E1: 07: AL,IA,MO, & OR State Income Tax Understated-System Not Considering Federal W4 Dependent Amount (Doc ID 2789248.1)

Last updated on APRIL 09, 2023

Applies to:

Symptoms

State Income tax is understated due to system not taking Federal W4 claim exemption into consideration. When using the Total Claim Dependent Amount from the Federal W4 (EE tax overrides), the calculation for the State withholding is incorrect for the following states: Alabama, Iowa, Missouri, and Oregon.

Steps:

1. Set up AL, IA, MO or OR employee for test purposes.
2. Run Interim payment for 80 hours on EE from step 1.
3. Review pay stub and note state tax calculation amount.
4. Review Vertex Before and After report and see that the system subtracts the total annual federal tax instead of the total annual federal tax minus the W4 Total Claim Dependent amount to derive the state income tax.

Cause

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