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HRS Payroll - Enter Employee's Tax Form W-4 Withholding Allowance Certificate



This document explains how to add Tax Form W-4 Employee's Withholding Allowance Certificate in PeopleSoft HRS for a new employee. Form W-4 is used to withhold the correct federal and state income tax from the employee's pay. Non-resident employees of Wisconsin are responsible for filing non-resident taxes for Wisconsin and resident taxes in the state in which they legally reside.

Wisconsin currently has reciprocity agreements with four states: Illinois, Indiana, Kentucky, and Michigan. These agreements state, in general, that residents of these states will be taxed on personal service income by their home state, rather than by Wisconsin.

Foreign National Employees should use the Glacier Nonresident Alien Tax Compliance System to determine if they are a resident or nonresident alien for tax purposes. Refer to HRS KnowledgeBase document 17409, Maintain a Foreign National's Information.

Before using this Job Aid, you will need the following:


To add an employee's tax Form W-4 | Employee's Withholding Allowance Certificate (first time or new hire):

  1. From the PeopleSoft HRS Main Menu, navigate to:  Payroll for North America > Employee Pay Data USA > Tax Information > Update Employee Tax Data.
  2. In the Update Employee Tax Data screen, Find an Existing Value tab, enter the 8-digit employee ID in the EmplID field, and click the Search button.

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  3. The Federal Tax Data tab displays for the employee.  Verify the employee name and Person ID (also known as Empl ID).

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  4. Review the Effective Date section:

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a.  For new hires, the Effective Date field automatically displays the hire date of the employee (e.g. 08/15/2011). 
     The text, "This data was last updated by Hire Prcss..." (e.g. Hire Process) indicates the employee is a new hire.

b. The Exempt from FUT box is checked by default. (FUT represents Federal Unemployment Tax).

 Since Payroll Coordinators do not have access to Correct History mode, they need to add a new effective date row, and enter an effective date that is one day after the hire date (e.g. hire date plus 1 day).

Add a new effective date row for Hire Date Plus One

5. To add a new effective date row, click the  null  icon, located in the Effective Date section.

6.  When a new effective date row is added (see screenshot below):

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a. The Effective Date section scroll area indicates 1 of 2 to reflect the data view change.

b. The new Effective Date field displays the current date (e.g. 08/18/2011). The previous effective date (08/15/2011) is historical.

c. To toggle back and forth between the effective date records, click the Show next row button null or Show previous row button  Showpreviousrowbutton.png.

7. In the new Effective Date field, change the current date to the day after the hire date (e.g. hire date plus 1 day).  For our example, this date would be 08/16/2011).  [See screenshot below]

16889HireDatePlusOne.png 

8.  In the Special Withholding Tax Status section, there are several options available:

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a. Default value is None.  This means no special status exists and that federal withholding tax should be calculated based on the employee's gross income, marital status, and withholding allowance. (This option applies for most employees).

b.  Do Not Maintain Taxable Gross and Do Not Withhold Tax option - Employee does not have reporting and withholding obligations with the U.S. Federal government.  (This is not a common option). One example would be for non U.S. Citizens or foreign nationals who are working for the University in a foreign country and are not required to file federal tax in the United States.

c. Maintain Taxable Gross option - Employee has to report taxable wages to the U.S. Federal government, but tax does not have to be withheld from the employee's wages. Two examples are: 1) Employee claims EXEMPT for Federal Tax; and 2)Employee has an applicable IRS Form 673 | Statement for Claiming Exemption From Withholding on Foreign Earned Income Eligible for the Exclusion(s) Provided by Section 911 on file.

d. Non-Resident Alien; Tax Treaty/NR Data option - Employee is a non-resident alien.

e. W-4 Processing Status indicator:
    (1)  None - Select this option to indicate no change.
    (2)  Notification Sent - Select to indicate that the employee has been notified to submit a new Form W-4.
    (3) New W-4 Received - Select to indicate that a new Form W-4 has been received. (Not applicable for first time entry)

9.  In the Federal Withholding Status section:

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          a.  Tax Marital Status indicator: (The default value is Single). Select an option to indicate the employee's marital status for federal withholding. This should match what is on the employee's W-4 form, Marital Status - For Tax Withholding section.

          b. Withholding Allowances number: (The default value is 0). Enter the number of allowances an employee claims for federal withholding tax purposes.  This number should match what is on the employee's W-4 form, Federal Tax section, Number of Allowances for Federal Tax box.

