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Author's profile photo Graziela Dondoni

U.S Tax Reporter Year End 2023

Another Year with our U.S. Tax Reporter Year End blog. If you have questions about 2023 Year-End reporting, you can post it here. This blog will be updated with tips, best practices and, SAP Notes related to this subject.

Legal Changes for US

To review the planned Legal changes for US, start the Announcement of Legal Change application. You can find detailed information about the Announcement of legal changes on this blog.

ASUG Webcast

ASUG Webcast: HCM U.S. Payroll and Tax Reporting 2023 Year End Update 

When : Oct 5, 2023

Time  – 9:30am Pacific time (12:30 ET); Duration: 1.5 hrs ( 1 hour 30 minutes)

Speakers – Mani Kak (Product Manager); Reinhard Andreaus (Eng. Lead); Gustavo Leuck (Product Owner); Boris Cruz (Sr. Developer)

Abstract  – This presentation will provide an annual update for SAP customers on SAP HCM U.S. Payroll, Tax and Tax Reporter solutions with focus on Legal Changes and Enhancements. We will also have Product experts, Developers and Product Support on the webcast actively answering to your submitted questions. There is a possibility that we may have a guest speaker as well!

Register at  :

Year End Notes

3357714 – U.S. Tax Reporter Year End 2023 Announcement
3358191 – Year End 2023 Phase I for U.S. Tax Reporter (This note is not released)
3357769 – W-2 / 1099-R Forms, Envelopes and PR Approval letter for year 2023

User Guides and Resources

3368649 – SAP HCM U.S. Tax Reporter Solution Document
2464078 – TR: 1099-R User Guides for HCM US Tax Reporter configuration
2464161 – TR: W-2 User Guides for HCM US Tax Reporter configuration
2463999 – TR: Tax Reporter User Guides for HCM US Tax Reporter configuration
1406971 – FAQ: Troubleshooting PDF Forms in US Tax Reporter
544849 – FAQ: Tax Reporter Note

 In addition, detailed Tax Reporter documentation for EHP8 is available on SAP Help Portal. To get Tax Reporter documentation of an older release click in the portal on SAP ERP HCM, then change the version on the upper right corner, and search for “Tax Reporter (PY-US-TR)”.

KBAs (Knowledge Base Articles)

3081097 – KBAs (Knowledge Base Articles) for Payroll USA
2918093 – After upgrade issue with the position of text and alignment

Educational Videos

2480185 – TR: Tax Reporter – Online W-2 Enhancements videos

Kind regards,

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      Author's profile photo Rosette Vaughn
      Rosette Vaughn

      Hi Graziela,

      While looking at the service packs available for download, I noticed that service pack SAPKE608B59 (119) - contents the same notes as SAPKE608B58 (118).  Wanted to make you aware and ask when will service packs be updated with corrected notes.



      Author's profile photo Graziela Dondoni
      Graziela Dondoni
      Blog Post Author

      Hello Rosette,

      Where do you see this? Could you share the link?

      Thank you,

      Author's profile photo Joe Jones
      Joe Jones

      Hi Graziela,

      Our legal department says we need to put on the W2 the Washington Cares Tax in box 14. Will SAP be providing an OSS Note for this requirement?

      Author's profile photo Graziela Dondoni
      Graziela Dondoni
      Blog Post Author

      Hello Joe,

      Could you check SAP note 2869548?

      Kind regards,

      Author's profile photo Joe Jones
      Joe Jones

      Hi Graziela, I read this note, and it applies to the WA PFML (paid family medical leave), which we have already done. I'm inquiring about the WA Cares Fund tax. Can you tell me if this is required to be on the W2?

      Author's profile photo RICHA KNOTTS

      Hi Graziela,

      I am reaching out to ask a specific question around quarterly reporting for UI filing.

      For the second quarter we submitted the MMREF format from the Tax Reporter.

      DES has made changes to the quarterly report. The MMREF is going away as of 3Q2023.

      The accepted files now are ICESA, CSV, and EFW2.

      Please advise if there is a note out there to take care of this?



      Author's profile photo Hemanth Krishnakumar
      Hemanth Krishnakumar

      Alabama Overtime is nontaxable effective 01/01/2024.

      overtime according to FLSA = 1.00 X hourly pay + 0.5X FLSA or hourly pay (which ever is greater either FLSA or hourly pay).

      Example: employee in Alabama has hourly rate of $15.00. employee work 1 hours of overtime. calculated FLSA rate is 20.00.

      overtime = 1.00 X hourly rate + 0.5 X FLSA or hourly rate which ever is greater.

      overtime = 1.00 X 15.00 + 0.5 X 20.00 = 15 + 10 = $25.00.


      1. in this all $25.00 is nontaxable or just the 0.5X 20.00 = $10.00 is nontaxable for the state of Alabama.
      2. SAP going to release a note to make overtime for Alabama to be exempt from taxes?

      Need your input.

      Author's profile photo Chandra Veeramony
      Chandra Veeramony

      #1 is probably a question to the state of Alabama. However, per their guidance, $25 is exempt.

      "For periods beginning January 1, 2024, and ending before June 30, 2025, gross income does not include the amounts received by an hourly wage paid employee for hours worked in excess of 40 hours in a week. This includes amounts received for hours worked in excess of 40 hours that are paid at the regular rate of pay."

      #2 - dont think SAP will release something for this as this would be a tax model change.



      Author's profile photo Carlos Accorsi
      Carlos Accorsi

      Hello Hemanth and Chandra,

      SAP is aware of the Alabama Overtime requirements and is currently checking it internally.
      My suggestion is for you to keep an eye on the Announcement of Legal Changes, as any news should be published there (refer to 2917160).

      Best Regards,

      Author's profile photo hemanthkumar krishnakumar
      hemanthkumar krishnakumar

      Thanks chandra for your email.


      Now we have to add a new processing class 71 which is "@" for all overtime wage types. now remove @ tax modal for Alabama and add @ in all the other tax modals (including FED/STATE and local). now doing so we need to test if overtime is not getting taxed for Alabama as positive testing and we need to test all local/state other than "Alabama "to make sure overtime is taxed as negative testing. This change to tax modals involves lot of testing??? right please let me know if we both are in sync.

      Author's profile photo Chandra Veeramony
      Chandra Veeramony

      Yeah, that would be the typical set up.