to the federal-level values in the table above (see Maintaining Employee Federal Tax Information).

Select Yes from the Non-Res Cert Filed drop-down if the employee has filed a certificate of non-residency for this state. A certificate of non-residency is a document filed by an employee covered by a reciprocal agreement certifying his or her eligibility for exemption from withholding in the state in which he or she performs services. If you select No, the system does not activate reciprocity.

Enter the Non-Res. Cert. Year when this non-residential certification was filed.

Select Yes from the W-4 Filed drop-down if a State Employee Withholding Allowance Certificate is on file for this employee.

Select one of the following options:

Select one of the following options:

Select Electronic Form W-2 if the employee receives an electronic Form W-2 rather than a paper form. When an employee completes the Elect W-2 form (Elect Electronic W-2s) either through Employee Portal or Onboarding, the Electronic Form W-2 field is automatically updated here.

If the employee is a cross-hire, checking or clearing this field also checks or clears the same field for all clients for which the employee works.

Select Electronic 1095C Form if the employee elected to participate in the early electronic Form 1095-C program. The employee can log in to Employee Portal (EP) and find their 1095-C using the menu item before March 2. Employees who do not elect to participate in the program should receive it in the mail, and can access it online starting on March 2.

See Giving Employees Access to Form 1095-C.

Enter the Vertex School District code (must be numeric) for the applicable school district. (See the codes in the Vertex Calculation Guide.)

Select S-Corp Principal if this employee is a principal officer of an S Corporation according to the IRS definition.