July 2025

🚀 What's New

Release Date: 07/18/2025

1. Canada | Default Exemption Amount Changes

Improvement: Several Canadian provinces have updated their basic personal exemption amounts for the 2025 tax year, with changes taking effect July 1, 2025. Our system has been updated to reflect these new exemption amounts to ensure accurate payroll calculations.

Key Updates

The following provinces have revised their basic personal exemption amounts:

• Manitoba: $15,591
• Nova Scotia: $11,744
• Prince Edward Island: $15,050
• Saskatchewan: $19,991 

For more information - Canada Revenue Agency
 

How Does This Impact You? 

These changes are effective July 1, 2025 and will be applied to all payroll calculations processed on or after this date.

KB Article: Canada Default Exemptions (Basic Personal Amounts)

2. New Jersey Family Leave Insurance (NJ FLI) W2 Reporting Update

Improvement: Following customer and ADP requests, along with official confirmation from the State of New Jersey, we have updated the reporting location for New Jersey Family Leave Insurance (NJ FLI) tax on W2 forms and ADP quarterly files. This change resolves long-standing filing confusion and ensures compliance with both state requirements and tax software compatibility.

Key Updates

• Previous Reporting: NJ FLI tax was reported in Box 17 (State Income Tax Withheld)
• New Reporting: NJ FLI tax is now reported in Box 14 (Other) with description "NJ FLI"
   

How Does This Impact You? 

W2 forms will now show NJ FLI in the correct Box 14 location No manual adjustments needed - the system handles the change automatically.

3. Federal W-4 Supplier Supplier Logic Update

Improvement: This work item addresses the handling of Federal W-4 tax forms for employees with multiple supplier assignments. Payroll processing will now prioritize the most recent W-4 from the specific supplier for whom the paycheck is being generated, ensuring accurate tax withholding calculations. If an employee is missing a W-4 for the relevant supplier, a DRM will notify the user, and default tax rates will be applied.

Key Updates

• New Logic: Federal W-4 forms now follow the correct order of  supplier precedence
• Primary Priority: Payment batch's supplier matches W-4 form's supplier
  • Default W4 Tax Exemptions Applied if not corrected
• DRM - pbv_CheckForMissingFederalW4ForSupplier = Employee is missing a Federal W4 record for this supplier. Taxes will be processed with default values.
   

How Does This Impact You? 

• Improved Accuracy: Tax withholdings will be calculated using the correct W-4 form for each supplier
• Clear Warnings: DRM notifications will alert you when employees are missing supplier-specific W-4 forms

KB Article: DRMs Payroll

🚀 What's New

Release Date: 07/03/2025

1. Alaska Paid Sick Leave

Improvement: We've implemented Alaska Paid Sick Leave functionality to ensure compliance with Alaska's new paid sick leave law taking effect July 1, 2025. This enhancement adds comprehensive accrual tracking and leave management capabilities specifically designed for Alaska's regulatory requirements.

Key Updates

• New Accrual Plan: Added "Sick Leave_AK" accrual plan with Alaska-specific parameters
• Accrual Rate: Employees earn 1 hour of sick leave for every 30 hours worked
• Annual Limits: Maximum of 56 hours can be used per year, with 56 hours as the yearly accrual limit
• Carryover Policy: Unlimited carryover of unused sick leave hours
• Gap Period: 180-day waiting period before accruals begin for new employees
• Immediate Use: No waiting period required before employees can use accrued sick leave
• Anniversary-Based Tracking: Leave year calculations based on employee anniversary dates
• Automatic Integration: Seamlessly integrates with existing payroll and leave management workflows
   

How Does This Impact You? 

The enhancement is available in the Classic platform, preparing your organization for compliance with the new Alaska Sick Leave Policy.

2. Alabama Overtime Tax Withholding Update

Improvement: We've updated Alabama overtime tax treatment to comply with new state regulations effective July 1, 2025. Alabama overtime pay is no longer exempt from state tax withholding, requiring system changes to ensure proper tax calculations and reporting for all Alabama employees.

Key Updates

• Tax Withholding Change: Alabama overtime pay now subject to Alabama state tax withholding effective July 1, 2025
• Dual Reporting Periods: System handles different reporting requirements for overtime earned before and after June 30, 2025
• W-2 Box Allocation:
  • Overtime from January 1 - June 30, 2025: Reported in Box 14 (Other)
  • Overtime from July 1, 2025 onward: Reported in Box 16 (State wages)

Greenshades Integration:

• Pre-July 1 overtime: Reported separately as required
• Post-June 30 overtime: Combined with regular state wages

Automatic Processing: System automatically applies correct tax treatment based on pay period dates
 

How Does This Impact You? 

Alabama employees will now see state tax withholding applied to their overtime hours starting July 1, 2025. The system automatically handles the transition, so no manual intervention is required for the tax calculation changes.

3. ADP Tax File Version and Work Location Updates

Improvement: We've updated ADP tax reporting files to version 060625 and added work location zip code requirements to ensure compliance with ADP specifications and state requirements like Indiana SUI reporting. These changes enhance the accuracy and completeness of tax file submissions.

Key Updates

• Version Update: ADP version upgraded to 060625 across all tax file types
• File Type Coverage: Updates applied to Periodic, Interim, and Quarterly tax files
• X Record Enhancement: Position 210-224 now displays version 060625 in all applicable files
• Work Location Zip Code: Added work address zip code in positions 509-513 of ADP Quarterly files
• State Compliance: Addresses specific requirements for states like Indiana SUI that require work location data
• Standardized Format: Ensures consistency across all ADP tax reporting file formats
   

How Does This Impact You? 

Your ADP tax files will now include the updated version number and required work location zip codes. This ensures your submissions meet current ADP specifications and avoid potential rejections or processing delays.

4. Ohio Municipal Tax Reporting Enhancement

Improvement: We've enhanced Ohio municipal tax reporting through Greenshades to provide better categorization and compliance for municipal resident taxes. This update introduces a dedicated field to properly distinguish between resident taxes and workplace taxes, addressing the complexity of Ohio's municipal tax system where individuals always owe municipal income tax to the municipality where they work (this is called "work place tax"), but they may or may not owe income tax to the municipality where they live (this is called "residence tax").

Key Updates

• New ResidentTax Field: Added dedicated "ResidentTax" field in Greenshades data files for Ohio municipalities
• Enhanced Tax Categorization: System now properly differentiates between Municipal Resident Tax (courtesy withholding for where employees live) and workplace-based municipal taxes (where employees work)
• Improved Data Structure: Tax reporting data files now include specific identification for courtesy resident tax withholdings
• Compliance Alignment: Updates align with Ohio's complex municipal tax structure where most Ohio cities and villages have a municipal income tax as well, with rates ranging from 0.5 to 3 percent
   

How Does This Impact You? 

You'll see an additional ResidentTax field in your Greenshades data files when processing Ohio municipal taxes. This field will automatically populate for employees subject to Municipal Resident Tax withholdings (courtesy withholding for the municipality where they live), making your tax reporting more precise and organized separate from workplace municipal taxes.