Dynamics AX 2012 Payroll – Pay Statement does not display the appropriate taxes based on where the employee works and resides

When reviewing a Pay Statement for an employee that works in one state but resides in another state, we are seeing that the state taxes display for the state where the employee works as opposed to the state where the employee resides.

This applies to Dynamics AX 2012 R2 and Dynamics AX 2012 R3.


For this example, we have an employee who works in Pennsylvania and resides in Ohio.  In the pay statement listed above we see that the employee is paying Pennsylvania state tax.  The employee should be subject to Ohio taxes and Pennsylvania city tax where applicable.  This may be caused by not having the Non-Resident Certificate on File parameter selected. 


Please Note: You may need to contact state officials to make sure the employee can obtain a Non-Resident Certificate.


To review this, please perform the following steps:

1.  Click on Payroll, click Common, click Workers and click on Workers.

2.  Select the worker who needs to update the Non-Resident Certificate on File parameter

3.  Click on the Payroll tab and click Worker Tax Codes.

4.  Select the USA-PA-SIT tax code.

5.  Under the Non-Resident Certificate parameter, set this option to True.


After this parameter is selected, create an Earnings Statement and a Pay Statement.  We will now see that the state tax for the state that the worker is employed in no longer displays on the Pay Statement.


 Ryan S.