Payroll State Taxable Earnings issue: We have employees who work most of their hours in states other than their primary State. Here is how Sage will calculate State Taxable Wages:

The data: Employee pay is 15.00 per hour, employee works 40 hours in Kansas, his primary State is Nebraska

States -------------------------------Kansas-----------Nebraska----------Federal
Hours Worked--------------------------40-----------------0-------------------40
Gross Wages--------------------------600.00------------0.00---------------600.00
401(k) 3%-------------------------------0.00------------18.00----------------18.00
HSA $20--------------------------------0.00------------20.00----------------20.00

Net Taxable Wage---------------------600.00---------(38.00)---------------562.00

This is how these earnings will submitted to Aatrix for W-2 processing, negative taxable wages for Nebraska. Even if we change the State for the deduction during payroll edit to the State the employee worked, Sage still process the deductions according to the employees home State. I think the correct calculations should spread tax deferred deductions proportionally to the earnings of each State the employee works.

Has anyone else had this problem and found a workaround?

by: Randy R. | over a year ago | Payroll / Job Cost