How do I set up the program to have State Income Tax Withholdings for two States on one check?

You will have to create a User Defined Field for the second state withholding. At the AMS Payroll Menu, select Payer>Payer Edit>User Defined Fields, double-click on the first blank line. On the Edit screen selectExamples. Highlight Other State Withholding and click Select. Click Apply and then OK.

  • Some notes about this User Defined Field: First, the W-2 or 1099 Box# field must begin with an “X”, followed by the State Code for the second state withholding. In the example, we have entered “XB”, which will attribute these wages to State B.
  • The Calculating Code must be set to “X”. These X’s indicate to the program that this field requires special handling.
  • This approach will NOT work correctly if you are printing a state income tax report or form, but will work fine for all federal forms (e.g., 941 &W-2) and payroll withholdings.


Why would someone want income tax withheld from several states?

Employees who work in multiple states are potentially subject to state income tax in every state to which they have traveled for business, even if the services performed comprised just a single day. The general rule of thumb is that you should file taxes where the money was earned. This is further complicated if your business has changed residence or state in the most recent tax year. Luckily, AMS Payroll has the option to add a User Defined Field, which makes an otherwise confusing process simpler.

Software Solutions from AMS

Our W-2 and 1099 Forms Filer is our only required platform. From there, users pick the services they need. Choose from the tools below to build out your customized accounting software.