2020 Federal Tax Changes

Updated: October 22, 2020

The U.S. Federal Government has made significant changes to the Federal Tax calculations for 2020.

Normally, any changes for the new year are simply entered in Tyler Payroll using the information provided in the Employer’s Tax Guide (Circular E).

However, in order to meet the IRS’s requirements, this year’s changes required extensive modifications to the Tyler Payroll application.

In July of 2017 we sent out a letter stating that we would no longer be making major changes to the Tyler Payroll application. We explained that you could continue to use it, but we also suggested that you consider finding a third-party payroll provider.

After careful consideration, we have decided to make an exception for this year. Our programming department has spent many hours developing and testing the 2020 changes required by the IRS.

Because of this, we are charging a one-time fee of $250.00 to any Tyler user that wants to implement these changes on their system. If you would like to install the Payroll updates for 2020 for a one-time payment of $250.00, please email us at support@tylernet.com.

 

Table of Contents

 

Steps for ALL Tyler Payroll Users

Whether or not you are paying the fee to install the 2020 Tyler Payroll updates, you must complete the following step.

  1. In the Federal Income Tax selection (10-35), set up the tax tables for Single and Married employees for the ‘Annual’ (AN) pay period. This information can be found in the ‘Standard Withholding Rate Schedules’ of the ‘Percentage Method Tables for Automated Payroll System’ section of Publication 15-T.

    IMPORTANT: Do not use the ‘Checkbox, Withholding Rates Schedule’ for this step as it is not supported.

    IMPORTANT: If the tables are not set up when the updates are installed, the payroll program will error.

 

Steps for Tyler Payroll Users Implementing the 2020 Updates

If you approved the fee to receive the 2020 Tyler Payroll updates, you must complete the following steps.

  1. A new field, ‘New/Adjusted W4,’ has been added to the ‘Employee’ tab of Employee Master/Special/Deduction (10-20) that determines if the 2020 W4 should be used. Select ‘Yes’ for all employees who are new to the company in 2020 or for current employees who have adjusted their W4 in 2020.

    NOTE: This field is visible to everyone. Only those who have paid for the updates will be able to access it.

  1. There is a new field, ‘W4 Dependent Amount,’ on the ‘Special’ tab of Employee Master/Special/Deduction (10-20). It only applies to employees who have the ‘New/Adjusted W4’ field on the Employee Tab set to ‘Yes.’ For all applicable employees, enter the dollar amount from Step 3 of the 2020 W4. This is a tax credit and is deducted from Federal Income Tax, not salary wages.

  1. Enter the ‘Single Deduction’ and ‘Married Deduction’ amounts in the F.I.C.A & F.U.T.A. Maintenance selection (10-33). These fields are used for employees new to the company in 2020 or current employees who made changes to their W4 in 2020. This amount is deducted from gross wages before calculating tax and can be found in Step 1g of the ‘Percentage Method Tables for Automated Payroll System’ section of Publication 15-T.

  1. In the ‘Annual’ (AN) section of the Federal Withholding Allowance selection (10-34), enter the annual exemption amount. This amount can be found in Step 1k of the ‘Percentage Method Tables for Automated Payroll System’ section of Publication 15-T.

  1. In the Federal Income Tax selection (10-35), set up the tax tables for Single, Married, and Head of Household for the ‘Annual’ (AN) pay period. This information can be found in the ‘Standard Withholding Rate Schedules’ table in the ‘Percentage Method Tables for Automated Payroll System’ section of Publication 15-T.

    IMPORTANT: Do not use the ‘Checkbox, Withholding Rates Schedule’ for this step, as it is not supported.

  1. If you are using Step 2 on the 2020 W4, you must select option ‘2a’ or ‘2b.’ In Tyler, enter the appropriate amount in the ‘Addl Fed Tax Amt’ field on the ‘Special’ tab of Master/Special/Deduction (Employee Master Maintenance, 10-20).

    IMPORTANT: Do not check option ‘2c’ as it is not supported.

    IMPORTANT: Do not enter amounts in Step ‘4a’ or Step ‘4b’ as these fields are not supported.

Leave A Comment