Under Review

Non-Cash Add-on for Non-Resident Aliens Accumulating as Earned Wages

Non-resident aliens are required to have an amount added to their earned wages so that higher taxes are calculated on their pay. The extra amount is not an additional withholding nor is it paid to the employee.  It is a factor, which varies by the pay frequency, that is a non-cash earning for tax purposes only.  In Abra, we could check a box that identified an employee as a non-resident alien and the system automatically accounted for this taxation correctly.  In HRMS, we manually add the extra amount to the employees’ wages as a non-cash earning and the taxes are calculated correctly.  However, this amount is then accumulated as taxable earnings, which is not correct.  It should not be shown as actual earnings as it is merely a book entry and is not paid to employees.  We are required to make a manual adjustment to pay history to remove the non-cash earnings factor from accumulated wages so that W-2s and other reports are correct.