How to set up Federal Personal Tax Credits
We have enhanced the way our system is able to handle how you process Federal Personal Tax Credits. Previously, tax credited was based on a static amount of $13,229.00. We have recently made changes to our system to provide Federal Personal Tax Credits based on the employee’s salary.
Federal Personal Tax amount calculation can be changed from the employee tab.
1. To see these changes, click on Employee and select Edit beside the employee’s name.
2. Select the tax tab and under the Personal Tax Credit, the existing 2020 federal tax will default as the basic personal amount of $13,229.00. To change the Personal Tax Credit amount, click Edit.
3. Under the Personal Tax Amount Type, select one of the following:
Maximum additional amount: $13,229.00, should be applied for annual income below $150,473.00
Minimum additional amount: $12,298.00, should be applied for annual income above $214,368.00
Calculate: For annual income between $150,473.00 and $214,365.00
4. Click Save to make changes.
If you choose to Calculate based on your net income you will see a note indicating the following: “Note: Federal basic personal amount may be lower, depending on the employee’s salary”. This is because the Federal basic personal amount is being calculated based on a formula that varies on the employee's salary.
How to view Federal Personal Tax Reports
There are two different ways you can view Federal Taxes: Employee Tax & Compensation Report or Employee Details.
Both reports have been updated to include Federal Personal Tax Credits.
Employee Tax and Compensation Report
On the Employee Tax and Compensation Report a new column 'Personal Tax Amount Type' was added to the left of the Federal TD1 column to display the Basic Personal Federal Tax Amount option selected on the Employee Tax Screen.
1. To view this report, click on the Reports tab, under the Custom Reports select Employee Tax and Compensation
2. Select the employee and click Submit.
3. On the Custom Reports screen, the Federal TD1 column will be updated with federal tax credit amount to reflect the selected option on the Tax Screen.
- Minimum Personal Federal Tax Amount: Should be applied for annual income above 214,368.00;
- Maximum Personal Federal Tax Amount: Should be applied for annual income below 150,473.00;
- Calculate: For annual income between 150,473.00 and 214,368.00.
The Federal TD1 column will continue to display the Basic Personal Federal Amount for the employee.
The Personal Tax Amount Type column will show how the Personal Amount tax is being calculated.
Employee Details Report
In the Employee Detail Report, a new column 'Personal Tax Amount Type' was added to the left of the Federal TD1 column to display the Basic Personal Federal Tax Amount option selected on the Employee Tax Screen.
1. To view this report, click on the Reports tab, under the Custom Reports select Employee Details.
2. Select the employee and click Submit.
3. On the Custom Reports screen, the Personal Tax Amount Type column will be updated with federal tax credit amount to reflect the selected option on the Tax Screen.
- Minimum Personal Federal Tax Amount: Should be applied for annual income above 214,368.00.
- Maximum Personal Federal Tax Amount: Should be applied for annual income below 150,473.00.
- Calculate: For annual income between 150,473.00 and 214,368.00.
The Federal TD1 column will continue to display employee the Basic Personal Federal Amount for the employee.
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