Negative Pennsylvania Taxable Wages

Peoplesoft V9.2

We are seeing negative taxable wages for Pennsylvania in the following situation.

The employee has both taxable and non-taxable (such as an expense reimbursement) pay codes in their gross pay.

The employee has group term life insurance imputed income, which is taxable for federal but not for PA. GTL is set up as a taxable gross component for PA to Subtract From taxable wages.

The employee has a pre-tax benefit deduction that is greater than their gross pay.

The pre-tax benefit deduction withholds the entire disposable pay (both taxable and non-taxable amounts) leaving the employee with a zero net pay.