Courtesy Tax Withholding in Patriot’s Online Payroll

April 11, 2018

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Background

Courtesy withholding is an optional service some Ohio employers choose to provide as a convenience to their employees.  The employer withholds and pays an employee’s local tax based on the employee’s residence.  This is not the same as a local tax required to be withheld based on the company worksite.

For example, if the employee works in City A and lives in City B, courtesy withholding would withhold local taxes from both City A and B. This will prevent the employee from having to pay City B’s taxes directly.  You will be able to set courtesy tax withholding for each employee you want to courtesy withhold.  For a full definition, see Courtesy Withholding in our Payroll Glossary.  For further reading, see our blog article What is Courtesy Withholding?

To Add Courtesy Tax Withholding for an employee in Patriot Software:

  1. Payroll > Employee List > Select Employee Name > Taxes > Edit
  2. Click Show Advanced Employee Tax Settings (bottom of page).
  3. Choose Yes for Withhold Courtesy Local Tax.
  4. Click Save.

If you choose to allow courtesy withholding, you may need to enter more information on the Tax Settings page for the additional local taxes from employee residences.  You will see a Missing Information warning prompting you to enter any new Tax Identification Numbers, SUTA rates, and/or tax deposit frequencies for these new courtesy local taxes.

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