Action Required: When you select Pay Employees in the Employees drop down menu, an Add Tax Mid-Year Wizard feature will appear in order to assist you with setting up this new surcharge tax. The Wizard will detect when there is a new surcharge tax in the tax table for an employee who is subject to State Unemployment Insurance for your state. An option to cancel out of the Wizard is available and no changes will be made to your file. (20604)

If you choose not to use the Add Tax Mid-Year Wizard, take the following steps: If you have included the Administrative Funding Assessment rate into your unemployment insurance rate, edit the DC - Unemployment Company payroll item and enter only your UI Contribution rate received from the state in the four boxes. Then add a new other tax payroll item and choose DC - Admin. Funding Assessment. As most employers will be liable for this surcharge, the rate will default to 0.2%. The agency will mail a bill to self-insured (reimbursable) employers each quarter for the administrative assessment due so you may select the rate of 0.0% in the drop down selection. Then set up the tax on the subject employees by choosing the Other tax tab and choosing the drop down under the Item Name and choose DC - Admin. Funding Assessment. (20604)

Note: If you still need to process paychecks with a date prior to 2006, you will want to wait to add this tax to your company file and employees. Otherwise, you will need to remove this tax from the applicable employees before creating a paycheck dated prior to 2006. You will then need to set the tax up again on the applicable employees prior to creating checks dated for 2006, in order to have the DC - Admin. Funding Assessment tax calculate correctly. (20604)

Action Required: Effective 1/1/2006, the Employee portion of the Health Care Subsidy Fund rate is 0.0000%. To insure that the rate is entered correctly, on January 1, 2006 or thereafter, from the Payroll Item List, choose NJ – Health Care Subsidy Emp, click Next to get to the Employee tax rates for 2006 screen. In the drop list, select 0.0%, click Next and then click Finish. (20601)

New withholding tables effective 1/1/2006. The annual withholding allowance remains $1,000, but Oklahoma now uses a Percentage Method Formula instead of the Computer Payroll System Formula. There are now only two tables used to calculate withholding: (1) Single (including head of household), or (2) Married. This means that the “Married-Dual Income” and “Head of Household” filing statuses have been removed. Since Oklahoma refers to the Federal Form W-4 to obtain the number of allowances and the filing status for an employee, a new status has been added “Married, using Single Rate”. Please refer to Publication OW-2 – 2006 Oklahoma Income Tax Withholding Tables. (20602)

Note: Per Publication OW-2, “Since Oklahoma married taxpayers are taxed on combined incomes, many married taxpayers do not have sufficient withholding to cover the annual liability. If a taxpayer has elected the option of “Married, but withhold at higher “Single” rate on the Federal Form W-4, use the appropriate Oklahoma Single Withholding Table. (20602)

Action Required: On or after January 1, 2006, but prior to creating paychecks for 2006, for each employee subject to withholding for Oklahoma, the filing status must be reviewed for accuracy. For each employee affected, on the employee record, under the State tab, check that the filing status matches what the employee has indicated on Line 3 of their Federal Form W-4, unless the employee is exempt from withholding for Oklahoma. If the status needs to be changed, please select the appropriate status, and then click OK twice. (20602)

Action Required: If you have company paid contributions set up for S Corp Medical, edit the AL – Withholding payroll item and click Next until the Taxable Compensation slide appears. Verify that the S Corp. Medical item is checked. If the S Corp Medical item is not checked, manually check the payroll item, and then click Finish. Then select the S Corp Medical payroll item, click Next until the Taxes slide appears. Verify that the AL – Withholding item is checked, then click Next twice, and then Finish.

If both the AL – Withholding and S Corp Medical payroll items were checked, no further action is required.

If you manually had to place a check mark for any one of these items, run a Payroll Checkup. The Payroll Checkup will process liability adjustments to the AL – Withholding wage base. (20608)