Solution Properties
Solution ID:
220924260102541
Last Modified Date:
Thu Mar 07 08:54:56 UTC 2024
Taxonomy Path:
Category//Transactions
Author:
[email protected]
How are North Dakota State Withholding (NDSWH) taxes calculated?
Description

Cause

Beginning in 2020 there are two different calculation methods that can be used for North Dakota withholding taxes based on the version of the W4 form. Note: All new employees hired in 2020 must use the new 2020 W4 form.

North Dakota relies on the federal Form W-4 for calculating the amount to withhold. The withholding calculation will be different depending on whether the employer is using the older Form W-4 (Employee’s Withholding Allowance Certificate) from years before 2020 or the new Form W-4 (Employee’s Withholding Certificate) for years 2020 and after.

The federal W4 form changed in 2020. This resulted in changes to Payroll that are included in Sage 300 Construction and Real Estate versions 18.4.1 and above and new H2, S2 and M2 filing statuses included in Payroll tax updates PTUS 20.01 and above.


Resolution
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The tax tables associated with the Filing Status set on the North Dakota (ND) Employee State record will be used to calculate withholding taxes for North Dakota.

Note: North Dakota State Withholding (NDSWH) Effective date: January 2, 2020, the tax tables have changed for all filing statuses.

For Forms W-4 before 2020: Exemption allowance has increased to $4300 for all filing statuses

For Forms W-4 for 2020 and after: Exemption allowances have been removed. Use H2 filing status for Head of Household on the Employee State setup (and do not check Use Federal) for those employees who are Head of Household:

  1. From the Payroll Setup menu, select Employees.
  2. Select the applicable employee and click State
  3. Select ND:
    • Clear the Use Federal checkbox
    • Enter H2 in the Status field.
  4. Click Accept, then click Save.

IMPORTANT: IF any employee in North Dakota has submitted the new 2020 W-4 form, and you are not on Version 18.4.1 Update 3 or higher, you must download the most recent version so that the North Dakota state withholding (NDSWH) is calculated correctly. DocLink: Download 18.4.1 Update 3 for Sage Construction and Real Estate

See KB 24201 DocLink: What are the recent tax changes for North Dakota? for further information regarding North Dakota payroll tax changes.




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