Tax Law Change: New York City Nonresident Earnings Tax

Transcription

1 Tax Law Change: New York City Nonresident Earnings Tax Modules Affected: Versions Affected: Payroll Version 6 (software level 7.6c3.2) and Version 7 (8.7c2.6) This document describes the COINS implementation of a recent tax law change that affects residents of New York State who work in New York City. Background...1 Employee File...2 Employee F/M - Main screen...3 Employee F/M - Fed & State screen...3 Employee F/M - Locality screen...4 Enter Time Cards...5 NY Resident/NYC Nonresident...5 NY Resident/NYC Resident...6 NY Nonresident/NYC Nonresident...6 Background Legislation went into effect on July 1, 1999 that eliminates the New York City (NYC) nonresident earnings tax for New York State residents who are not residents of NYC but who earn wages in the city. This document explains how to set up employee records for these employees. This change affects only New York State residents who are not residents of NYC. There was no change to the NYC earnings tax for people who work in NYC and are either NYC residents or residents of states other than New York. 2000, Shaker Computer & Mgmt. Services, Inc. 1 1/17/2000

2 Employee File Information in the Employee File determines whether the NYC earnings tax applies to a given employee for work performed in NYC, as shown below. 1 Effect of employee Home and Locality settings on New York City earnings tax state is NY locality is NYC locality is not NYC NYC - R No NYC state is not NY locality is NYC locality is not NYC NYC - R NYC - N The employee records need to be correct if the tax calculations are to be correct, so you should periodically review the residency information for each employee. To update employee information as needed: 1. Select Payroll from the COINS main menu. 2. In Version 7, enter the number for the desired Payroll Company. 3. Go into Payroll file maintenance. In Version 6, select File Maintenance Menu from the Payroll Menu. In Version 7, select File Maintenance Menu Company from the Payroll Menu. 4. Select the Employee File from the File Maintenance Menu. 1 The work locality defaults to the employee's time card according to the employee's locality Time Card default rule. If the default rule for locality is J (job), the time card locality comes from the job. If the default rule is E (employee), the time card locality comes from the employee's Work Locality. 1/17/2000 2

3 Employee F/M - Main screen 01/04/00 PR - Employee F/M SHAKER Change Employee* COIN, JOHN S. Jr First Name: JOHN Pay Freq(W/B/S/M): W Middle Name: S. Hourly/Salary(H/S): H Last Name/Suff: COIN Jr. Auto Generate(Y/N): N Address: 23 LOUGHBERRY ROAD Birth Date: 09/01/1945 Address: Hire Date: 01/09/1984 City/State: SARATOGA SPRINGS NY Layoff Date: 11/19/1993 Zip/County Code: Termination Date: / / S.S. Number: Term Reason Code* SLOW Phone Number: Rehire Date: 03/07/1994 Job Title: PROJECT MANAGER Active (Y/N)/Pay Cnt: Y 6 Div*/Ctr* Last Date Paid: 12/10/1999 Sex: M Normal Work Hours: Marital Status: M Super: The state on the first screen is part of the employee's mailing address and is not used for PR computations. When you add a new employee, this state is used as the default for the employee's Home State, Default Work State, Workers Comp State, etc. Employee F/M - Fed & State screen 01/04/00 PR - Employee F/M SHAKER Change Employee* COIN, JOHN S. Jr Federal Withholding Information State Withholding Information Number of exemptions: 5 Home State* NY Exempt (Y/N): N Default Work State* NY Extra withhold amount: 0.00 Time Card default rule: J Extra withhold percent: 0.00 Number of exemptions: 5 Federal Filing Status: Number of personal exem: 0 FICA Exempt (Y/N): N State Filing Status: FUTA Exempt (Y/N): N Exempt (Y/N): N EIC Eligible (Y/N): N Extra exemption amount: 0.00 EIC Claimed by Spouse (Y/N): N Extra withhold amount: 0.00 Extra withhold percent: 0.00 Tax distribution method: COINS looks at the Home State to determine whether an employee is a New York State resident. 1/17/2000 3

