This appendix contains the following topic:
Calculating State Withholding Tax
This appendix explains the calculations for State Withholding Tax. There are three options for the Calculation basis field (see the Calculation basis field of Tax tables entry for state codes), from the state tax table:
| • | D = Directly on earnings |
| • | L = Ladder steps on earnings |
| • | P = Percent of Federal tax |
This appendix explains these:
If you enter D = Directly on earnings or L = Ladder steps on earnings as the calculation basis SWT is calculated in the following manner:
| • | Added SWT: |
If Added SWT calculation method is by percentage, this equals:
(Supplemental Earnings x suppl earn w/h %) +
([SWT Gross Wages - gross wage cut-off amt] x
employee added SWT %)
with the restriction that [SWT Gross Wages - gross wage cut-off amt] may not be negative.
If Added SWT calculation method is simply an amount, this equals:
(Supplemental Earnings x suppl earn w/h %) + employee added SWT $
| • | State W/H Tax (for the period): |
([Annual Tax from Table using Tax Table Income - State Cr $] ¸
Yearly Pay Frequency Factor) + Added SWT
If Added SWT calculation method is by surcharge percentage:
Total State W/H tax = State W/H tax (for the period) + [State W/H tax (for the period) x employee Added SWT surcharge %]
| • | Tax Table Income: |
([SWT Gross Work Amount - Adjustment for FWT - Adjustment for social security - Adjustment for medicare] x Yearly pay frequency factor) - Total exemption amount - Standard deduction - Additional deduction
| • | State CR $: |
If employee state cr $ is an amount, this equals:
employee state cr $
If employee state cr $ is a percentage rate, this equals:
annual tax from table x employee state cr $ ¸ 100
| • | SWT gross work amount: |
SWT base work amount x base gross pct
| • | Adjustment for FWT: |
FWT w/h x pct of FWT to adjust [not to exceed max FWT adjustment]
| • | Adjustment for social security: |
Social security w/h x pct of social security to adjust [not to exceed max social security adjustment]
| • | Adjustment for medicare: |
Medicare w/h x pct of medicare to adjust [not to exceed max medicare adjustment]
| • | Total exemption amount: |
Employee exempt SWT $ + employee exempt SWT # x state w/h allowance amt
| • | Standard deduction: |
The larger of:
min standard adjustment
or
(SWT base work amount x yearly pay frequency factor x standard adj pct of gross pay) [not to exceed max standard adjustment]
| • | Additional deduction: |
The larger of
zero
or
(additional adjustment percent x [SWT base work amount x yearly pay frequency factor - # employee SWT exempt x additional adjustment exemption value - additional adjustment base deduction]) ¸ 100
| • | SWT base work amount: |
SWT gross wages up to gross wage cut-off amt
If you enter P = Percent of Federal gross as the calculation basis, SWT is calculated in the following manner:
| • | Added SWT: |
If added SWT calculation method is by percentage:
(supplemental earnings x suppl earn w/h %) + ([the larger of zero or{SWT gross wages - gross wage cut-off amt}] x employee added SWT %)
If Added SWT calculation method is simply an amount:
(supplemental earnings x suppl earn w/h %) + employee added SWT $
| • | State w/h tax (for the period): |
tax from table using tax table income + added SWT
Note: tax from table is already for the period
If added SWT calculation method is by surcharge percentage:
total state w/h tax = state w/h tax (for the period) + [state w/h tax (for the period) x employee added SWT surcharge %
| • | Tax table income: |
FWT w/h