Costpoint Online Help

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Local Subtask

Use this subtask to designate various choices regarding how a deduction must be treated for each locality's income tax when payroll is computed.

For example, a 401(k) deduction can be subtracted from wages before income tax is computed for some localities, and not for others.

If a locality for which an employee has been set up on the Manage Employee Taxes screen is not found here, Costpoint performs the calculation based on the federal tax setup for this deduction.

Note: A cafeteria plan deduction is exempt from federal withholding. If you have a locality that follows this same rule (that is, a cafeteria plan is exempt from state withholding), you do not need to set it up here because, if the locality is not found, Costpoint calculates by the federal rules.

To add a new row to the table, click .

Contents

Field Description
Locality

Enter, or click to select, the locality code for which you want to set up taxability rules. Locality IDs are validated against the Locality table. You must have already set up localities on the Manage Local Taxes screen before you can enter the code here.

Locality Name

The locality name is displayed automatically after the code for the locality is entered.

Income Taxability

Enter one of the following system-provided codes depending on the locality income tax computation for this deduction:

  • F-Fully Taxable: The deduction has no effect on calculation of local income tax. An example of this is an employee advance deduction.
  • W-Taxable; but not subject to W/H: The deduction is taxable when added to gross pay, but withholding is not required. An example of this is Excess Life Insurance. This method is not recognized if a locality has been set up with a YTD Tax method for calculating tax liability. See the Manage Local Taxes screen for setting up Localities.
  • E-Exempt: Costpoint subtracts the deduction from gross pay before computing taxes. An example of this is a cafeteria plan deduction.