Entering an Employee's Tax Form W-4 Withholding Allowance Certificate in HRS

Overview

This document explains how to add Tax Form W-4 Employee's Withholding Certificate in PeopleSoft HRS for a new employee and update W-4 tax status for existing employees. Form W-4 is used to withhold the correct federal and state income tax from the employee's pay.

Click on the links below to skip directly to a section:

2. In the Update Employee Tax Data screen, enter the 8-digit employee ID in the Empl ID field, and click the Search button.

3. The Federal Tax Data tab displays for the employee. Verify the employee name and Person ID (also known as Empl ID).

4. For new hires, the Effective Date field automatically displays the hire date of the employee. The text, "This data was last updated by Hire Procss" (e.g. Hire Process) indicates the employee is a new hire.

5. To add a new effective date row, click the plus icon, located in the Effective Date section.

A new row must be added to document a Form W-4 was received, even if the new Form W-4 matches existing data in HRS. 

6. In the new Effective Date field, change the current date to the day after the hire date (e.g. hire date plus 1 day).

7. In the Federal Form W-4 Version section, select the 2020 or Later radio button to enter a new Federal Form W-4. If updating ONLY state tax data for 2020 or later, keep the federal tax page with the current form and skip to the state section below.

8. In the Federal Withholding Elements section:

Select the correct *Special Withholding Tax Status

a)  Default value is None. This means no special status exists and that federal withholding tax should be calculated based on the employee's gross income, marital status, and withholding allowance. (This option applies for most employees).

b) No Taxable Gross, No Tax Taken option - Employee does not have reporting and withholding obligations with the U.S. Federal government.  (This is not a common option). One example would be for non U.S. Citizens or foreign nationals who are working for the University in a foreign country and are not required to file federal tax in the United States.

c) Maintain Taxable Gross - Employee has to report taxable wages to the U.S. Federal government, but tax does not have to be withheld from the employee's wages. Two examples are:

9. Select the correct Tax Status, default value is Single. Select an option to indicate the employee's marital status for federal withholding. This should match what is on the employee's W-4 form: Single, Married, or Head of Household.

10. In the Dependent Amount field, enter the flat dollar amount of dependents from the employee's Form W-4 on line 3.

11. In the Other Income field, enter the flat dollar amount of other income from the employee's Form W-4 line 4(a).

12. In the Deductions field, enter the flat dollar amount of deductions from the employee's form W-4 line 4(b).

13. In the Additional Amount field, enter the flat dollar amount of Extra withholding to be withheld per paycheck. This amount should match what is on the employee's Form W-4 line 4(c).

14. In the W-4 Processing Status section select: 

      ●  None - Select this option to indicate no change.

15. Notification Sent - Select to indicate that the employee has been notified to submit a new Form W-4.

16. New W-4 Received - Select to indicate that a new Form W-4 has been received.(Not applicable for first time entry)

17. In the Lock-In Details section verify if a lock-in letter has been received and entered by UW-Shared Services.
Letter Received checkbox - This is selected to indicate that the employee has received a lock-in letter from the U.S. Internal Revenue Service (IRS).

●  All lock-in letters are processed at Shared Services. A new W-4 can only be entered if it falls within this limitation. (ie. The employee defined a lower withholding allowance than the limitation, which will allow more tax withheld).

●  Limit On Allowances: (Default value is 0). The number that is entered is the amount defined in the lock-in letter as the employee's federal withholding allowance limitation.

18. The State Tax Options section is not used at the University of Wisconsin.

19. The Special Tax Form Renewal section is customized for the University of Wisconsin to record special tax forms for which an employee might file. It can be used in queries and in reporting to provide information for renewal purposes.

20. In the Tax Form Renewal field, click on the data lookup icon to display a list of special tax forms. 

21. In the Look Up Tax Form Renewal, Search Results screen, select the desired IRS special tax form (IRS Form 673 is the only form that applies on the Federal Page).

