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This pay type will be treated differently for taxation purposes and according to the Federal rules. The tax amounts for Medicare and Social Security will be calculated during the initialization of the payroll and the Payroll Payments - Current program. No Federal, State, or OSDI tax amounts will be calculated. The software provides the ability to withhold city tax on this life insurance non-cash earnings payment. This can be activated by checking the "Tax Non Cash Earn" field on the city tax record on the Core>Payroll Item Configuration screen.
The life insurance Life Insurance premium non-cash earnings (NC1) amount will not be included in the Total Gross amount on the Pay Report or Pay Amount Summary Report. However However, the life insurance premium non-cash earnings amount will be included in the Adjusted Gross figure on the employee's payment because the amount is considered part of the taxable gross - (even though no tax is being withheld on it.) Both the Pay Report and Pay Amount Summary Report provide a total of all non-cash earnings in the Totals Section - NC1 total on the Pay Report and Other Pay on the Pay Amount Summary Report . This extra total will help with balancing.
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