Residence Tax Area
Use these procedures to create or maintain the tax area based on the employee’s residence. Residence Tax Area is used to identify the tax area and tax authorities that are applicable to the employee based on where they reside.
Washington, Oregon, and Idaho are the only tax areas configured in HRMS. For employees who reside outside of Washington, Oregon, or Idaho, the tax area should remain as WA and any out-of-state taxes will need to be calculated and collected manually. Setting the tax area to Washington will turn on federal taxes for the employee, unless they are systematically excluded from federal taxes.
Refer to the Out-of-State Employee Coding Guide and HRMS Data Definitions Resource Guide for more information on which taxes are controlled by this infotype.
Out-of-state (OOS) Residence Tax Area records must be updated to return the employee back to the state of Washington by the losing agency when an employee transfers to a new agency, when an employee separates, or when an employee stops residing in Oregon or Idaho. Follow the Additional Steps for Out-of-State Employees – End Out-of-State Employee user procedure for more information.
The only exception is if the gaining agency has communicated to the losing agency that the employee will continue living out-of-state and the gaining agency is fully configured for the applicable OOS taxes and has requested the OOS tax infotype records remain active.
Agencies will not be able to save an Oregon or Idaho tax area unless they have completed the Additional Steps for Out-of-State Employees – Set-up Tax Company for OOS Tax Processing procedure first.