US Tax

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Maintain work-related tax areas
In this step, you define work tax areas not included in the standard SAP system. Work tax areas are used in Infotype 0208 (Work tax area).

Example
AL0G (Birmingham, Alabama)

Since Alabama contains both city and county tax authorities, only the higher level of the two, counties, are loaded. For example, residence tax area AL0H (Jefferson County, Alabama) is loaded during the load process, but city tax authorities within Jefferson County are not loaded. Therefore, if you have employees working in such a city, you would have to create a new tax area here that includes the required city tax authority as well as the county, state and federal authorities.

Standard settings
The SAP standard provides tax areas that include the state tax authority and the highest level local authority within the state. For example, in Pennsylvania, many city tax authorities exist within county tax authorities. The delivered tax areas only include counties. For employees subject to city taxes within county tax authorities, you need to build new tax areas that include the cities (or any lower-level authorities such as school districts). You can then assign the new tax areas in Infotype 0208.

Recommendation
SAP recommends that you check that this view contains all localities required by your organization. Also, SAP recommends that tax areas not be deleted once the system is in use since they may be used in infotypes.

Activities
1. Enter the name of the lowest level tax authority to be included in the new area in the Tax Area field.
2. Enter the validity period for which the area should include the authority.
3. Enter the name of the state to which the area belongs.
4. Save your entries.

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IMG Path & Table: Tax Areas

In the following steps, you check and maintain residence and work tax areas valid for your organization. If your organization requires any areas not loaded by default, or if you created any custom tax authorities in the step maintain custom tax authorities then you must maintain all of the tax area steps in this section.


Path: Payroll -> Payroll: USA -> Tax -> Tax Data Maintenance -> Tax Areas -> Maintain work-related tax areas


Table: T5UTB

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Path: Payroll -> Payroll: USA -> Tax -> Tax Data Maintenance -> Tax Areas ->
Maintain tax authorities per work tax area

Table: T5UTW

In this step, you assign tax authorities to the work tax areas you defined in the previous step:

Example

Tax Area	Authority
AL0G	AL (State of Alabama)
AL0G	AL0G (Birmingham)
AL0G	AL0H (Jefferson)

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Recommendation
SAP recommends that you check that all work tax areas include the required authorities and that tax areas are not deleted once the system is in use, since they may be used in infotypes.

Activities
1. Enter the name of the lowest level tax authority to be included in the new area in the 'Tax Area' field.
2. Enter the name of the authority to be included in the area.
3. Enter the validity period for which the area should include the authority.
4. Repeat activities until all authorites have been included for the new area.

Further notes
Remember, the Federal tax authority must not be included in work tax areas.
When adding or removing authorities from tax areas, remember that every employee assigned to the area will be affected.

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Path: Payroll -> Payroll: USA -> Tax -> Tax Data Maintenance -> Tax Areas -> Maintain zip code ranges per work tax area

Table: T5UTG

In this step, you assign zip code ranges to new work tax areas. You may also maintain zip code ranges for existing tax areas

Note: IT0208 is proposed with applicable tax authorities from this table based on the zipcode in the employee’s address - IT0006

Example

Area Zip.............. Code Range
AL0G (Birmingham) 35200-0000 to 35299-9999