EPY: Adjust 1042 Gross On Deduction Does Not Work Correctly With Taxable Gross Component ID
(Doc ID 2540392.1)
Last updated on JULY 29, 2019
Applies to:PeopleSoft Enterprise HCM Payroll for North America - Version 9.2 and later
Information in this document applies to any platform.
Adjust 1042 Gross on Deduction does not work correctly with Taxable Gross Component ID
We have an employee who is a Non-resident alien who is on treaty and has not yet reached his treaty limit.
He receives a check that includes before-tax deductions (with no taxable gross component ID), before tax deductions (with a taxable gross component ID), and a taxable benefit.
The taxable gross component ID adds to State (MA) taxable gross.
When the employee is paid, he incorrectly receives a MA (W-2) Withholding taxable gross of $278.15. This corresponds to his retirement deductions (ORPT64 and RTTIA2) which have a taxable gross component ID = STATE. This should instead have added to his 1042 taxable gross.
This causes reconciliation issues -- now the employee has an incorrect W-2 taxable gross.
The issue can be reproduced at will with the following steps:
1. Navigate to "Set Up HCM>Product Related>Payroll for North America>Federal/State Taxes>Taxable Gross Definition Table" and indicate for the State "MA" a taxable gross component as "STATE" for Withholding. It adds to gross.
2. Setup a before tax general deduction that has "STATE" associated for the taxable gross component id and indicate "Adj 1042 Gross"
3. Setup the employee as a Non Resident Alien
4. Enroll him into that general deduction
5. Create a paysheets and run a payroll calculation
6. Review paycheck taxes shows a taxable gross for withholding for the deduction code that had the taxable gross component id "STATE" instead of the 1042 taxable gross.
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