4 Employee F/M - Locality screen COINS uses the Home Locality to determine whether an employee is a resident of New York City. If this field is blank or contains a locality code other than NYC (e.g., YON), the employee is a NYC nonresident. If this field contains the code NYC, the employee is a New York City resident. 01/04/00 PR - Employee F/M SHAKER Change Employee* COIN, JOHN S. Jr Locality Withholding Information Miscellaneous Information Home Locality* Workers Comp State* Default Work Locality* NYC Workers Comp Code* Time Card default rule: E WC Time Card default rule: # of Local Exemptions: 5 Workers Comp Exempt(Y/N): Local exempt(y/n): N General Liab Exempt(Y/N): Local filing status: SUTA State* Extra local amount: 0.00 SUTA TC default rule: Extra local percent: 0.00 SUTA Exempt (Y/N): Tax Distribution Method: 1 DBL State* DBL TC default rule: DBL exempt(y/n): The locality Time Card default rule controls how COINS determines the locality for work recorded on a given time card. If this is J, the system uses the job's locality for the time card. If this is E, the system uses the employee's Default Work Locality for the time card. 1/17/2000 4

5 Enter Time Cards The effect of the Employee File settings can be seen when you enter time cards. Three sample Add Time Card screens follow, all of which reflect work performed in New York City. Each time card uses the same job. This job has NYC as its Locality in the Job File. The Locality time card default rule is J for all three employees. This means that the system looks at the job for the locality for each time card. NY Resident/NYC Nonresident Home State = NY and Home Locality is blank 01/04/00 PR - Time Card Entry SHAKER Add Batch: Employee Number* COIN, JOHN S. Jr. Check Number: 1 Transaction #* Earnings Cat* HE Job number* PICOTTE OFFICE TOWERS Phase* Cost Code* Rate Hours Gross Work Order*/Work Type: Reg: State* NY Ovt: Locality* Dbl: SUTA State* / Trade* NY PM ========= ========= Equip (CO/CH/NO): NO TOTALS: Union* Skill Level* Reimbursable Amt: 0.00 Labor Category* PM Reimbursable G/L Account* 2150 Cert (Y/N) / Super: Y Workers Comp* 8810 Days Worked:.00 Date / Bank* 01/04/00 sn No earnings tax applies to the employee, who is a resident of NY (Home State = NY) but not a resident of NYC. Since the system knows that there is no NYC earnings tax for this employee, it leaves the Locality fields on the time card empty. 1/17/2000 5

6 NY Resident/NYC Resident Home State = NY and Home Locality = NYC 01/04/00 PR - Time Card Entry SHAKER Add Batch: Employee Number* SANDIAGO, LUIS Check Number: 1 Transaction #* Earnings Cat* HE Job number* PICOTTE OFFICE TOWERS Phase* Cost Code* Rate Hours Gross Work Order*/Work Type: Reg: State* NY Ovt: Locality* NYC R Dbl: SUTA State* / Trade* NY HV ========= ========= Equip (CO/CH/NO): NO TOTALS: Union* Skill Level* A1 Reimbursable Amt: 0.00 Labor Category* HVAC Reimbursable G/L Account* 2150 Cert (Y/N) / Super: Y clark Workers Comp* 5538 Days Worked:.00 Date / Bank* 01/04/00 FN This employee is a resident of NY (Home State = NY) and a resident of NYC (Home Locality = NYC). The system places NYC and R (resident) in the Locality fields on the time card. NY Nonresident/NYC Nonresident Home State = VT and Home Locality is blank 01/04/00 PR - Time Card Entry SHAKER Add Batch: Employee Number* SMALL, FRANK Check Number: 1 Transaction #* Earnings Cat* HE Job number* PICOTTE OFFICE TOWERS Phase* Cost Code* Rate Hours Gross Work Order*/Work Type: Reg: State* VT Ovt: Locality* NYC N Dbl: SUTA State* / Trade* VT EL ========= ========= Equip (CO/CH/NO): NO TOTALS: Union* EL290 Skill Level* J Reimbursable Amt: 0.00 Labor Category* EL Reimbursable G/L Account* 2150 Cert (Y/N) / Super: Y clark Workers Comp* 5190 Days Worked:.00 Date / Bank* 01/04/00 FN This employee is not a resident of New York State. Since the work is performed in NYC, the system knows that NYC Nonresident Earnings Tax applies to the employee. It therefore places NYC and N (nonresident) in the Locality fields on the time card. 1/17/2000 6