Processing Retroactive State Tax Adjustments

CGI Advantage HRM currently does not support retroactive processing for state taxes.  The following are examples of the typical business process and the steps that need to be followed to adjust state tax withholdings retroactively.

In the instance where an employee incorrectly reported time worked to the wrong schedule location and payroll is processed, users will need to submit a One-Time Deduction (OTDED) and Timesheet Adjustment (TADJ) to adjust to the correct state tax and state code.  For example, if an employee incorrectly reported their time worked in New Mexico instead of North Dakota, a One-Time Deduction would need to be submitted to back out the New Mexico state tax and add the North Dakota state tax for the previous pay period.  Users would also need to submit a Timesheet Adjustment to back out the regular pay events with the New Mexico Schedule Location and submit add the regular events with the North Dakota Schedule Location.

To make the correct adjustments to the state taxes using the OTDED, the following needs to be entered:

1. On the Add/Replace field in the One Time Deduction tab, select Replace Permanent Deduction.

2. On the One Time Deduction Detail tab, add 1 line that reduces the incorrect state tax amount from the previous pay period.  For example, if the New Mexico state tax was incorrectly deducted in the previous pay period for 79.85, users would need to enter -79.85 in the Override Amount field for the New Mexico state tax deduction.

3. On the One Time Deduction Detail tab, add 1 line that adds the correct state tax amount that should have been processed in the previous pay period.  For example, if the amount of 32.35 was supposed to be deducted for the North Dakota state tax instead of the New Mexico state tax, users would need to enter 32.35 in the Override Amount field for the North Dakota state tax deduction.

To make the correct adjustments to the state codes using the TADJ, the following needs to be entered:

1. On the Timesheet Adjustment Detail tab, add 1 line that reduces the amount of the regular pay event used to process the employee’s pay from the previous pay period, along with the schedule ocation that was entered.  For example, if the employee reported that they worked 80.00 with New Mexico as the schedule location, users would need to enter -80.00 in the Amount field along with the New Mexico Schedule location.

2. On the Timesheet Adjustment Detail tab, add 1 line that adds the regular pay event, along with the correct Schedule Location that should have been entered in the previous pay period.  For example, if the employee was supposed to report 80.00 with North Dalota as the Schedule Location, users would need to enter 80.00 in the Amount field along with the North Dakota Schedule Location.

Once the One-Time Adjustment and Timesheet Adjustments transactions are completed, users can verify if the state tax and state code adjustments are correct for the previous pay period using On-Line Check (OCHK).  

The Pay Detail tab displays the pay event with the incorrect state code being backed out, along with the pay event with the correct state code being processed.  For example, Pay Detail will display -80.00 being backed out for the state code NM (New Mexico) and 80.00 being processed for the state code ND (North Dakota).

The Deduction Details tab displays the incorrect state tax being backed out, along with the correct state tax being processed.  For example, Deduction Detail will display -79.85 being backed out for the New Mexico state tax and 32.35 being processed for the North Dakota state tax.

Once the adjustments are verified, users can proceed with processing payroll.