CCIS Payroll annualizes all earnings and uses the exact calculation or percentage method to arrive at Federal, State, and New York City withholding amounts. All the information that pertains to a given taxation authority is contained in a system file called TAXTABLE.DTA. This file is stored in the current year’s folder.
This file contains information telling CCIS Payroll which rates to use, what formulas to apply, how much money is exempt, etc. In some cases, it also holds minimum wages, disability insurance rates and limits.
SUTA rates and limits are found in the Payroll States tab of the Client Master file. FUTA rates and limits are in the Firm file.
A tax table consists of two parts, General Information that holds such things as formula numbers, dependent exemptions etc., and up to three Tax Rate Tables, one for Married, another for Single, and a third for Head of House taxpayers.
This is the General Information window.
The General Information window is divided into five sections:
• Deductions - Items that are deducted from income before computing taxes. Depending on the law, they can contain such things as a percentage of Gross Pay, some or all of the Federal Income Tax, and other deductions enacted by your state.
• Exemptions - More items that are excluded from the tax calculations. Exemptions differ from Deductions, generally, in that they are tied somehow to marital status and the number of claimed dependents.
• Credits - Amounts that are deducted from the computed tax. This area is labeled Medicare in the Federal Tax Table.
• Taxes - This area tells CCIS Payroll how many tax tables there are, how many entries are in each table, and taxable pay that is exempt from withholding. If your state computes withholdings using a flat rate, the rate is kept here also.
• Disability - Used to set the rates and limits for States that withhold amounts to pay employees in the case of disability. Can be called SDI, TDI and DI, too. This area is labeled FICA in the Federal Tax Table.
The Federal Government, and any state that has a tax that is not a flat rate tax, specifies a computer formula for determining the withholding for a given taxable pay. Computer formulas fall into two broad categories, a wage bracket method that specifies a base tax and incremental percentage, and a stepwise method that specifies the tax rate for specified increments of taxable earnings.
There may be up to three tables, one for each filing status. CCIS Payroll knows how many tables there are from the entry in Taxes: Number of Tables. It knows how many entries to expect in each table from the value in Taxes: Entries per Table.
This is a Tax Rate Table window.
The window has four columns: Over, Not Over, Base Tax, and Rate%. These correspond closely with labels used by the IRS and any state that uses a Wage Bracket method.
The other type of tax table is an incremental table wherein a specific amount of tax is computed for each dollar earned using tax rates that may vary over specific steps, the total tax being the sum of each level.
Tax table updating overview
CAUTION - ACCURATE TAX TABLES ARE ESSENTIAL TO THE PROPER OPERATION OF CCIS PAYROLL. YOU THE USER ASSUME ALL RESPONSIBILITY FOR THE PROPER FUNCTIONING OF THIS SOFTWARE, AND ASSUME ANY AND ALL LIABILITIES OF WHATEVER KIND SHOULD YOU ELECT TO MAKE ANY CHANGES WHATEVER TO THESE TABLES. CHANGING THE TAX TABLES MEANS THAT YOU ACKNOWLEDGE AND ACCEPT THIS RESPONSIBILITY AND LIABILITY.
The tax table update service is provided with your CCIS Payroll Annual Support Plan (ASP) for an annual fee. For more information about an Annual Support Plan for CCIS Payroll, contact the Marketing Department at 800-295-7551.
We recommend that you be very methodical in going about changing the tables. Here is the recommended procedure:
1. Set up a Test Client for the state that you need to change. The client should have one employee for each wage bracket or tax level and marital status.
2. Print out the Tax Tables.
3. Gather the information you require. For Federal, you'll need Circular E. You need a similar formula for your state. Some call them Computer Formulas. The formula is easy to recognize.
4. Carefully compare each figure and mark any required changes in red on the printed copy of the tax table.
5. Make sure that you will be left alone and undisturbed.
6. Change the tax tables.
• NEVER CHANGE A FORMULA NUMBER WITHOUT BEING TOLD TO BY ONE OF OUR SUPPORT PERSONNEL. FORMULA NUMBERS DIRECT THE LOGIC FLOW WITHIN THE PROGRAM. CHANGING THEM WILL PRODUCE DIFFERENT AND PROBABLY INCORRECT RESULTS.
• Only rarely will a state change its METHOD of determining withholdings. If you see a change in the examples given in your tax guides from one guide to the next, it is possible that a change in method has occurred and you should contact CCIS Software Support (800-873-7435).
• ZERO (0) is a valid formula number.
7. Print the new table and check it carefully against the information in the circulars.
8. Using Time Entry, pay enough employees to cover every possible tax rate. If the circular provides any examples, use them too.
9. Calculate the taxes by hand using the instructions in the circular. Compare the manual calculations with the computed ones. They should agree within a penny or so. Any greater deviation indicates something is wrong. Do NOT expect the results here to agree with published withholding tables. These tables typically cover a range of taxable incomes and are therefore less accurate. Also, CCIS Payroll computes withholding amounts to the penny for the Federal and most states while all tables round to the nearest dollar.
10. If the answers are wrong, return to the beginning, check and repeat everything.
Principles of wage bracket method recording
This section describes how to update a wage-bracket table.
As of May, 2008, CCIS Payroll uses wage bracket tables for: Federal, AR, CA, CO, DE, DC, GA, HI, ID, KS, LA, ME, MN, MS, MT, NE, NJ, NM, NY, NYC, NC, ND, OH, OK, OR, RI, VT, VA, WV, and WI.
States may revise their methods at any time.
This is a Tax Rate Table showing a wage bracket table.
The rules for completing a wage bracket method table are:
• The first entry in the Over column is zero.
• The amount in the Over column in row 2 and on is EXACTLY equal to the value in the Not Over column of the preceding row. For example:
Over Not Over
0 6,350
6,350 41,900
Note that the amount of $6,350 in the Not Over column of row 1 and the amount of $6,350 in the Over column are exactly equal. If these values are not equal, there is a hole in the table. If an employee’s wages happen to fall into this hole, CCIS Payroll can’t find the proper rate and applies the maximum rate in the table. The last entry in the Not Over column must be 999,999.
The Base Tax contains the aggregate withholding to the previous row. Most authorities print it immediately to the right of the Not Over amount.
The Rate% column contains the rate as a percentage.
Principles of incremental table method recording
This section describes how to update an incremental table. As of May, 2008 CCIS Payroll uses an Incremental Table for: AL, IA, KY, MO, MP (Saipan) and SC. States may revise their methods at any time.
The example below is a Tax Rate Table showing an incremental table
The rules for completing an incremental table screen are:
1. The Over column contains the taxable earnings increments.
2. The last entry in the Over column must be 999,999.
3. The applicable tax rate is in the Rate% column.
4. The Not Over and Tax columns are zero.
How to change the Federal tax tables
The Federal tax tables contain the Federal tax rates, the Federal Minimum Wage, the maximum percentage of minimum wage that can be taken from reported tips, the exempt part of Dependent Care Benefits, FICA and Medicare rates and limits, and the Backup Withholding rate.
To change the Federal Tax Tables:
1. Select Home to get to the Main Menu.
2. Choose Maintenance | Tax Tables.
3. Select FED in the Jurisdiction box and press the Tab key.
4. Change the Effective field to reflect the effective date of the table.
5. Change the other values in the General Section as follows:
Section of Table Field name Field Value
Deductions Percent Enter the maximum dollars of the minimum wage that can be made up by reported tips.
Deductions Married Amount Enter the Federal Minimum Wage in cents.
Exemptions Dependent Amount
Enter the amount from the Annually row in the table called Percentage Method - Amount for One Withholding Allowance, in the section called Income Tax Withholding and Advance Earned Income Credit (EIC) Payment Methods in Circular E.
Exemptions Married Amount Enter the exempt part of Dependent Care benefits.
Taxes Entries per Table
Enter the number of lines, including the line beginning with
"Not over ...", in Table 7-ANNUAL Payroll Period in the section called Tables for Percentage Method of Withholding in Circular E.
Taxes Flat Tax Rate% Enter the Backup Withholding rate.
6. Next, change the withholding rate tables.
7. Select the Single Rates button.
8. Enter the rates from Table 7-ANNUAL Payroll Period, part (a) SINGLE person, in the section called Tables for Percentage Method of Withholding in Circular E. Remember to include the "Not over..." line.
9. Check your entries and select OK when done.
10. Select the Married Rates button.
11. Enter the rates from Table 7-ANNUAL Payroll Period, part (b) MARRIED person, in the section called Tables for Percentage Method of Withholding in Circular E. Remember to include the "Not over..." line.
12. Check your entries and select OK when done.
13. Last, enter the Advance EIC payment table. These are kept in a rate table that is similar in structure to those for Married and Single. Press the Head of House button.
14. Enter the rates from Table 7-ANNUAL Payroll Period, part (a) SINGLE or MARRIED Without Spouse Filing Certificate, in the section called Tables for Percentage Method of Advance EIC Payments in Circular E. The last line of this table contains a reduction percent.
Enter TEN TIMES the table value. CCIS Payroll creates Table 7(b) automatically.
15. Check your entries and select OK when done.
16. Select Save to write the changes to the disk.
How to change FICA and Medicare
Here’s how to change FICA and Medicare:1. Choose Maintenance | Tax Tables.
2. Open FED in the Jurisdiction box and choose the Tab key.
3. Navigate to and change the values.
4. Select the Save button to save them.
How to print the tax tables
Follow these instructions to print a tax table:
1. Choose Maintenance | Tax Tables from the Main Menu.
2. Select a jurisdiction and select the Tab key.
3. Select the Print button.
Recording the FUTA rate and limit
CCIS Payroll keeps the FUTA rate and earnings limit in the Firm file. To change these values:
1. Choose Utility | Firm from the Main Menu.
2. Navigate to the FUTA area.
3. Type the new values. Remember to record percentages, not multipliers.
4. Select the Save button, or choose File | Save.
5. Select Exit or File | Exit.
Entering new SUTA rates and limits
Since SUTA rates are most commonly related to the claims experience of a Client, CCIS Payroll keeps SUTA rates and earnings limits in the Client Master File. Changing these rates and limits is not part of the Tax Table Service.
To change the SUTA rate or limit for a Client:
1. Choose the Clients link.
2. Choose File | Open from the menu, or the Open button.
3. Retrieve the Client.
4. Choose the Edit button, or File | Edit.
5. Choose the Payroll States tab. Make the required changes.
6. Choose the Save button, File | Save.