10.  Flagged for IRS section is not used at the University of Wisconsin.

11.  In the FWT Additional Amount (FWT represents Federal Withholding Tax) section:

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a. Amount field - Enter the flat dollar amount (e.g. 50.00) of additional Federal Tax to be withheld per paycheck. This amount should match what is on the employee's W-4 form, Federal Tax section, Additional Federal Tax to be Withheld box.

b. Percentage field - Not used at the University of Wisconsin.

12. In the Lock-In Details section:

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          a. Letter Received checkbox - Select to indicate that the employee has received a lock-in letter from the U.S. Internal Revenue Service (IRS).
          b. Limit On Allowances number: (Default value is 0). Enter the number to which the lock-in letter limits the employee's federal withholding allowances.

13. Earned Income Credit section - Not Applicable.

14. W-5 Processing Status section - Not Applicable.

15. The Special Tax Form Renewal section is customized for the University of Wisconsin to record special tax forms for which an employee might file. It can be used in queries and in reporting to provide information for renewal purposes.

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a. In the Tax Form Renewal field, click on the data lookup icon  Lookupicon.png to display a list of special tax forms.

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b. In the Look Up Tax Form Renewal, Search Results screen, select the desired IRS special tax form (e.g. IRS Form 673).
c. The selected form (e.g. IRS Form 673)  is displayed in the Tax Form Renewal field.

16889TaxFormRenewalselection.png

16. In the Tax Treaty/NR Data (NR represents Non-Resident Alien) section, complete the fields below, as indicated on the employee's W-4 form, section titled, All International Visitors Complete the Following.

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17.  When finished entering information on the Federal Tax Data tab, DO NOT SAVE YET.  You will need to enter and/or verify information on the State Tax Data tab. 

Enter Employee's State Tax Data from Form W-4 (first time or new hire)

18. From the Federal Tax Data tab:

a. If your cursor is at the top of the page, click the State Tax Data tab  null
b. If your cursor is at the bottom of the page, you can click the State Tax Data hyperlink.

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19. The State Tax Data page displays for the employee. Notice that the Effective Date for the hire date plus 1 (e.g. 08/16/2011) is copied over from the Federal Tax Data page.  This is because the Federal Tax Data page and the State Tax Data pages are linked together.

16889StateTaxData-Cheesehead.png
 

20. In the State Information section, default values for all employees are listed in the screenshot below.  Depending on the legal residence of the employee, you may need to change some of these default values.
Note:  In PeopleSoft, an employee is required to have both a Resident State and a UI Jurisidiction State. In February 2011, all employees (except California residents) were converted in PeopleSoft HRS as residents of Wisconsin. 

16889StateInfo-Cheesehead.png

If employee is legal resident of Wisconsin,

a.  Leave the default values "as is" in the State Information section above.

b. Leave the default values "as is" in the Special Tax Status section (located below the State Information section).

c. Skip to State Withholding Elements section at Step 22 below.

If employee is legal resident of Indiana, Illinois, Michigan or Kentucky (states with reciprocal tax agreements with WI):

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d. Uncheck the Resident box so that it is blank.  null

e. Check the box labeled, "Non-Residency Statement Filed" so that a checkmark displays. 16889NonResStatementFiled.png
Note: This option indicates the employee has filled out the proper paperwork for reciprocity (e.g. Wisconsin Tax Form W-220 | NonResident Employee's Withholding Reciprocity Declaration).

f. In the Special Tax Status section, select Do Not Maintain Taxable Gross and Do Not Withhold Tax.

g. Continue to State Withholding Elements section at Step 22 below.

If employee is a legal resident of California: 

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h. You need to add a new row in the State Information section.   Click the  null  icon to add a new row.

i. In the new row, in the State field, click on the data lookup icon  Lookupicon.png  and select CA for California.

j. Uncheck the UI Jurisdiction box so that it is blank.  null

k. Skip to State Withholding Elements section at Step 22 below.

If employee is a legal resident of USA states other than Wisconsin, California, Indiana, Illinois, Michigan, or Kentucky: 

 l.  Leave the default values "as is" in the State Information section and Special Tax Status section above.
Note: Employees are liable for taxes in Wisconsin so the withholding is the same as if they were a Wisconsin resident.

m. Skip to State Withholding Elements section at Step 22 below.

 If the employee is an International Non-resident Alien for tax purposes:

 n.  Leave the default values "as is" in the State Information section and Special Tax Status section above.

o. Skip to State Withholding Elements section at Step 22 below.

