It's a sad but true fact that eventually you're going to have an employee with an IRS Levy. How do we handle this in Abra? Here's how:
From the Activity Center, select Payroll, Rules and Tax Codes. Add a LEVY Tax Code, making sure the Tax Code and the Tax Table ID say LEVY. On the Taxable Earnings tab, be sure to select all applicable Earnings Codes.
From the Activity Center, select Payroll, Rules and Deduction Codes. Add a LEVY Deduction Code. The Calculation Rule must be 'Flat Amount' and the Deduction Type must be 'Federal Levy'. Also make sure that there is an Earnings Basis for the deduction.
From the Activity Center, select Payroll, Details and Tax Withholdings. Add the Levy Tax Code to the same employee and be sure to complete any other needed items for the Tax Code (Exemptions, etc...).
The following table is used for the Filing Status for the Levy Tax Code.
Single - Single
Married Filing Joint Return (and Qualifying Widowers) - Married
Unmarried Head of Household - Head of Household
Married Filing Separate Return - Other
The Federal Levy is calculated by Abra based on Publication 1494 from the IRS. This publication may be obtained from the IRS here. The Levy amount is calculated internally and the correct amount will be withheld from the employee's check as a deduction which can then be paid to the IRS.
NOTE: Any earning that is set up as a Tax Only, Not in Check will not be included in the check amount after the Levy. For Example, an employee claiming Married and 2 exemptions should have 719.23 biweekly exempt from Levy (based on the 2009 tables). However, if they have a tax only, not in check earning of 150.00, it will show a net check of 569.23.
If it is necessary to withhold a specific flat amount for the Federal Levy, set up a new deduction code with a Deduction Type of Regular Withholding After Taxes and a Calculation Rule of Flat Amount. Add the new deduction code to the employee's Deduction panel and specify the correct amount there.
Posted by: Tim Ross
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