Taxes

Overview

The Internal Revenue System (IRS) and states impose some form of payroll tax on employers, their employees, and independent contractors. These taxes are applied on each paycheck issued to them. The Taxes screen allows you to maintain a list of all taxes used by your company. Core keeps track of the different federal, state and local taxes by assigning a code to each of them. By default, all the federal tax codes are available in the list and preloaded for companies in all 50 states. Based on the employees and vendors (consultants or contract employees) on your payroll and their work locations, Core automatically generates a list of taxes applicable to your company. You can add more taxes (state or local taxes) for use in the payroll if the state taxes are not already listed or taxes for multiple states are needed. If you have entered your address (including zip code and state) in the Company Profile screen, then you do not have to enter any tax Information.

If the company has a special rate for the State Unemployment Tax (SUTA) or Federal Unemployment Tax (FUTA), that must be saved; otherwise, these taxes can be left as is and Core will use the default rate determined by the IRS. After a tax has been used in a payroll cycle, it cannot be removed. You can customize deposit frequencies and tax calculations to use. Some states in USA do not impose a state income tax, such as Alaska or Nevada. However, all states impose state unemployment taxes on employers or employees.

Field Descriptions

Basic Tasks

Add Taxes

View Reports

Advanced Tasks

Add Company Payroll Tax Schedule

Show/Hide Columns in Grid

Export Taxes

Field Descriptions

Field Name Field Description
Payroll Lists > Taxes > Detail View >
Tax Type Type of tax and the level at which it is applicable: federal, state or local, say FUTA.
Tax The tax code identifier, say FUTA, OASDI or Social Security. These taxes determine your payroll tax rates. Some of the taxes include:
  • FUTA: Federal Unemployment Tax Act (FUTA) provides for the payment of unemployment compensation to workers who have lost their jobs. Only employers are subjected to a FUTA tax liability and so it is not deducted from the employee wages.

  • State Unemployment Insurance Tax: Your state collects unemployment insurance tax based on employee wages. It can be paid by the company, employee or both. This insurance is a government-mandated program that is administered by the federal government (FUTA) and state. It provides you with a limited income replacement when you are out of work through no fault of your own for a period of up to 26 weeks.

  • Federal Medicare: This federal medicare tax withholding requires a matching contribution from the employer. It is a payroll tax.

  • Federal Tax: Federal income tax withholding applicable to an employee.

  • State Tax: Your state requires income tax withholding from the employee's paycheck or salary. This tracks the state withholding liability to be paid by the employee.

  • State Disability Insurance Tax: This tracks the employee-paid state disability insurance. If your company is in a state that collects disability insurance based on employee wages like CA, HI, NJ, NY, etc., this tax can be paid by the company, employee or both.

Example: The State of California requires that a certain percentage of your salary be deducted to pay for this state administered benefit. The plan (SDI) is designed to pay a weekly benefit that partially replaces income lost during a period of disability that prevents you from working. 

Tax Payer ID The employer’s Tax Identification Number (TIN) or Federal Taxpayer Identification Number.
Agency The payroll agency associated with the taxes, e.g., Insurance, Provident Fund, etc. You can create that list in the Agencies screen. It is pre-filled when you select the state for the taxes.
State or Territory State or territory where the tax is applicable. When selected, a list of default taxes displays and you can un-check the ones your do not need. Tax type combined with the state or territory gives you the list of taxes.
Tax Description The name or description of the tax represented by the tax code, say CA State Income Tax.
Pay Stub Description Brief description you want to use on the pay stub for the deduction of this tax. 
PSD/District Code A six-digit code that identifies political sub-divisions (cities, boroughs, etc.) in some states like Pennsylvania.
Accounts

These are the accounts that get posted for expenses and liability related to payroll taxes:

  • Employee Tax Liability Account

  • Company Tax Liability Account

  • Employee Tax Expense Account

  • Company Tax Expense Account

Company Payroll Tax Rate Schedule: Start/End Date

This determines the schedule of the selected payroll tax, including the start and end dates along with the tax rate or amount. Based on the start date, the end date gets automatically filled as the end of the year date.

 

Add Taxes

Core allows you to add various taxes for payroll purposes. It includes them when calculating the tax deductions on employee paychecks.   

To add a payroll tax:

    1. Open the Taxes screen from the side menu > Lists > Payroll.

    2. In the list view on the right, click Add.

    3. On the Add New Tax dialog, select a State (or territory) ( State or territory where the tax is applicable. When selected, a list of default taxes displays and you can un-check the ones your do not need. Tax type combined with the state or territory gives you the list of taxes.) for which you want to add a tax. Core displays a list of predefined codes for the taxes applicable to the selected state.

    4. Select the tax codes ( The tax code identifier, say FUTA, OASDI or Social Security. These taxes determine your payroll tax rates. Some of the taxes include:
      - FUTA: Federal Unemployment Tax Act (FUTA) provides for the payment of unemployment compensation to workers who have lost their jobs. Only employers are subjected to a FUTA tax liability and so it is not deducted from the employee wages.
      - State Unemployment Insurance Tax: Your state collects unemployment insurance tax based on employee wages. It can be paid by the company, employee or both. This insurance is a government-mandated program that is administered by the federal government (FUTA) and state. It provides you with a limited income replacement when you are out of work through no fault of your own for a period of up to 26 weeks.
      - Federal Medicare: This federal medicare tax withholding requires a matching contribution from the employer. It is a payroll tax.
      - Federal Tax: Federal income tax withholding applicable to an employee.
      - State Tax: Your state requires income tax withholding from the employee's paycheck or salary. This tracks the state withholding liability to be paid by the employee.
      - State Disability Insurance Tax: This tracks the employee-paid state disability insurance. If your company is in a state that collects disability insurance based on employee wages like CA, HI, NJ, NY, etc., this tax can be paid by the company, employee or both. Example The State of California requires that a certain percentage of your salary be deducted to pay for this state administered benefit. The plan ( SDI ) is designed to pay a weekly benefit that partially replaces income lost during a period of disability that prevents you from working.) that you want to add. Please ensure you have provided the correct tax percentage for FUTA and SUTA.

    5. Click Done to add the selected tax codes to your list. The list of taxes is added to the grid. It pre-fills the Agency The payroll agency associated with the taxes, e.g., Insurance, Provident Fund, etc. You can create that list in the Agencies screen. It is pre-filled when you select the state for the taxes. required for the taxes.

    6. You can view the tax details by clicking dropdown-caret.png to select View Details.

View Reports

To view a report:

    1. Open the Taxes screen from the side menu > Lists > Payroll.

    2. In the list view, click More > View Reports.

    3. Select a report from the Report List dialog. It opens in the viewer.

    4. Preview the report and then choose to export or print it.

Add Company Payroll Tax Schedule

For taxes that include employer-side contribution such as SUTA, FUTA, etc., you need to manage a set of company-side payroll tax rates in a date-driven schedule. You can add the employer-side contribution of the payroll tax to a tax code in the form of a schedule. So for any given tax code, there is a way to define an additional list of taxes the company must pay based on active date ranges.

To add a payroll tax schedule:

    1. Open the Taxes screen from the side menu > Lists > Payroll.

    2. In the list view, select a tax code and click dropdown-caret.png to select View Details.

    3. In the detail view, under Company Payroll Tax Rate Schedule, click Add Schedule.

    4. Enter the required information in the top row of the grid:

      • Start Date: This determines the schedule of the selected payroll tax, including the start and end dates along with the tax rate or amount. Based on the start date, the end date gets automatically filled as the end of the year date.

      • End Date: This determines the schedule of the selected payroll tax, including the start and end dates along with the tax rate or amount. Based on the start date, the end date gets automatically filled as the end of the year date.

      • Tax Rate

      • Flat Tax Amount

    5. Click Done.

    6. You can add more as long as there are no overlapping date ranges. Click Save when you are done adding the schedules.

Show/Hide Columns in Grid

You can configure the fields or columns that appear on the grid in the list view. You can hide or show columns, and sort the order of columns according to your requirements.

To do so, watch this video or follow these steps:

    1. Open the Taxes screen from the side menu > Lists > Payroll.
    1. In the list view, click More > Show/Hide Columns on the action bar.
    2. Select or un-select the column names in the drop-down list, say Agency.
    3. Next, click the column name you want to sort the data by, say Tax Type.
    4. Click once for ascending order ( A-Z) and twice for descending order ( Z-A).

Note: You can resize the column widths on the grid and then reset them, if needed (More > Reset Column Widths).

Export Taxes

In Core, you can export the taxes to the Comma Separated Values file format. Core exports data from all available columns and not just the columns visible in the grid.

To export tax records to a .CSV file, watch this video or follow these steps:

    1. Open the Taxes screen from the side menu > Lists > Payroll.

    2. In the list view, click More > Export as CSV.

    3. A .csv export file is created and saved on your system at the default download location, say your desktop. Click to open the spreadsheet.

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