Redesigned Withholding Compliance Lock-In Letters 2800C and 2808C
**Updated on September 24, 2020: SAP Note 2967813 released for all customers**
SAP has released SAP Note 2967813. This SAP Note delivers a correction for Redesigned Lock-in letters in scenarios with Additional Withholding.
**Updated on August 21, 2020: SAP Note 2951750 released for all customers**
On March 4th, 2020, the IRS issued the Special edition of e-News for Payroll Professionals – Redesigned Withholding Compliance Lock-In Letters 2800C and 2808C coming soon (https://content.govdelivery.com/accounts/USIRS/bulletins/27f3b0b).
The IRS stated that “The Tax Cuts and Job Act of 2017 (TCJA) changed withholding calculations by eliminating allowances, and in response, the IRS redesigned Form W-4, Employee’s Withholding Certificate. The Service is also redesigning the Withholding Compliance Lock-in Letters to reflect these changes.”.
After receiving a lock-in letter in the new format, customers have up to 60 days to start withholding based on that lock-in information.
To enable you to comply with this legal change, SAP has released SAP Note 2951750 – [US] New 2020 Lock-in letters. This SAP Note 2951750 delivers the following changes:
- Payroll changes in the USTAX payroll function
- New fields in infotype IRS Limits USA (0161), as required by the new lock-in letter format. For a preview of these changes, see the screenshot below:
SAP Note 2958696 delivers the same changes for HR Renewal.
I hope you find this information helpful!