Overriding Employee Tax Calculation

Use the Tax Calculation Overrides form to temporarily override the way the system calculates taxes for an employee.

Working with Income Tax Overrides

Using the Income Tax Overrides panel, you can:

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Add a fixed amount to the amount already withheld.

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Block the tax withholding altogether.

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Indicate a new percentage rate to be used in calculating the tax.

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Enter a new fixed amount.

To override income taxes for an employee:

Enter the Employee by either entering the name, Social Security Number, or ID to display a pop-up list of matching employee records. You can also click the field label or press Ctrl+Enter with your cursor in this field to open the search window.

Enter the Tax Auth ID to which this tax calculation override applies. The Authority Name displays.

Select the Override Type to use in the override for this tax authority:

Override Type	Description
Add to Amount Withheld	Increases the employee's income tax withholding by a fixed Amount.
Percentage Rate	Withholds a percentage Amount of net taxable pay.
Fixed Amount	Withholds the Amount.
Block Withholding	Blocks withholding of income tax from the employee's pay.
Supplemental Tax Rate	Withholds a percentage Amount of supplemental pay.
Supplemental Tax Amount	Withholds a fixed Amount of supplemental pay.
Supplemental Block	Blocks withholding from supplemental pay.

Enter the override Amount that corresponds with the Override Type. If you blocked withholding, leave this field blank.

Enter the Starting Pay Date when this temporary tax override goes into effect. The tax override applies to payroll batches if the pay date falls within the date range. For the tax override to work, this field is mandatory.

Enter the Ending Pay Date when this temporary tax override is no longer in effect. For the tax override to work, this field is mandatory.

Select the Status to control how the system handles overrides during payroll processing:

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Active (default): Processes overrides as they were originally done.

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Inactive: Ignores overrides during payroll processing. (You can later reactivate an inactive override by changing this status.)

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Onetime: Applies the override to one payroll processed within the entered date range.

Note: After a payroll processes with the Status set to Onetime, the override status changes to Inactive and the voucher number displays in the Voucher field. (You cannot edit or reactivate a onetime override after it is used. However, you can enter a new override for the same tax authority.)

Repeat for each tax authority.

Set up any miscellaneous overrides as needed. Otherwise, click Save.

Miscellaneous Overrides

Depending on the entries you make in the Miscellaneous Overrides panel, different fields display.

Note: You cannot use the Weeks In Pay Period method if the employee uses the federal cumulative method.

WARNING: Do not use the Tax Options field unless advised to do so by the PrismHR Customer Support Team.

To set up miscellaneous tax overrides:

First, make sure you have selected the appropriate employee on the Tax Calculation Overrides form.

Enter the Weeks in Pay Period to use when calculating taxes on the selected voucher types. Enter the other values as needed:

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Enter the From Date when the tax override goes into effect.

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Enter the To Date through which this tax override is active.

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In For Voucher Types, specify the voucher types to which overrides apply: Regular, Supplemental, or Vacation.

Select Yes in the Suppress Local Tax field to suppress the withholding of all local taxes for this employee. Enter the other values as needed:

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Select the Local Tax Type to suppress.

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Enter the Thru Pay Date when the system should stop suppressing the local tax. If you leave this field blank, the tax is always suppressed.

Important! If you used the Tax Calculation Overrides form in the past for an employee it is possible that you need to delete "phantom" data. You must select Delete to remove these records. Confirmation that the system successfully deleted the record occurs when no Tax Calculation Override on File message exists. Going forward, when you create a new override record, selecting an option from the Suppress Local Tax and Courtesy Wthld PA E.I.T fields' drop-down menus prevents the system from creating "phantom" data.

Select Suppress Work State Tax to suppress state income tax withholding in the state where the employee works.

Note: Enter the Thru Pay Date to suppress state income tax withholding. If you leave this field blank, the tax suppression will not stop.

Select Yes in the Courtesy Wthld PA E.I.T field to force the system to withhold local resident-based Earned Income Tax (EIT).

Note: By default, if an employee lives in but works outside of Pennsylvania, the system does not withhold local resident-based Earned Income Tax.

Enter any special Tax Options, if required. Do not enter a value in this field unless specifically you are instructed to do so by PrismHR Customer Support.

Click Save.

Actions Menu

You can access other information and settings using the Actions menu.

Viewing the Audit Log

Suppressing Taxes

Suppressing Tax Calculation