Step_4._Set_up_pay_code_for_IRS_tax_levy

Step 4. Set up pay code for IRS tax levy

Set up a pay code for IRS tax levy to calculate the employee deduction. This pay code is created in the Pay Codes table at the Organization level. It's a general pay code that you will be able to customize when you add the IRS tax levy pay code to an employee. 

These instructions are for 2023. You may need to update the instructions if you are setting up the IRS tax levy for a different year. 

 

Setting up pay code for IRS tax levy

1. Open Connect Payroll > Organization > Pay Codes. 

2. Click New  (CTRL+N).

3. Set up Pay Code tab.

Pay Codes, Pay Code tab

  • Pay code: Enter the pay code for the IRS tax levy pay code. 

  • Sub code: Enter the sub code for the IRS tax levy pay code. 

  • Title: Enter the pay code name. Example: IRS Tax Levy

  • Abbreviated title: Enter the abbreviated title. Example: IRS TaxLev

  • Type: Deduction. 

  • State: None

  • Identification number: Blank

  • Add on new employee: Do not select. 

  • Allow employee options: Select the checkbox. 

  • Allow employer options: Do not select. 

  • Allow payout payments: Do not select

  • Use as summarization pay code: Do not select. 

 

4. Set up the Employee tab > Employee subtab. 

  • Amount/Rate/Percent type: Calculation

  • GL account: Enter a liability account. Partial accounts are allowed. Example: 02-22100

  • Calculation name: Single - IRS Tax Levy [More]

  • Employee allocation method: If you're using a partial account for the GL account, select Use Employee Allocations. Otherwise, use Do Not Allocate.

  • Monthly period numbers: Select ALL periods. (Click  and then click .)

 

5. Set up the Employee tab > Used in Calculations subtab. 

The Used in Calculations list should not include any pay codes. 

Pay Codes, Employee tab > Used in Calculations subtab

 

6. Set up the Employee tab > Used for Calculation tab. 

Add all of the wage pay codes subject to the levy, tax pay code, allowed voluntary deductions, and child support pay codes. Child support usually takes precedence over a levy.

Pay Codes, Employee tab > Used for Calculation tab

7. Click Save  (CTRL+S).  

 

8. Click Edit (CTRL+E). 

If the IRS tax levy pay code isn't showing, you may need to look up the IRS tax levy pay code again. 

9. Click Modify Calculation Order. 

Move the tax levy pay code to a position in the calculation order. Usually, the tax levy pay code is positioned just before the pay code for net pay. 

10. Click  (CTRL+F12). 

 

 

 

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