20. The selected form is displayed in the Tax Form Renewal field.

21. In the Tax Treaty/NR Data (NR represents Nonresident Alien) section, complete the fields below, as indicated on the employee's W-4 form, section titled, All International Visitors Complete the Following.

22. When finished entering information on the Federal Tax Data tab, DO NOT SAVE YET.  You will need to enter and/or verify information on the State Tax Data tab.

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Entering an Employee's State Tax Data from Form W-4 (New Hire)

To access the State Tax Data tab:

●  If your cursor is at the top of the page, click the State Tax Data

●  If your cursor is at the bottom of the page, you can click the State Tax Data hyperlink.

On the State Tax Data page, the Effective Date for the hire date plus 1 is copied over from the Federal Tax Data page. This is because the Federal Tax Data page and the State Tax Data pages are linked together.

1. In the State Information section, the WI default values pull in. For employees that work outside the state of Wisconsin the default values will need to change, see below for specific values depending upon state of work location.

Note: In PeopleSoft, an employee is required to have both a Resident State and a UI Jurisdiction State.

2. In the Special Withholding Tax Status, there are several options available:

• None (default value). This means no special tax status exists, and that State withholding tax should be calculated based on the employee's gross income, marital status, and withholding allowance. (This option applies for most employees).
• No Taxable Gross, No Tax Taken option - Select this option if the employee has indicated they are a resident of Indiana, Illinois, Michigan or Kentucky from Form W-4. Also select this option if the employee is living and working in a state other than Wisconsin.
  • If entering this tax status, the UW Special Tax Form field must be completed, detail below.
• Maintain Taxable Gross option - Select this option if the employee is exempt from State of Wisconsin withholding tax.  (On the employee's WT-4 form, this would be indicated on line 3). 
• Nonresident Alien option - Employee is a nonresident alien or claiming tax treaty.

4. In the Tax Marital Status, the default value is Single, enter the value that appears on the employee's WT-4.

●  If the withholding status is "Married but withhold at higher single rate", select S for Single.

●  If the employee is claiming exempt from withholding, their selection should be "X".

5. Enter the Withholding Allowances, the default value is 0, an employee claims for state withholding tax purposes, defined on WT-4 form line 1(d).

6. In the Additional Amount field - Enter the flat dollar amount of additional State Tax to be withheld per paycheck, defined on WT-4 form line 2.

●  Additional Allowances, only used with California residents.

7. In the Lock-In Details section:

●  Letter Received checkbox - This is selected to indicate that the employee has received a lock-in letter from a state's Department of Revenue (All lock-in letters are processed at Shared Services)

●  Limit On Allowances: (Default value is 0). The number that is entered is the amount defined on the lock-in letter as the employee's State withholding allowance limitation.

8. The Tax Form Renewal Processing Status section lists options to indicate the workflow status of the State Exempt form renewal status.

9. The UW Special Tax Form Code section is customized for the University of Wisconsin to record special State tax forms for which an employee might file. This field must be completed if an individual claims NTT/NTG on the Wisconsin State Tax page.  If this section is completed you MUST check the Non-Residency Statement Filed checkbox.

●  In the Look Up Tax Form Renewal, Search Results screen, select the desired special State tax form. 

"02" = WI W-200: Form W-200, Certificate of Exemption from Withholding for Prepayment of Estimated Tax (if the employee is claiming exempt status for •  WI tax). 
"03" = WI WT-4A: Wisconsin Employee Withholding Agreement (if the employee submits this form with their W-4) 
"04" = WI W-220: Non-Resident Employee's Withholding Reciprocity Declaration (if the employee claims a State Reciprocity on the University's W-4 form). 

"05" = IL-W-5-NR: Statement of Nonresidence in Illinois.
"06" = CA DE-4: Employee files a CA DE-4, see California tax section below for more instructions.
"07" = Wisconsin Non-Resident working outside of WI. If the employee identifies on the Supplemental Form W-4 that they are working out of state or submits another state's W4 form

10. To save the W-4 record for the new employee, click Save, located at the bottom of the screen.

Note: The Local Tax Data tab is not used.

