MANAGE FEDERAL TAXES

Use this screen to set up Federal Tax information that is related to the Calendar Year (Payroll Year). You can establish multiple years. This screen supports calculations of FICA, Federal Income Tax Withholding, Federal Unemployment Tax, and Qualified Deferred 401(k) Plan deferrals and wage ceilings.

Load the existing tables when initializing Costpoint, and modify the tables whenever they become outdated, per Federal publications. Deltek sends Tax Tables updates when updates are available. These tables must be current before your first payroll of the new calendar (payroll) year. To modify existing information for a payroll year, highlight the applicable field and enter the new data. To add new information for a payroll year, click and enter applicable information.

Location

Table Window

Payroll Year

Enter a year. The Payroll Year is the calendar year to which the information applies.

Social Security Wage Limit

Enter the total amount of wages subject to the social security tax. The wages must be applicable to the year you are adding (for example, 87,000 for 2003).

Social Security Employer Rate

Enter the percent (of applicable wages) that the employer must pay as its part of the social security tax. The percentage must be applicable to the year you are adding (for example, 6.2 for 2003).

Social Security Employee Rate

Enter the percent (of applicable wages) that the employee must pay as part of the social security tax. The percentage must be applicable to the year you are adding (for example, 6.2 for 2003).

Medicare Wage Limit

Enter the total amount of wages subject to the Medicare tax. At present, all wages are subject to Medicare tax. Entering all nines enables correct calculations.

Medicare Employer Rate

Enter the percent (of taxable wages) that the employer must pay as its part of the Medicare Tax. The percentage must be applicable to the year you are adding (for example, 1.45 for 2003).

Medicare Employee Rate

Enter the percent (of taxable wages) that the employee must pay as part of the Medicare Tax. The percentage must be applicable to the year you are adding (for example, 1.45 for 2003).

Medicare Additional Tax Threshold

Enter the threshold amount that was defined by the U.S. government at which additional Medicare tax shall be withheld from the employee.

Medicare Additional Tax Rate

Enter the additional Medicare rate to be applied when wages exceed the U.S. government -defined threshold.

FUTA Wage Limit

Enter the total amount of wages subject to the Federal Unemployment Tax (FUTA). The wages should be applicable to the year you are adding (for example, 7,000 for 2003).

FUTA Employer Rate

Enter the percent (of applicable wages) that must be paid for the Federal Unemployment Tax (FUTA). The percentage must be applicable to the year you are adding (for example, .8 for 2003).

Federal Exemption Amount

Enter the exemption amount that applies to Federal Income Tax Withholding. The exemption amount must be applicable to the year you are adding (for example, 3,050 for 2003).

Nonresident Alien Additional Amount

Enter the additional amount provided in Publication 15, Circular E. Costpoint adds this amount to the nonresident alien's wages when it calculates the income tax withholding for each payroll period. The amount is added only for this calculation. Costpoint determines the amount to be withheld by applying the appropriate values from the income tax withholding tables to the amount of wages paid plus the additional chart amount entered here.

This amount is not included in any box on the employee's Form W-2. It does not increase the income tax liability of the employee, nor does it increase the Social Security, Medicare, or FUTA tax liability of the employer or the employee.

For wages paid on or after January 1, 2006, employers are required to apply a new procedure in calculating the amount of federal income tax withholding on the wages of nonresident alien employees. For more information, see Notice 2005-76 on page 947 of Internal Revenue Bulletin 2005-46.

This procedure applies only to nonresident alien employees who have wages subject to income tax withholding. It does not apply to nonresident alien students from India and business apprentices from India.

Supplemental Tax Rate ($1,000,000 and under)

Enter the tax rate to be used for Federal Income Tax Withholding related to Supplemental (Bonus) wages under $1,000,000 year-to-date. This percentage must be applicable to the year you are adding (for example, 35 for 2005).

Supplemental Tax Rate (Over $1,000,000)

Enter the tax rate to be used for Federal Income Tax Withholding related to Supplemental (Bonus) wages over $1,000,000 year-to-date. This percentage must be applicable to the year you are adding (for example, 35 for 2005).

401(k) Wage Limit

Enter the maximum amount that can be used as base wages for members of the "high" compensation group for purposes of 401(k) Actual Deferral Percentage (ADP) testing. This wage limit must be applicable to the year you are adding (for example, 200,000 for 2003).

401(k) Deferral Limit

Enter the amount that can be deferred from wages as a result of employee's voluntary reduction (deferral) of wages related to Section 401(k) Qualified Deferred Compensation Plans. This deferral limit must be applicable to the year you are adding (for example, 12,000 for 2003).

Federal Poverty Level

Enter the one-person poverty level threshold amount for the 48 contiguous states and the District of Columbia. This amount will be used to determine if the lowest cost employee-only coverage is affordable.

ACA Safe Harbor Affordability Rate

Enter the percentage of an employee’s household income that will be used to determine whether the minimum-value coverage offered to the employee is affordable.

Subtasks

• Table Information

  Changes to this screen update the following tables:

  Federal Tax Information (PR_FED_TAX_INFO)

  FUTA Credit Reduction States (FUTA_CRED_REDUC_ST)