E1: 07: 125 DBAs Not Being Excluded for a Supplemental Pay Type and with a 9 Digit Work Tax Area (Doc ID 2912160.1)

Last updated on NOVEMBER 29, 2022

Applies to:

Symptoms

An employee is a resident of NC (34). The employee has Pre-Tax Deduction type 125 DBAs. The employee works in another state VA (478000650) and
receives regular and supplemental pay (pay method B). The employee works in NC (341412855) and receives regular pay. When calculating tax the full excludable of the Pre-Tax Deduction type 125 DBAs is not considered for the resident of NC (34) and Federal.

Steps:
1. Add an employee in P0801 and set up the employee Tax Area (Work) 341412855, Tax Area (Residence) 341330000.
2. In DBA Instructions P050181 add DBAs that are Pre-Tax Deduction type 125 DBAs.
3. Setup a Supplemental Pay for Pay Type with method B in P059116.
4. Test 1. Add an Interim P07210I/P070701 for the employee who works in tax area 478000650 and receives regular time and supplemental pay for this tax area. They also have regular time in tax area 341412855. 3 125 DBA’s that
total 39.56. Notice the Tax Detail – the full amount of the 125 DBA is not within the Excludable amount.
5. Test 2 Change sequence Interim entry in grid row. Regular time in tax area 341412855 is first. Then regular time and supplemental pay in tax area 478000650. Notice the Tax Detail – the full 39.56 amount of the 125 DBA is within the Excludable amount.
6. Test 3 - Redo Test 1 with the same sequence but change the work tax area from 9 digit to 2 digit on the supplemental pay. Tax Detail – the full 39.56 amount of the 125 DBA is within the Excludable amount

Cause

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