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Combining local payroll tax districts

Creating a table of states

Setting up payroll calculations for local payroll tax districts

Setting up a local payroll tax district like a state income tax

Viewing the details for local payroll tax districts

About calculation types

About reciprocal agreements and local payroll tax districts

Entering local payroll tax districts

Consider the following points before entering payroll tax districts:

  • Some regions have reciprocal agreements. Using the Differential column, you can indicate that the local payroll tax district for the job site has a reciprocal agreement.
  • When you have local tax districts in different states, group the tax districts by state using the district numbers.

Important! If employees work in New York City or Yonkers, you must set up a special tax district in order to calculate taxes correctly.

Important! Do not use local payroll tax districts for State Unemployment or other non-income tax purposes.

To enter local payroll tax districts:

  1. Open 5-3-6 Local Payroll Taxes.
  2. In the District# cell, enter the district number.
  3. In the District Name cell, enter a description of the district.
  4. In the Resident Rate cell, enter the rate paid by residents.

  5. In the Non-resident Rate cell, enter the rate paid by non-residents.

    Important! If the district does not make a distinction between residents and non-residents, enter the same rate in the Resident Rate and Non-resident Rate cells.

  6. In the Tax State cell, enter the state abbreviation.
  7. Repeat steps 2–6 for each tax district.
  8. Click File > Save.
  9. Set up the payroll calculation type for each district created.