Process documentationYear-End Adjustment Correction of Dependents' Data

 

Companies are obligated to correct YEA results for an employee if the tax office notifies the mistake in the dependent information for the employee. This YEA recalculation can be performed up to the past three years.

For example, the tax office founds a mistake in the dependent information in the withholding tax statement for the year 2007 and notifies it to the company. The company then checks the YEA results for the year 2005, 2006 and 2007. If the company found the mistake for all three years, the company needs to correct the dependent information and re-execute the YEA for those three years.

Prerequisites

  • You have performed year end adjustment for the target years, and the target year is included in retroactive period.

  • Year-end adjustment recalculation function is designed to be performed when the status of payroll control record for a payroll area is outside of Release Payroll to Exit Payroll.

Process

  1. You correct employees' dependent data.

    Before performing year-end adjustment correction of dependent's data, you correct the data of dependents in Family and Related Person National Features Japan infotype( 0021).

  2. You specify the years for which the YEA must be re-executed.

    You select the check box Target Year of YEA (COD) in the latest infotype 0145 record and the employee’s YEA indicator is either Normal YEA or Always YEA

  3. You check the status of payroll control record of a payroll area.

    We recommend that you ensure payroll control record status is outside of Release Payroll to Exit Payroll.

  4. You start year-end adjustment correction of dependents’ data.

    You call up payroll program and select the payroll reason YEA Correction (Dependents) ( 0017) to recalculate the YEA results.

    If a tax refund is calculated during the YEA correction (dependents) processing, the system terminates the processing of YEA correction (dependents) for this year and displays an information message. For the rest of years, the system performs YEA correction (dependents) continuously so that the system can pay out the collection amount for these two years in the next regular payroll.

  5. You end YEA correction (dependents).

    You can only complete YEA correction (dependents) when the payroll has run successfully for all target personnel who need correction in the selected payroll area. This means that payroll is completed for all of the personnel numbers in the payroll area, including the rejected personnel numbers, and the payroll period is complete.

  6. You run YEA-related reports, such as Withholding Tax Statement for Employment Income (RPCEADJ0).

    As the closing of year-end adjustment, you need to print the related legal forms and statements.

  7. You run regular payroll for the next payroll period.

    If the newly calculated YEA result is different from the original YEA result, the system carries forward the difference to the next payroll period, and the company deducts the tax collection amount from the payroll for the next payroll period.