California Income Tax Tables

[Flemingtl]

I am having a problem setting up payroll in California.
California has a "Low Income Exemption Table", Table 1.
The PC+ Tax Table setup does not have a box to enter the information from this table.

My CA income tax WH is not showing the correct amount until I put in a gross paycheck over these thresholds.
Any suggestions on how to handle this?

Thanks for your time!
Terry

[NeilZ]

I am having a problem setting up payroll in California.
California has a "Low Income Exemption Table", Table 1.
The PC+ Tax Table setup does not have a box to enter the information from this table.

My CA income tax WH is not showing the correct amount until I put in a gross paycheck over these thresholds.
Any suggestions on how to handle this?

Thanks for your time!
Terry

Did you follow the information in this Knowledgebase Article when setting up your California tax withholding items? http://powerchurch.com/support/kb/kbvie ... icle_id=96

Evidently this is the same way it was setup for 2010, so the system should take into account that anyone earning less than $12K (or so) will not have taxes taken out.

Remember, this system works based on the annual income.

[Flemingtl]

Yes, I had followed those instructions exactly and everything in my system matches those tables according to the 2011 Employer's Guide from the State of Calif.

However, neither the setup in PC+ nor this Knowledge Base article addresses the "other" Table 1 - Low Income Exemption Table which says for example that a Single person being paid $12,182 per year should have no withholding.

As I said, all my boxes are filled in exactly like the instructions (except with the new numbers for 2011) but there is no box in the setup asking for the numbers from Table 1??

[NeilZ]

Yes, I had followed those instructions exactly and everything in my system matches those tables according to the 2011 Employer's Guide from the State of Calif.

However, neither the setup in PC+ nor this Knowledge Base article addresses the "other" Table 1 - Low Income Exemption Table which says for example that a Single person being paid $12,182 per year should have no withholding.

As I said, all my boxes are filled in exactly like the instructions (except with the new numbers for 2011) but there is no box in the setup asking for the numbers from Table 1??

I suspect you may not need it. That said, is there anyone reading this from California who can chime in ?? If not, you may have to wait until Monday to get a definitive answer from the techs!

[Flemingtl]

Yes, I'm afraid I do need it.
According to the Table 1 Low Income Exemption chart, the low income exemptions for Single are:
Weekly: $234
Biweekly: $469
Semi-Monthly: $508
Monthly: $1015
Quarterly: $3046
Semi-Annual: $6091
Annual: $12,182

When I process a semi-monthly paycheck in Quickbooks with gross at $507, it holds no state tax. PC+ holds $4.52
If I change the gross to $508, QB holds $4.55 and PC+ holds $4.55 as well. As you can see from the chart above, the error is coming from the lack of the input for the Low Income Table.

So yes, if anyone else from California is doing Payroll with PC+, please let me know how you do this.
THANKS!

[NeilZ]

Yes, I'm afraid I do need it.
According to the Table 1 Low Income Exemption chart, the low income exemptions for Single are:
Weekly: $234
Biweekly: $469
Semi-Monthly: $508
Monthly: $1015
Quarterly: $3046
Semi-Annual: $6091
Annual: $12,182

When I process a semi-monthly paycheck in Quickbooks with gross at $507, it holds no state tax. PC+ holds $4.52
If I change the gross to $508, QB holds $4.55 and PC+ holds $4.55 as well. As you can see from the chart above, the error is coming from the lack of the input for the Low Income Table.

So yes, if anyone else from California is doing Payroll with PC+, please let me know how you do this.
THANKS!

I think the question boils down to this:

What is the person's annual wages ?? Are they single (or married two incomes, or married two jobs), married or single head of household ?? How many exemptions, if any, are they choosing ??

A lot depends on how the system processes this data. If you could let me know what the salary or paycheck is I can test it out on my test system here, and may be able to let you know something before Monday when the techs get into work.

I see you're talking about a semi-monthly paycheck ... I take it payday is 24 times a year, on the 15th and end of the month ?? This is the way my wife is paid, and the gross is based on the annual salary, so what's the annual salary ?? Or is this person hourly, and the rate is based on an hourly wage, using 80 hours ??

[Flemingtl]

The amount of this person's actual pay really doesn't matter. I am trying to make sure that the calculations for every paycheck will be correct no matter what this person's actual pay is now or another new employee in the future. If the hypotheticals are right, then the actual checks will be too.
What happened is that the first check I put in PC+, I confirmed the withholdings against Qbooks and they were different. PC+ holds out State tax when it shouldn't.
On a semi-monthly, 1st and the 15th checks, claiming married w/0 ded. for the Federal and Single w/0 ded for State, I kept adjusting the gross upward in Quickbooks until it would hold out State tax. That number was at $508. After $508 and up, PC+ and Qbooks match.
So based on the Ca State Table 1 for Semi-Monthly the exemption is $508 and PC+ is not picking that up.

Thanks so much for the help!

[NeilZ]

I just did a test using a semi-monthly (24 pay period) paycheck of $507, and I got the same results you did. Powerchurch came back with a $4.52.

When I added an allowance, which evidently the California DE-4 requires as a minimum, the rate went to $0.00.

When I raised the salary to $508 & no allowance, Powerchurch came back with $4.55, when I added the 1 allowance, it returned a $0.01 withholding.

Looking at the CA withholding rates pamplet, there is this note:

Employers may determine the amount of income tax to be withheld for an annual payroll period and
prorate the tax back to the payroll period. This method may be useful to employers who have employees
being paid for more than one payroll period and want to conserve computer memory by storing only the
annual tax rates, wage brackets, deduction values, and tax credits.

This is the way Powerchurch does its tax computations. Do you have that one allowance claimed on the state tax item ??

[Flemingtl]

Well that certainly is closer except at $508, the State Tax of .01 is supposed to be $4.55. Or, if it was a $509 gross it should be $4.57 and going up from there.

Any thoughts?

[NeilZ]

Well that certainly is closer except at $508, the State Tax of .01 is supposed to be $4.55. Or, if it was a $509 gross it should be $4.57 and going up from there.

Any thoughts?

Remember, this works on an annual basis, so its working on an annual salary of 12,192, then you subtract that one allowance, and so on. Its getting late here, so I'll try to figure this tomorrow

[Flemingtl]

OK, thanks!
I appreciate it!