2020-R5 Payroll Update

Please note that this will be the final update for the blog here for tax updates. Going forward please monitor LCS Issue search using keywords 2020 or 2021 and payroll. For Dynamics AX 2012 R3 you can continue to monitor CustomerSource for the latest tax update downloads as well as LCS. 

Work has begun on the 2020-R5 Payroll update, and it is in the final stages. All updates for Dynamics 365 Finance are now live, with the R3 update to follow shortly. The update will contain both application and binary changes. This update will contain support for both H.R.6201 and H.R.748, as well as a number of other updates. 

• H.R.6201 – Families First Coronavirus Response Act (March 18th, 2020)
• H.R.748 – CARES Act (March 27th, 2020)

The payroll update will be made available for download for Dynamics 365 and Dynamics AX 2012 R3 as soon as we can make the necessary changes reacting to the new payroll updates. 

Tax Updates

July 2020 (2020-R5) – KB 456072 (10.0.13), 10.0.12, and 10.0.11

Special Note: To account for the Families First Coronavirus Response Act (FFCRA), any custom wage type marked as tax exempt for ER_FICA and created with a reference code containing “FFCRA” will be treated as sick pay or family leave.

This will cause the custom wage to be exempt from ER_FICA (like how a normal custom wage would behave) but will still let it count toward the Social Security wage base as per FFCRA requirements. A regular exempt custom wage would not count toward the wage base.

IMPORTANT: Once you begin using this sick pay, you need to keep the custom wage in your code for the remainder of the year, even if there are no current payments for sick pay. This will ensure that the employee is not over-withheld.

See the below setup example for Dynamics:

· Navigate to Payroll >> Setup >> Taxes >> Tax Groups

· Create a new tax group called "FFCRA - FICA"

· Under "Tax codes that are in this group", add the USA-FED-ER_FICA tax code

· Navigate to Payroll >> Setup >> Earnings >> Earning Codes

· Create a new Earning Code called "FFCRA" with an "Hours" unit of measure

· Set the earning code rate basis to "Hours" as well, and the amount or multiplier to 1000

· Under "Tax Rule", set the tax method to custom and the tax group to the recently created CARES-FICA tax group and save

This change is the only direct effect in regards to employee tax calculations from FFCRA and the CARES act. For these two pieces of legislation the tax engine will only cover the employer social security exemption provided by the FFCRA. Additionally, the tax engine does not provide information about the Employee Retention Credit under the CARES act.

2020-R2

US Tax Table/Rate Changes and Corrections

· (MI) Mississippi tax tables updated

· (OH) Risingsun city tax added

· (OH) Washingtonville city tax increased

· (VI) Virgin Islands SUTA wage base increased

· (Multi-state) Illinois multi-state calculation corrected

· (Multi-state) Pennsylvania multi-state calculation corrected

2020-R2a

US Tax Table/Rate Changes and Corrections

· (Federal) Withholding Adjustment for Nonresident Alien Employees increased

· (KY) Tompkinsville OLF rate increased to 1.5%

· (MI) Michigan Obligation Assessment inactivated

· (PA) Erie city EIT non-resident rate increased

· (PA) Mount Wolf Borough EIT update reverted

· (WV) Madison City Service Fee update reverted

· (WY) Wyoming Workers' Compensation wage base increased

2020-R3

US Tax Table/Rate Changes and Corrections

· (AR) Arkansas state tax tables updated

· (IA) Administrative Surcharge Tax and Reserve Fund inactivated

· (MD) Minimum and maximum standard deduction updated

· (MI) Add list of accepted values for PREDOMINANT_CITY miscellaneous parameter

· (MO) Correct Missouri state tax behavior

· (NY) Fixed subject wages rounding for New York FLI

· (OH) Correct Alexander LSD tax to be “Earned Income Only”

· (OR) Oregon SIT flat supplemental rate decreased

· (OR) Oregon SIT standard deduction updated

· (OR) Oregon transit tax courtesy flag corrected

· (PA) Jeannette municipal resident EIT rates decreased

· (PA) New Britain Township municipal resident EIT rate increased

· (PA) Whitehall municipal resident EIT rate increased

· (DC) Update D.C. multi-state withholding

· (WY) Wyoming Workers’ Compensation wage bases updated

Other Improvements

· Corrected SIMPLE IRA combined maximum employee contribution

2020-R3a

US Tax Table/Rate Changes and Corrections

· (MI) Update regex and list values for PREDOMINANT_CITY misc. parameter

· (PA) Revert multi-state changes to PA

· (MISC) Inactive employer SUTA surcharges no longer returned

· (MISC) Correct gross wages for certain multi-state scenarios

· (MISC) Append unique identifier to log file names

2020-R4

US Tax Table/Rate Changes and Corrections

· (Federal) Accept ‘MH’ for federal filing status in 2020.

· (AR) Correct returned supplemental withholding rate to 6.6%

· (MD) Add state tax exemption flag for Pennsylvania residents

· (MA) Massachusetts PFML not calculating covered individuals correctly

· (MO) Combine FILINGSTATUS and SPOUSEWORKS misc. parameters

· (MO) Correct returned supplemental withholding rate to 5.4%

· (NE) Nebraska SUTA override wage base ignored

· (NE) Nebraska filing status MH option removed

· (NJ) Supplemental withholding corrected

· (NM) Add ability to enter deductions for New Mexico state tax

· (NY) Correct supplemental wages behavior for FLI

· (NY) Inactivate duplicate Butler-Stone Springs JEDD Tax

· (PA) Inactivate duplicate Butler-Stone Springs JEDD Tax

· (PA) Hereford Township (Upper Perkiomen School District) LST increased

· (PR) Correct typo in ADDITIONALVETERAN parameter

· (RI) Rhode Island SUTA override wage base ignored

· (VT) Rhode Island SUTA override wage base ignored

· (WY) Wyoming Employer Workers’ Compensation updated

· (MISC) Benefits and Miscellaneous Fixes Group Term Life imputed income no longer added to FIT

· (MISC) HSA employer contributions now added to resident state

· (MISC) Restore ste_get_tax_list & ste_get_tax_list_ext in logfile output

2020-R5

US Tax Table/Rate Changes and Corrections

· (Federal) Special custom wage added for ER_FICA for H.R.6201 (Families First Coronavirus Response Act)

· (CA) Update California multi-state withholding logic

· (CA) Add TOTALALLOWANCES miscellaneous parameter

· (CA) SDI supplemental withholding corrected

· (CT) Add REDUCED_WH_AMT miscellaneous parameter for Connecticut state tax

· (Guam) Update territory tax to match federal 2020 tax

· (IL) Illinois multi-state credit type changed to “difference”

· (KY) Elliott County OLF added

· (KY) Wheelwright OLF rate corrected

· (MD) All Maryland county and city non-resident rates increased to 2.25%

· (MI) Add PREDOMINANT_CITY default value

· (NJ) HCSF supplemental withholding corrected

· (NM) Correct DEDUCTIONS parameter in state tax calculation

· (Northern Mariana Islands) Update territory tax to match federal 2020 tax

· (OH) Coshocton city tax updated

· (OH) McComb city tax updated

· (OH) Sugarcreek city tax updated

· (PR) SDI supplemental withholding corrected

· (RI) SDI supplemental withholding corrected

· (VT) Correct Vermont filing status

· (Virgin Islands) Update territory tax to match federal 2020 tax

· (WA) Washington SDI returns reference code in description

· (DC) FLI supplemental withholding corrected

· (WY) Out of state wages are subject to Workers’ Compensation tax for WY residents

· (MISC) Add new option to zero out wages when tax exempt

· (MISC) Add “Combined” supplemental calculation method