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Administrator Guide
Last Updated: 2024-11-15
Add Worker State Tax Elections (USA)

Add Worker State Tax Elections (USA)

Set up company federal taxes.
Verify that the worker:
  • Is in a company and a pay group.
  • A valid work and primary home address in the U.S.
Security:
Worker Data: Payroll (Company Specific) - USA
 domain in the USA Payroll functional area.
You can enter state tax elections for a worker when they:
  • Require other state withholding elections not entered through Employee Self Service (ESS).
  • Submit state withholding elections using a paper form instead of using Employee Self Service (ESS).
  • Work in more than 1 company. Enter a separate set of tax elections for each company.
These web services support loading and retrieving state and local tax elections:
  • Get Payroll USA State and Local Tax Elections
  • Put Payroll USA State and Local Tax Election
  1. Access the
    Add Worker US Tax Elections
     task.
  2. As you complete the task, consider:
    Option Description
    Effective Date
    For Indiana, Workday only calculates county tax when the effective date of the county tax election is the first of the year.
    Company
    Displays the employee's company as of the
    Effective Date
    .
    Select the company as of the
    Effective Date
     when the employee:
    • Has a future hire date.
    • Is terminated.
    • Has positions in multiple companies.
    Work State
    Displays the state from the employee's primary work address when it exists, or the location of their primary or processing position.
    Home State
    Displays the state from the employee's primary home address.
    Additional States
    Select additional states in which the employee works.
    Your selections apply to taxes calculated for payroll input when:
    • You select the tax authority worktag on payroll input.
    • Workers have ongoing multiple work jurisdictions specified on the
      Tax Allocations
       tab.
    • Workers are
      MSRR Exempt
      . Select the domicile state where the employee pays taxes.
  3. As you complete the
    State
     tab, consider:
    When the
    Work State
     or
    Home State
     you select requires withholding, the
    State Withholding
     section displays.
  4. As you complete the
    State Withholding
     section, consider:
    Option Description
    Number of Allowances
    Accepts up to 5 digits.
    Additional Amount
    Workday calculates additional state withholding on regular on-cycle payments unless it’s supplemental pay only.
    For nonregular run categories, Workday doesn't deduct additional amounts. You can include the
    Additional Amount
     pay component related calculation (PCRC) in your deduction. Example: Worker has a bonus paid in an on-cycle, nonregular run category and you want Workday to withhold an additional amount, so you add the
    Additional Amount
     PCRC to the
    Federal Withholding [USA]
     deduction.
    Workday displays the additional amount elected on the payroll administrator view of pay results, but it might not reflect the total amount withheld due to net pay validation.
    For on-demand additional payments paid in regular run categories, Workday deducts when you:
    • Selected the
      Take Additional Tax Withholding Amounts
       check box.
    • Enter input for the
      Additional Amount
       PCRC.
    Exempt
    The employee remains exempt from state withholding in Workday until you enter different instructions. Workday doesn't automatically reset employee exempt status at the beginning of each year.
    When a worker is exempt but has an
    Additional Amount
     defined, the additional amount is still withheld from each payment. If your state doesn't allow an additional amount for exempt workers, ask the worker to submit a corrected form.
    Inactivate State Tax
    For workers who reside in Iowa or Arizona and work in another state, Workday calculates resident state withholding tax if the worker has an active state tax election.
    Select this check box when:
    • The worker has an existing state tax election.
    • You don't want Workday to calculate the resident state withholding tax for Iowa or Arizona.
    MSRR Exempt
    Select this check box for the state where worker is residing with their military spouse.
    Domicile State
    When the employee is
    MSRR Exempt
    , select the state of permanent residency, where the employee pays state and local taxes.
    No Wage/No Tax
    Select to prevent Workday from resolving state withholding.
    These states have additional withholding processing details:
    State
    Details
    District of Columbia
    Nonresidents who work in the District of Columbia can file a Form D-4-A to be exempt from state withholding. Select the
    Form D-4-A Filed
     and the
    Exempt
     check boxes.
    Indiana
    If you manually specify Indiana county tax elections for a worker in the
    Indiana Withholding
     grid, you must select the
    Form WH-4 Filed
     check box to ensure that those elections are applicable.
    When you select
    Form WH-4 Filed
    , Workday uses the last updated date and time and county elections to determine the effective county elections. Update the Indiana Local County tax election to be effective on or after the date of the Indiana state election.
    When you don't select
    Form WH-4 Filed
    , Workday uses the most current effective tax elections for the Indiana Local County.
    Workday automatically selects the
    Form WH-4 Filed
     check box when you use the
    Complete State and Local Withholding Elections
     task to submit a WH-4 form.
    Workday doesn't create corresponding county elections when you or the employee submit a WH-4 form in Workday with these fields blank:
    • County of Principal Employment as of January 1.
    • County of Residence as of January 1.
    The county tax elections don't apply if you haven't completed these fields.
    If you need to make any changes to the state election, you must add applicable county elections again. Example: The worker changes marital status.
    Kentucky
    If an employee has no birth date on file, Workday considers the employee to be under 65 for exemption purposes.
    When you select the
    Fort Campbell Exempt
     check box, Workday calculates the employee as exempt and the
    Domicile State
     field becomes available.
    Louisiana
    The
    Increase or Decrease Withholding Amount
     field accepts negative numbers.
    Oklahoma
    When you select the
    Active Duty
     check box, Workday calculates the worker as exempt from state taxes.
    Virginia
    When a worker claims
    Estimated Tax Credit per Period
    , Workday reduces the Virginia State Withholding (Resident) tax amount by the tax credit when the worker:
    • Is a resident of Virginia.
    • Works in a non-reciprocal state.
  5. As you complete the
    Unemployment Insurance
     section, consider:
    Workday calculates State Unemployment Insurance (SUI) for the worker primary work state if required by the state. SUI is based on wages earned in all states.
  6. As you complete the
    Other
     section, consider:
    Option Description
    Other
    Select additional state or local tax to elect, exempt, or inactivate.
    Exempt
    Select to exempt the worker from a tax that doesn't require an election.
    Inactive
    Select to stop calculating a tax when the worker is no longer liable for it. Example: The worker moves from the jurisdiction.
    When the
    Work State
     or
    Home State
     you select has payroll other tax authorities, the
    Other
     section displays.
    These authorities are used for taxes that aren’t covered by state or local withholding elections, such as optional state voluntary disability insurance. To view a complete list of other tax authorities and which require a tax election, access the
    View Payroll Other Tax Authorities
     report.
    If the employee works in multiple tax jurisdictions on an ongoing basis, taxes elected here but not listed on the
    Tax Allocations
     tab are calculated under certain conditions, unless you inactivate them. See Set Up Ongoing Multiple Work Jurisdictions (USA).
You can view tax data for an employee on these reports:
Report
Description
Withholding Orders for Worker
Displays an employee's federal and state tax levies
Worker US Tax Elections
Displays an employee's federal, state, and local tax withholding information.
  • To correct, delete, or update employee tax elections, access the
    Worker US Tax Elections
     report. In the first column, select
    Worker Tax Election
     and choose the applicable task (Edit, Delete).
  • When an employee changes companies, enter their tax elections for the new company.
  • When an employee works in multiple tax jurisdictions on an ongoing basis, you can set up tax location mapping for your company. You can deactivate those mappings for a worker entirely or for individual states. See Set Up Company Taxes by Location (USA).