Dayforce can be configured to support the special tax rules associated with certain Air Carrier workers under 49 USC 40116(f). This functionality is for the United States of America only.
Federal law (49 USC 40116(f)) prohibits state taxation (as well as taxation in political subdivisions such as county and local) for certain air carrier workers. Special tax rules can apply to employees of some companies that have an air-carrier certificate.
If this federal law applies, then the employee’s compensation is taxed in the following ways:
- In the resident state (or political subdivision of the state) of the employee, AND
- In the state (or political subdivision of the state) in which the employee earns more than 50% of their pay.
This is determined in the state (or local) in which the scheduled flight time of the employee in that state (or political subdivision of the state) is more than 50% of the total scheduled flight time of the employee in the calendar year. This applies to all other state (local) taxes as well.
Currently, this functionality must be added to your Dayforce instance by a Support user.
When the functionality has been added to an instance, some additional configuration is required:
- In System Admin > Client Properties, in the Properties tab, in the Payroll section, the Enable Air Carrier Crew Taxation (US Only - Restricted) checkbox must be selected.
- In Org Setup > Org Payroll Setup > Legal Entity, for a US legal entity, in the Taxation Parameters tab, the Enable Air Carrier Crew Taxation (US Only - Restricted) checkbox must be selected.
This configuration adds the Special Taxation section to the Payroll > Tax Definitions screen in the employee profile in People.
To view and work with this section, the user must have the role feature added. In System Admin > Roles, in the Features tab, under Application Container > People > Employee Profile > Payroll > Taxation > Tax Definitions > United States, the Special Taxation checkbox must be selected.
Entries in the Special Taxation section contain Special Taxation Type, Effective From, and Effective To columns, which correspond to the fields in the General section for the entries.
Entries for the Air Carrier Crew Taxation special taxation type also contains a Parameters section with the following options to configure:
- Apply Air Carrier Crew Taxation
- Greater than 50% Performed at Primary Work Location
This is illustrated in the following screenshot: