Payroll Support

On June 9, 2009, the Hawaii Department of Taxation published a supplemental insert to the 2009 Annualized and Alternative Income Tax Withholding Formulas.  The revised Withholding Formulas are effective January 1, 2009.

Background

The revised Withholding Formulas will increase the withholding tax calculations for employees with incomes exceeding the 7.60% tax bracket. This change is based on the Hawaii Legislature over-riding the Governor?s veto of HB 1747.  No adjustments are necessary, nor are required by the agency, for tax withheld prior to using the updated calculations.  The agency is requesting that employers begin using the revised Withholding Formulas as soon as possible.

Frequently Asked Questions

Who is affected?
You may be affected if you currently withhold Hawaii income taxes from employees and make withholding tax payments in the State of Hawaii or if you currently have a valid Hawaii Department of Taxation ID Number.

When will these changes be available in QuickBooks?
Intuit QuickBooks Payroll will modify the withholding tax tables in the next Payroll Update, #20917, to be released the end of June 2009.

Do I have to adjust withholding tax calculations done prior to installing Payroll Update #20917?
You do not need to make any adjustments to withholding taxes that were calculated using the prior withholding tables.  The agency has stated no retroactive adjustments are necessary for prior income tax withholding.

What do I need to do?
You will need to download and install Payroll Update #20917 as soon as it is released so the correct amount of Hawaii withholding taxes will be calculated and withheld from affected employee paychecks from that date forward.  If you have Automatic Updates turned on and have selected all updates to download automatically, your QuickBooks software will download and install the update for you.  If you do not have Automatic Updates turned on, you can download this payroll update manually.  For more information on how to download and install a Payroll Update, click here.

Since withholding tax calculations do not self adjust in QuickBooks and the revised Withholding Formulas will increase the state withholding tax for higher wage earners, employers may want to ask their employee(s) if they want to adjust their withholding tax on future payroll checks.  If the employee(s) chooses to adjust their future withholding tax, they will need to complete a new Form HW-4 for state withholding.

What about subscribers to the QuickBooks Disk Delivery service?
The next Disk Delivery is scheduled for mid-August 2009.  Disk Delivery service subscribers who have internet access may want to download Payroll Update #20917.  For more information on how to download and install a Payroll Update, click here.