How to use the .IRS LEVY data item

If your organization receives from the IRS Form 668-W Notice of Levy on Wages, Salary, and Other Income, you may use .IRS LEVY to determine what portion of the employee’s wages is subject to the levy. This data item, along with its associated data items, will track:

• The total amount of IRS levies an employee is subject to and the remaining balance of the levy owed to the IRS.
• The cumulative amount of the levy repaid to the IRS by the employee (this amount crosses calendar years).
• The total amount of an employee’s “take-home pay” as defined by the IRS.
• The total amount of employee voluntary deductions that were elected by the employee, after the Form 668-W was received by the employer, or that are disallowed by the IRS.
• The amount of any increases or decreases mandated by the IRS to the total amount levied against the employee’s wages.

Your organization must send the amount of the levied wages from the employee to the IRS.  Complete Part 3 of the form, attach it to a check made payable to the IRS. You must continue to withhold the levy amount until the levy is repaid or you receive a release of levy, Form 668-D, Release of Levy/Release of Property from the IRS.

If additional IRS levies for the employee are received, add the additional amounts to the levy amount on the employee’s record.

Review the comments for .IRS LEVY and its associated data items on the PYSETUP-Setup List report from Report Manager. See IRS Form 668-W or contact the IRS for complete instructions on your responsibility to comply with the levy.

1.  UPDATE .IRS BAL BEFORE USING .IRS LEVY.

After you add .IRS LEVY to your system, you must proceed to the Processing, select Periodic Processing, select Update Data Items From Toolbox task and update the new .IRS BAL data item.  This will ensure that references to .IRS LEVY, contained in .IRS BAL, are acknowledged.

If you do not update .IRS BAL before you process a payroll that includes .IRS LEVY, you will receive an error (Error 153) when you calculate net pay. If you receive this error during the calculate net pay and the payroll includes an employee with .IRS LEVY, perform the above update to .IRS BAL and calculate net pay again. 

2.  TAXABLE BENEFITS.

There are two types of taxable benefits that are calculated by FundWare:

• TAX BENE—Benefit data items that are accumulated by TAX BENE are added to an employee’s state and federal taxable wages and wages subject to income tax withholding.  Withholding is performed on the total taxable wages.
• NOTAX BENE—Benefit data items that are accumulated by NOTAX BENE are added to an employee’s taxable wages only for federal withholding and certain states (currently AL, CA, CO, IA, IN, ID, KY, LA, MI, MN, MT, NE, NJ, NY, OH, OK, OR and VT; others are scheduled to follow).

See IRS Publication 15-B Employer’s Tax Guide to Fringe Benefits or contact the IRS for complete instructions on your responsibility to withhold income tax on fringe benefits.

Taxable benefit items must be added to either TAX BENE or NOTAX BENE—not both. See the PYSETUP Setup List for instructions on how to add a data item to TAX BENE or NOTAX BENE.

Environment

 7.60.1007

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