 

21. In the Special Tax Status section, there are several options available:

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a. None (default value).  This means no special tax status exists, and that State withholding tax should be calculated based on the employee's gross income, marital status, and withholding allowance. (This option applies for most employees).

b.  Do Not Maintain Taxable Gross and Do Not Withhold Tax option - Employee is exempt from State of Wisconsin withholding tax. Select this option if the employee has indicated they are a resident of Indiana, Illinois, Michigan or Kentucky from Form W-4, section titled, "Non-Resident of Wisconsin."  Also select this option if the employee is living and working in a state other than Wisconsin, and has gross wages paid by the University of Wisconsin.

c. Maintain Taxable Gross; SWT zero unless specified in 'Additional Withholding' below option - Select this option if the employee is exempt from State of Wisconsin withholding tax.  (On the employee's W-4 form, this would be indicated in the Withholding Information section, Exempt for Wisconsin State Tax box is checked  "Yes"). 

d. Non-Resident Alien; Fed Rules option - Employee is a non-resident alien.

22.  In the State Withholding Elements section, the default values are Single for Marital/Tax Status and 0 (e.g. zero) for Withholding Allowances. (See screenshot). If these values are different from the employee's W-4 form, change to match what is on the W-4 form.

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16889StateWHElements-Calif.png

a. SWT Marital/Tax Status (defaults to S for Single for legal residents of Wisconsin).  Click on the data lookup icon  null to  select an option to indicate the employee's marital status for state withholding. This should match what is on the employee's W-4 form.  If the withholding status is "Married but withhold at higher single rate", select S for Single.

16889LookupSWTMarital-TaxStatus.png

b. Withholding Allowances number: (The default value is 0). Enter the number of allowances an employee claims for state withholding tax purposes.  This number should match what is on the employee's W-4 form, Wisconsin State Tax section.

c. Additional Amount field - Enter the flat dollar amount (e.g. 25.00) of additional State Tax to be withheld per paycheck. This amount should match what is on the employee's W-4 form, Wisconsin State Tax section.

d. Additional Percentage field - Not applicable.  Do not enter anything in this field.

e. Additional Allowances field - Enter the number of additional allowances, if applicable.

f. Additional Allowances (CA only) field - For legal residents of California, if applicable.

g. Earned Income Credit option - Not applicable.  Do not enter anything in this field.

h. PR Retirement Plan option - Not applicable.  Do not enter anything in this field.

23.  In the Lock-In Details section:

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a. Letter Received checkbox - Select to indicate that the employee has received a lock-in letter from a state's Department of Revenue.

b. Limit On Allowances number: (Default value is 0). Enter the number to which the lock-in letter limits the employee's State withholding allowances.

24. The California Wage Plan Code section displays for a California resident only.  In the Disability/Unemployment Plan field, click on the drop-down arrow and select the appropriate option.

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25. The Tax Form Renewal Processing Status section lists options to indicate the workflow status of the State Exempt form renewal status.

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26. The UW Special Tax Form Code section is customized for the University of Wisconsin to record special State tax forms for which an employee might file. It can be used in queries and in reporting to provide information for renewal purposes.

16889UWSpecialTaxFormCode-State.png

a. In the Tax Form Renewal field, click on the data lookup icon  Lookupicon.png to display a list of special tax forms. 

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b. In the Look Up Tax Form Renewal, Search Results screen, select the desired special State tax form (e.g. WI W-200).
c. The selected form (e.g. WI W-200)  is displayed in the Tax Form Renewal field.

16889UWSpecialTaxFormCode-W200.png

27. To save the W-4 record for the new employee, click null , located at the bottom of the screen.
Note:  The Local Tax Data tab is not used.

28. The message, Saved, will display for a few seconds in the upper right portion of the screen.

29.  After saving, the State Tax Data tab displays the entered Form W-4 information for the new employee. (See the example screenshot below for Chester Cheesehead, a legal resident of the state of Wisconsin).

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29.  To return to the Main Menu, click the Home hyperlink, located at the top right part of the screen. null


Related Detailed User Procedures:

HRS Payroll - Maintain Employee Domestic Tax Data:
http://kb.wisc.edu/hrs/page.php?id=16391




Keywords: HRS tax form W-4 W4 withholding allowance certificate federal state local international non-resident, nonresident married single marriage reciprocity agreements Illinois Indiana Kentucky Michigan, training   Doc ID: 16889
Owner: Michelle R.Group: Human Resource System (HRS)
Created: 2011-02-13 19:00 CDTUpdated: 2014-01-06 14:15 CDT
Sites: Human Resource System (HRS)