Garnishment: State Tax Levy

[Former Member]

Hello,

We have a requirement for the State Tax Levy wherein if there are multiple Garnishments, the Gross amount for the Garnishment with priority #2 should be derived after reducing from the Garnishment deduction of priority #1.

Below is an example to understand the requirement:

1. Employee has two Garnishments in a pay period - Child Support with priority #1 & State Tax Levy with priority #2.
2. Gross pay of the employee is $1000
3. Per the master data of the employee (IT1095), deduction for child support is set to $250 and deduction of State Tax Levy is set to 25% of gross
4. Garnishment calculation during the payroll calculation should be as follows:
   • Child Support - $250
   • Calculate new Garnishment Gross: $1000 - $250 = $750, where $1000 is the total gross and $250 is the child support deduction
   • Calculate State Tax Levy - 25% of Gross = 25% of $750 = $187.50

For the State Tax Levy, system is using 25% of $1000, but we need to use $750. We thought of using special rule, but the WT which stores the deduction of Child Support is not available until the end of UGRAN. Is there any easy way of achieving this requirement?

Thanks,

Mitesh

[Former Member]

Hello,

Anyone got the same problem and figured a solution on how the rule for Wisconsin State Tax Levy can be implemented?

Thanks,

Mitesh

[Former Member]

Mitesh, I have the exact same issue. Did you find a solution for the issue? Please let us know.

Thanks!

[Former Member]

I created a special rule in T5UGA and in this rule, I defined three fields that will be entered on IT195 when creating the State Tax Levy record.

First field will enable the user to enter any fixed deduction amount (mostly support), Second field is for % of Gross and Third field is for % of Disposable Net. All the fields have been used in the calculation to determine the non exempt amount.

This involves manual work as the user should know the fixed deduction amount, but it works partly for us. If we need to implement the entire functionality, it involves changes to the UGARN function which we did not want to touch.

Thanks,

Mitesh

[Former Member]

Hi Mitesh,

We are facing the same issue for Mississippi (MS) state. 

We have used special rule option but client does not want to use manual entry method. So we created new disposable net model with the child support wagetype as regular payment and indicator 1 but this did not work. CCPA rule check box was checked and PRCL 59 value was set to 4.

What are the changes you have pointed for UGARN function? What is the standard functionality provided by SAP to calculate State Levy? will this be reducing chid support always and adjust the disposable net amt or this need to be customized every time to reduce disp. net amt?

Appreciate your help !

Thanks

Jyoti

[Former Member]

Hi Jyoti,

We implemented this with the manual method only. If manual method is not required, you will have to find a place in UGARN function and add your custom logic after the amounts are calculated. It is risky because you will be manipulating the standard calculation.

Thanks,

Mitesh

[former_member186776]

Hi Jain,

Please check the Garnishment deduction for the child support is active or not, because when the garnishment order is not active deduction will not happen.

Check the rule maintained for this child support order in table T5UG4.

Go through this and let me know to further support.

Regards,

Siraj.

[Former Member]

Hi Siraj,

Garnishment deduction for child support is active and the rule has also been maintained in table T5UG4.

The issue here is that the Garnishment deduction for State Tax Levy is using 25% of Gross = 25% of $1000 whereas I want the system to point to 25% of $750 ($1000 (Total Gross) - $250 (of Child Support deduction)).

[former_member235056]

Hi Mitesh,

What state is this for?

Thanks,

Ameet

[Former Member]

This is for Wisconsin (WI) State Tax Levy

[former_member235056]

Hi Mitesh,

Wisconsin state follows statute 812.41 for State Tax Levy withholding (Reference: APA's Guide to Federal and State Garnishment Laws) which says that 25% of Disposable earnings and not Gross is the non-exempt limit for State Tax Levy Garnishment Calculation.

You need to define a new Disposable net model in table V_T5UG5 and then set it up in table V_T5UG2 such that it reduces Child Support as shown below.

Type of payment          Wage     Wage indicator     Percent

1 Regular payment       /5U0       1                                       

1 Regular payment       MG20     2                                       

Here, MG20 is your wage type for Child Support Garnishment. You may have to use your custom code here.

Now create a new rule to be entered in table V_T5UG4 for your state and State Tax Levy order type copying existing State Tax Levy rule line.

Enter a new Disposable Net model instead of old one now.

Assign this new rule in your IT0195.

Hope this helps.

Thanks,

Ameet

[Former Member]

Hi Ameet

Disposable net model reads wage type from IT (In UGARN) but in this case wage type for child support not available in IT so during limit calculation for WI state tax Levy there wont be any child support deduction.

Thanks

Rahul