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Virginia State Tax Routine (VATX)

The Virginia 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	Compare the Annualized Gross Income to the Low Income Exemption Amount*. If the Annualized Gross Income is below the Low Income Exemption Amount, taxes are not withheld. If the Annualized Gross Income is above the Low Income Exemption Amount, proceed to Line 3.
Line 3	Determine the employee’s deductions: Standard Deduction** Regular Withholding Allowances*** Estimated Deductions Allowances****
Line 4	Determine the Taxable Amount by subtracting Lines 3A and 3C from Line 1.
Line 5	Using the Marginal Tax Rates (DEDX) entries for the California State Tax deduction, compute tax on the Taxable Amount (Line 4).
Line 6	Subtract Line 3B from Line 5 to adjust for regular withholding allowances.
Line 7	Divide the amount on Line 6 by the number of payroll periods in a year to determine the employee’s California Withholding Tax for the pay period.

*Determine the Personal and Dependent Exemption Amount

1. Take the Annual Exemption Amount on the Tax Parameters (TAXP) entry for the employee’s Virginia State Tax deduction and Marital Status * the number of State Tax Allowances on the employee’s Employee Tax Parameter (TAX).

*Determine the Age 65 and Over & Blind Exemption Amount

1. Take the Amount/Percent 1 value on the Deduction Plan (DPLN) entry for the employee’s Virginia State Tax deduction * the number of Additional State Tax Allowances on the employee’s Employee Tax Parameter (TAX).

Data Setup Considerations

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

1. Deduction Plan (DPLN) Setup for Virginia State Tax Deductions:

1. The Amount/Percent 1 field is the Age 65 and Over & Blind Exemption Amount.

2. Tax Parameters (TAXP) Setup for Virginia State Tax Deductions.

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

2. The Minimum Standard Deduction Amount is the Standard Deduction Amount for the specified Marital Status.

3. Employee Tax Parameter (TAX) enrollment (Note: this only applies to employees enrolled in a Tax Class (TAXC) that includes a Virginia State Tax Deduction).

1. The State Tax Allowance field is the State Personal and Dependent Exemption count.

2. The Additional State Tax Allowance field is the Age 65 and Over & Blind Exemption count.