Warnings:  

If you are making a tax self-adjusting for error correction such as over taxing it is important to note the following:  

• A self-adjusting tax will not create negative tax amounts on checks. 
• It will simply not generate any tax until to the YTD subject-to wages multiplied by the tax rate is higher than the amount of tax already calculated. 
• If employees have already reached the limit for taxable earnings, the tax will need to be adjusted manually through Enter Checks. 
• Incorrect setup of a self- adjusting tax can cause incorrect amounts to be withheld and paid to the tax authorities, which may result in fines. Consult your tax accountant or tax attorney to assist in determining if you want to alter a tax to self-adjust.
• If you change an employee tax to self-adjust, that may result in a significant amount of tax being withheld on the next paycheck for the employees. The tax may continue to self-adjust on the next several checks that an employee receives until the correct total has been withheld.

Create formulas and change the tax setup:

1. Create self-adjusting tax formulas, like the examples below:

   Notes:

   • Modify these example formulas and formula names to match your company tax ID.
   • This example is only a template for the creation of self-adjusting formulas. The example uses the tax rate specified in the Setup, Taxes, Tax Rates and may not reflect the current rate for the FUTA_E tax.
   • The formulas may vary based on the tax requirements, the company set up, and the reason that the taxes need to self-adjust.
   • Update taxes may not correctly update taxes set up to self-adjust with this method.
   • Do not change taxes that use a table to self-adjust.
   • If you use the transfer tax fields, create the first three formulas. If you do not use transfer tax fields, create the fourth formula in the table.
     To see the transfer tax fields, got to Setup, Employee, select Tax and scroll to the end of the table.
   • Be aware that if there are more than one check per employee residing in the new.prt the tax amount can calculate incorrectly.

   Formula ID	Formula	Notes
   PRFUTA_E_YTDSUBJ	Lookup (YTD Subject-to [PR Employee Tax], Employee [PR Check], 1, "FUTA_E") + Lookup (Transfer Subj-to [PR Employee Tax], Employee [PR Check], 1, "FUTA_E")	This formula retrieves the year-to-date subject-to amount. In this example, "FUTA_E" is the tax ID for the tax that will self-adjust. The 1 in the formula represents the tax level (1 = Federal, 2 = State, 3 = City).
   PRFUTA_E_YTDTAX	Lookup (YTD Tax [PR Employee Tax], Employee [PR Check], 1, "FUTA_E") + Lookup (Transfer Tax [PR Employee Tax], Employee [PR Check], 1, "FUTA_E")	This formula retrieves the year-to-date tax paid amount. In this example, "FUTA_E" is the tax ID for the tax that will self-adjust. The 1 in the formula represents the tax level (1 = Federal, 2 = State, 3 = City).
   PRFUTA_E	PRFUTA_E_YTDSUBJ [Public Formula] * Lookup (Percent [PR Tax], "FUTA_E") - PRFUTA_E_YTDTAX [Public Formula]	This is the formula that actually calculates the tax. This formula uses the amounts calculated by the other two formulas to change the rate to the rate to the rate that is specified on the tax rate setup in Setup > Taxes > Tax Rates and self-adjusts back to the beginning of the year.
   PRFUTA_E	Lookup (YTD Subject-to [PR Employee Tax], Employee [PR Check], 1, "FUTA_E") * Lookup (Percent [PR Tax], "FUTA_E") - Lookup (YTD Tax [PR Employee Tax], Employee [PR Check], 1, "FUTA_E")	This formula calculates the tax. Use this formula if you do not use the transfer fields on the master file. In this example, "FUTA_E" is the tax ID for the tax that will self-adjust. The 1 in the formula represents the tax level (1 = Federal, 2 = State, 3 = City).

2. These formulas listed use the percentage from the tax ID (found under Setup, Taxes, Tax Rates).
3. Select the formula that calculates the tax in the Formula box on the tax ID under Setup, Taxes, Tax Rates. (in the example above, PRFUTA_E would be the formula selected).
4. Click Save and then click Close.