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Multiple Local Tax Withholdings

  • 1.  Multiple Local Tax Withholdings

    Posted Jul 17, 2019 09:52 AM
    ​I'm fairly new to the GPUG community.  I read the posts everyday, but this is the first time I've posted.  I run payroll for our organization & am more of a functional user, rather than behind the scenes IT.  Our organization recently upgraded to GP 2018, but I've been running payroll through GP for 10 years.  In the State of Ohio, most individuals have to pay workplace tax to the locality they are working & residence tax to the locality they reside.  Some residential cities offer a percentage of credit for workplace tax already paid, but that percentage is not uniform throughout the State.  The State of Ohio mandates employers withhold for workplace tax, but does not mandate we withhold for residence tax.  For example:

    If someone works in the City of Cleveland, we are mandated to withhold 2.5% of gross wages & remit those withholdings to the city of Cleveland.
    If that same person lives in the City of Euclid, that individual is mandated to remit 2.85% residence tax to the city of Euclid.  The City of Euclid offers a 100% credit for all workplace tax withheld.  Meaning, the worker would only owe .35% of gross wages to the City of Euclid since 2.5% was paid to their workplace city of Cleveland.  The situation gets a little stickier if the residence city offers less than a 100% credit for workplace tax.  Some cities only offer 50% or less.

    Currently we are only withholding for workplace tax.  I'm trying to figure out if there is a way for GP to handle withholding for more than 1 locality at different rates without having to set-up an infinite number of "if, then" local tax withholding codes.  Also if there is a designation for the type of tax being withheld (workplace or residence).

    Are there other States that have local withholdings similar to Ohio?  Is GP able to handle multiple withholdings using the above example & if so, how were you able to set that up?

    Any insight or options would be greatly appreciated!

    #HRandPayroll

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    Heather Winton
    Accounting Specialist
    SAW, Inc.
    Cleveland OH
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  • 2.  RE: Multiple Local Tax Withholdings

    TOP CONTRIBUTOR
    Posted 26 days ago
    Hi Heather,

    I live in Ohio and have dealt with this issue. The rule is that you withhold based on where the employee works. So in the example you described, the employee is responsible to make estimated payments to Euclid for the difference. As a favor to them, you could setup Euclid to "automatically calculate" and make it .35%. Alternatively, you could purchase a third-party add-in product to handle multiple local taxes per transaction.

    Hope that helps.


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    Mark Wiley
    Dynamics Credentialed Professional
    Senior Solutions Architect
    GraVoc
    Ohio Office
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  • 3.  RE: Multiple Local Tax Withholdings

    Posted 7 days ago
    ​Mark,

    Thanks for the reply.  Our company works in multiple Ohio cities, including Euclid, so your suggestion would not work.  I had a feeling in the box GP could not handle multiple local withholdings the way we needed it to without a 3rd party software, but I figured I'd put it out to the group & see if anyone else had any suggestions.

    I appreciate you confirming my original thought,
    Heather

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    Heather Winton
    Accounting Specialist
    SAW, Inc.
    Cleveland OH
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    Conference-GPUG_200x200


  • 4.  RE: Multiple Local Tax Withholdings

    TOP CONTRIBUTOR
    Posted 6 days ago
    Hi @Heather Winton,

    Integrity Data has a non-published product that may be able to help address this issue for you. Please feel free to reach out to @Dan Doolin for more information, if interested.

    All the best!​​

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    Tom Franz, CPP
    (217) 689-4658 - tfranz@integrity-data.com
    Director of Client Services
    Integrity Data
    Lincoln IL
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    Conference-GPUG_200x200


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