E1/WS: 07: Vertex 4.5.3 May 2024 Monthly Update - Maryland County Tiered Tax (Doc ID 3030480.1)

Last updated on JUNE 24, 2024

Applies to:

Symptoms

Change to the Maryland county tiered tax rate tables.

Previously, Maryland counties set a single flat income tax rate for all taxpayers. Then the Local Tax Relief Act of 2021 enabled the use of tiered income tax rates at the local level to provide tax relief for certain wage brackets.
In 2023, Anne Arundel and Frederick were the first two counties to implement a tiered tax table at the local level. These rates were further updated in 2024 to reflect additional tiers.
The existing state withholding tables contain only a single county tax rate. Because of the new multi-level rates, the use of the current tables does not provide customers with the flexibility of setting the withholding rate based on known parameters, such as income and filing status.
To accommodate the new tiered tax rates and more precise withholding, Vertex now supports the actual county tax rates for all counties in calculations, rather than relying on the next highest rate from the state-published tables. The state and county withholding taxes are now calculated using separate (not combined) withholding tables.
Considerations
* The state and county rates are now calculated separately, though these changes to the calculation are internal only.
* The calculation engine will continue to return a combined state and local tax on the State Withholding Tax ID.
* Be aware of slight differences in the tax calculations in counties where the actual county rate differs from the county rate used in the published withholding table. In these counties, withholding calculations will generally be slightly lower than before because the actual rate being used is less than the next highest rate used in the published table.
* This solution is effective January 1, 2024.

State-only withholding tables
The Payroll calculation engine now uses the following State-only Withholding Tables to calculate the State Withholding Tax

Cause

My Oracle Support provides customers with access to over a million knowledge articles and a vibrant support community of peers and Oracle experts.