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Administrator Guide
Last Updated: 2024-03-08
Steps: Adjust Prior Period Taxes (USA)

Steps: Adjust Prior Period Taxes (USA)

You can adjust prior period taxes by retroactively adding, changing, or deleting the:
  • Primary work or resident state tax authorities of a worker.
  • Tax elections of a worker for their primary work and resident city, county, school district, domicile state, or local other.
  1. (Optional) Create a net pay offset code for the PPTA calculator to use for your tax adjustment result.
  3. Complete the prior period tax adjustment result that you created.
The tax adjustment result:
  • Doesn’t void the original pay result.
  • Acts like a sibling result and is treated like an update to the original pay results’ tax authorities for tax authority limit and balance purposes.
The tax adjustment result uses all tax conditions that are in effect for the original payroll period of the completed payroll result.
When you adjust prior period taxes on a pay result, Workday doesn’t split the original pay result into multiple gross-to-net (GTN) results when the retroactive effective date is in the middle of the period. We recalculate the entire period for the:
  • Primary work tax authority.
  • Primary home tax authority.
  • Domicile state tax election.
If you create a tax adjustment result for a period with multiple sibling GTN results, Workday creates tax adjustment results for each subperiod.
The accounting for the tax adjustment result is based on the configuration of the original payroll result.
We recommend that you review the accounting after using the
Prior Period Tax Adjustment Calculator
 task to verify that the accounting is valid according to your business rules.
If a pay component is resolving on a tax adjustment not sent from the PPTA, add the
Is Not Processing Tax Adjustment Result
 instance value calculation to the pay component’s worker eligibility to help prevent it from resolving on the tax adjustment ODAs.
In these scenarios, rerun the PPTA calculator to verify that you account for the pay balances from the manual payment:
Scenario
Solution
A worker has a:
  • Completed on-cycle.
  • Manual payment in progress.
Complete or cancel the incomplete pay result that exists before you run the PPTA calculator.
You create:
  • An in-progress on-demand additional payment using the PPTA calculator.
  • An on-demand additional payment manually.
Recalculate the tax adjustment result that you created first with the PPTA calculator.
If you need to reverse an original pay result that has been adjusted by a tax adjustment result, you must either:
This order helps avoid reporting wages and taxes that don't have any related earnings or deductions.