Local Service Set Up

[huselton1]

Hi. I am having trouble setting up a flat deduction of $1.00 per pay for our PA local services tax. Is the cut off amount $52.00 or $1.00, since I want only $1.00 deducted per pay and up to $52 per year. I am starting to withhold mid year so don't want it to be retroactive. Also the tax office said to use box 16 on the W-2. It won't let me do that. Any help would also be appreciated.

[Paul Mayer]

Hi. I am having trouble setting up a flat deduction of $1.00 per pay for our PA local services tax. Is the cut off amount $52.00 or $1.00, since I want only $1.00 deducted per pay and up to $52 per year. I am starting to withhold mid year so don't want it to be retroactive. Also the tax office said to use box 16 on the W-2. It won't let me do that. Any help would also be appreciated.

Box 16 is used for State wages, tips, etc. not a local tax. Local taxes and wages are shown in boxes 18, 19 and 20.

The local taxes are setup by creating a new tax local tax record and attaching it to each employee. See the Tutorial titled "How to Create Local Tax Records and Use Them" at http://zpay.com/help.

However our logic does not allow you to have a flat amount like $1.00 per pay period so you would need to Set it up but put zero percent and after clicking the "Pay" button calculating everything, you would then enter the one dollar and press the Tab key to calculate the net check and then save the record.

[huselton1]

Hello. OK the problem is..... there are only 2 selections allowed. I use the top one for PA, of course, and the bottom for the local wage tax. Where do I put the Local Service Tax? There are boxes at the left of the screen. Do I use those? Thanks Mr. Mayer for your prompt replies.

[Paul Mayer]

Hello. OK the problem is..... there are only 2 selections allowed. I use the top one for PA, of course, and the bottom for the local wage tax. Where do I put the Local Service Tax? There are boxes at the left of the screen. Do I use those? Thanks Mr. Mayer for your prompt replies.


So I understand that you already have a local tax setup and this is an additional tax now the $1.00 per pay period?

When you say left of screen, I'm not sure what screen you are referring to. But if you already have a local tax, then the only choice left is to create a miscellaneous deduction for a dollar each pay day. And box 14 would be the logical place to put that on the W2 that we support for "other items". I would use LST for "Local Service Tax" in the abbreviation for box 14.

Box 14: Other Tax Information. Your employer may report additional tax information in Box 14. If any amounts are reported, they will have a brief description of what the amounts are for. For example, union dues, employer-paid tuition assistance, health insurance premiums you paid, or after-tax contributions to a retirement plan will be reported here. Some employers report certain state and local taxes in Box 14, such as State Disability Insurance (SDI) premiums, etc.