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EPY: Incorrect KY Local Taxable Wages in Specific Scenario (Doc ID 653859.1)

Last updated on NOVEMBER 23, 2019

Applies to:

PeopleSoft Enterprise HCM Payroll for North America - Version 8.8 SP1 and later
Information in this document applies to any platform.

Symptoms


<BUG:11404020>  delivered in tax update 07-A, addressed a very specific scenario with  local taxes with an annual limit. Given all the following condtions, local tax was refunded in error:
1.  Employee has a local tax that has a maximum (i.e. 015A for Kentucky )
2.  Employee has met the maximum local tax
3.  Employee is paid an earnings that is set up to calculate taxable gross for FWT and LWT but NOT withhold taxes.

With this fix applied, local taxes are not being refunded, but there is a new issue with taxable gross and no limit gross. Boone County does have a unique requirement to report the NO LIMIT GROSS for quarterly reports and W-2 reporting (instead of the TAXABLE GROSS) even though there is a maximum tax imposed. Boone County is the only local to impose this requirement; all the other locals require the TAXABLE GROSS for reporting.

The system correctly calculates Taxable Gross Wages and withholds KY local tax and stops the withholding when the limit is reached.  However, on subsequent payruns if the ONLY earnings that are paid are earnings that are subject to tax but do no withhold for FWT or LWT,  the system begins to track Taxable Gross wages again and when payroll is confirmed adds the amount to the Tax Balance accumulators.

Cause

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In this Document
Symptoms
Cause
Solution
References

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