Nebraska State Tax Routine (NETX)

The Iowa State Tax Special Routine Processing utilizes the following steps:

Line 1	Multiply the employee’s gross wages for the current payroll period by the number of payroll periods in a year to obtain their Annualized Gross Income (GI).
Line 2	Determine the employee’s Annual Exemption Amount*.
Line 3	Determine the employee’s Allowances*.
Line 4	Multiply Line 2 by Line 3.
Line 5	Determine the Taxable Amount by subtracting Line 1 from Line 4.
Line 6	Using the Marginal Tax Rates (DEDX) entries for Nebraska State Tax deduction, compute tax on the Taxable Amount (Line 5).
Line 7	Divide the amount on Line 6 by the number of payroll periods in a year to determine the employee’s Nebraska Withholding Tax for the pay period. Divide the amount on Line 6 by the number of payroll periods in a year to determine the employee’s Iowa Withholding Tax for the pay period.

*Determine the Annual Exemption Amount

Take the Annual Exemption Amount on the Tax Parameters (TAXP) entry for the employee’s Nebraska State Tax deduction for the specified Marital Status.

*Determine the Allowances

Take the Annual Exemption Amount for the specified marital status from Annual Exemption Amount on the Tax Parameters (TAXP) and multiply it with the number on State Tax Allowances on State Tax Enrollment (TAXS).

Note: The Nebraska State Tax Routine is only available for sites that utilize the Next Generation Payroll service.

Data Setup Considerations

Sites need ensure that they have implemented the following Business Process/Data Setup changes at their site prior to using the Nebraska Tax Routine.

Tax Parameters (TAXP) Setup for Nebraska State Tax Deductions

The Annual Exemption Amount field is the Personal Exemption Amount for the specified Marital Status.

State Tax Enrollment (TAXS) enrollment (Note: this only applies to employees enrolled in State Tax Class (TAXCS) that includes a Nebraska State Tax Deduction).

The State Tax Allowance field is the allowances count.

Special Condition:

If this calculation is less than 1.5% of the taxable wage amount, consider the tax to be withheld as 1.5% of the taxable wage amount and only if the pay allows it.