Troubleshooting Federal Tax Withholding

This article outlines ways to troubleshooting potential issues with Federal Tax Withholding.

Pay Setup

• Check the Employee Change Log report to see if there have been recent changes to the employee tax setup.
• Check if allowances are set to "99".  This will result in taxable wages being tracked but no tax being withheld.
• Check if the employee has been marked as exempt.  This will result in no taxable wages and no tax being withheld. 
• Check if the employee has an "Additional Withholding" or "Percentage" entered within their Pay Setup.
• Verify the information on the Pay Setup screen reflects what the employee has entered on the W-4.

Orders

• Check the "Pay Periods" on the order. 
• Check the Order Change Log report to see if the Pay Periods have been changed recently.

Timecards

• Check the employees timecard for values in "Fed Withholding", "State Withholding", and "Pay Periods" on the "Overrides" tab.
• Check the Paycode of the transaction:
  • The Paycode may be set up to withhold at the supplemental tax rate.

Check Register

• Check to see if the employee check in question had multiple transactions from different weekend dates:
  • If the pay periods on the Order(s) is 52 but there are multiple weekend dates on the check, the system will adjust the pay periods when annualizing the wages for tax calculation purposes.

• Check to see if there were any pre-tax deductions on the check.

Additional Resources

• Refer to the following publication for additional information:
  • Publication 15-T - Specifically pages 8-10

Related Articles

• Enterprise - How to Manage Employee Taxes
• Enterprise - Order Types and Pay Periods