EPY: 1042 Eligible Earnings Along With Non-treaty Eligible Earnings Can Create Incorrect Taxable Grosses in Certain Scenarios

(Doc ID 2029006.1)

Last updated on JANUARY 05, 2018

Applies to:

PeopleSoft Enterprise HCM Payroll for North America - Version 9.1 and later
Information in this document applies to any platform.


Scenario:  An employee covered by a treaty with $2,916.67 in reg earnings (Income Code 18) and a $100 Healthy-living incentive payment (Tax Method of Supplemental) which is not covered by any of the Treaty's income codes. 

Calculated results:  The employee gets a Federal and State W-2 Taxable gross of $100 and tax is withheld from the paycheck.  However, if there is a pretax deduction, it will 1) prorate a portion of it from the federal and state taxable grosses and 2) prorates a different amount for Federal and for State.




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