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Entering State Tax Data for States other than Wisconsin

If Employee is a Legal Resident of Indiana, Illinois, Michigan or Kentucky (the employee would have checked one of the reciprocity declaration boxes on their W4) make the following changes:

1. In the State Information Section:

●  Uncheck the Resident box so that it is blank.

●  Check the box labeled, "Non-Residency Statement Filed"

Note: This option indicates the employee has filled out the proper paperwork for reciprocity, which can be found on the W-4 form or the separate Wisconsin Tax Form W-220 Nonresident Employee's Withholding Reciprocity Declaration).

2. In the Special Withholding Tax Status field select No Taxable Gross, No Tax Taken.

3. In the UW Special Tax Form Code section, select "04" for reciprocity form WI W-220.

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If Employee is a Legal Resident of Another State (Not IN, IL, MI, or KY) and works IN WI (employee would have defined tax residence location on W4 outside of WI, but work location as WI):

1. In the State Information Section:

●  Leave the default values "as is" (Resident and UI Jurisdiction checked)

2. In the Special Withholding Tax Status leave the default value of "None".

Note: Employees are liable for taxes in Wisconsin so the withholding is the same as if they were a Wisconsin resident.

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If Employee is a Legal Resident of Another State (Not WI, AZ, CA, CT, GA, IA, IL, IN, KY, MA, MI, MN, MT, NC, NE, SC, UT or VA) and Works OUTSIDE of WI (Defined tax residence AND work location outside of WI on W4, or W4 for any state not defined above:

1. In the State Information Section:

●  Leave the UI Jurisdiction checked and uncheck Resident

2. In the Special Withholding Tax Status select No Taxable Gross, No Tax Taken.

3. In the UW Special Tax Form Code Section:

1. Add a new State Page in Update Employee Tax Data.  It will default to WI, make the following changes on the WI row: 

• Uncheck the 'Resident' checkbox
• Validate that 'UI Jurisdiction' checkbox is checked
• Check 'Non-Residency Statement Filed' check box
• Special Withholding Tax Status should be set to No Taxable Gross; No Tax Taken
• In the 'UW Special Tax Form Code' section add the Tax Form Renewal code '06'
  
  

• Add a new row for IL 100% tax distribution for each employee record. Use the same effective date as W4 page.

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1. Add a new State Page in Update Employee Tax Data.  It will default to WI, make the following changes on the WI row:

• Update the 'State' field to reflect NE as the state to withhold for
• Check 'Resident' box
• Validate that 'UI Jurisdiction' checkbox is NOT checked
• In the State Withholding Elements section, select Special Withholding Tax Status of None
• Update Tax Marital Status based on NE Form W-4N (To the far right of the mailing address at top of the page)
  • Values T and U in HRS are not currently used 
  • NOTE: if Exempt is selected, update Special Withholding Tax Status to Maintain Taxable Gross
• Enter Withholding Allowances from W-4N, line 1
• Enter Additional Amount - if applicable, from W-4N, line 2
• Click SAVE

3. Enter Tax Distribution to NE 100% (employees are defaulted to WI).   Path: Payroll for NA/Employee Pay Data USA/Tax Information/Update Employee Tax Distribution

• Add a new row for NE 100% tax distribution for each employee record. Us the same effective date as W4 page.

If Employee is a Legal Resident and WORKS in South Carolina:

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If Employee is a Legal Resident OR WORKS in Utah:

Note: Utah uses the Federal W-4 form

If Employee is a Legal Resident of Virginia:

• Uncheck the 'Resident' checkbox
• Validate that 'UI Jurisdiction' checkbox is checked
• Check 'Non-Residency Statement Filed' check box
• Special Withholding Tax Status should be set to No Taxable Gross; No Tax Taken
• In the 'UW Special Tax Form Code' section add the Tax Form Renewal code '07'

2. Add a new row under 'State Information' section by clicking the 'plus sign' icon to enter VA withholding detail.

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If the Employee is an International Nonresident Alien for Tax Purposes: