Some tax calculations involve annual caps in determining the TaxAmount. In order for these caps to be applied correctly, all previous earnings (i.e., earned before the amount indicated in the Earnings property) should be entered here. Each tax which uses this information is noted as such in its Instructions property.

As an example, suppose an employee with a biweekly pay period earns $4000 and you would like to compute FICA for the period. If previous earnings are $63,000, and filing status is Single, you would set the following properties:

   TaxControl tc = new TaxControl();
   tc.setPayPeriodsPerYear(26);
   tc.setFilingStatus(0);
   tc.setEarnings(4000.00);
   tc.setYTDEarnings(63000.00);

This employee's earnings have surpassed the Social Security annual cap (for this example from a previous year at $65,400), so the TaxAmount computation will apply FICA Med percentage to the entire Earnings amount, and FICA SS percentage only on the first $2400 ($65,400 - $63,000) of the Earnings.

See Also: Earnings