EPY: The Calculation of Federal Taxable Wages Is Incorrect for Non-resident Alien With Supplemental Income on the Check (Doc ID 3001942.1)

Last updated on APRIL 11, 2024

Applies to:

Symptoms

For a specific scenario that occurred in the customer's production environment, the taxable gross calculation for federal tax withholding seems incorrect because it is not the same amount as the taxable gross that the system calculated for Massachusetts withholding.

The data scenario is described below
-Employee Federal Tax Data: Form Version W-4 2020 or Later, Special Tax Withholding Status of Nonresident Alien
-Employee Tax Treaty: County ITA, Treaty ID 11064, Treaty in effect during the pay period
-Employee State Tax Data: Massachusetts, Special Tax Withholding Status of Nonresident Alien (Fed Rules)
-Paycheck contained 2 earnings: REG (with a 1042-S Income Code) and another earnings code configured with Tax Method Supplemental and no 1042-S Income Code)



Steps to Reproduce

1. Setup Employee Tax Data to use the Form Version W-4 2020 or Later, with Special Tax Withholding Status set to Nonresident Alien (Payroll for North America > Employee Pay Data USA > Tax Information > Update Employee Tax Data)
  - Employee Tax Treaty: County ITA, Treaty ID 11064, Treaty in effect during the pay period
  - Employee State Tax Data: Massachusetts, Special Tax Withholding Status of Nonresident Alien (Fed Rules)
2. Create Paylines (Payroll for North America > Payroll Processing USA > Create and Load Paysheets > Create Paysheets)
  - Monthly Employee
3. Update paysheets to set REG (with a 1042-S Income Code) and another earnings code configured with Tax Method Supplemental and no 1042-S Income Code)
  - Payroll for North America > Payroll Processing USA > Update Paysheets > By Payline
4. Calculate Pay (Payroll for North America > Payroll Processing USA > Produce Payroll > Calculate Payroll)
5. Review Paycheck (Payroll for North America > Payroll Processing USA > Produce Payroll > Review Paycheck)
  - Note that the Federal Tax Withholding does not match the MA State Tax Withholding

 

Changes

Cause

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