How does retroactive change behave across the year

[Former Member]

Hello,

Can anyone plz help me understand If a retroactive change crosses the year how does the payroll driver recalculate taxes for the prior year?

Thanks

Charlene

[Former Member]

Thanks Manuel

Points rewarded:)

Charlene

[Former Member]

Hello Charlene,

Taxes are frozen in prior tax years, so when a retro crosses years the earnings are forwarded into the current year and taxed. The US tax system is a when payed system, not when earned.

Regards,

Manny