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Some states and municipalities mandate withholding taxes for citizens within their jurisdiction. These tax calculations are functions of either the federal or state withholding taxes. We handle these taxes via an EBD formula attached to an employee via a fixed deduction.
The following screen illustrates how we handle the county tax for Indiana. The formula translates to:
(Accumulate all earnings and subtract (the state allowance * 19.23)) and multiply the result by .002.
The formula is executed prior to the statutory (federal and state) tax calculation. This allows you to reduce (if required) the taxable earnings by this county tax prior to calculating state and federal tax.
Last Updated October 20, 2006