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USPS Process Guide –
Appendix K – Local, State, and Federal Codes –
State Tax Status

Enter basic tax information for new hires on HMPNH (Employee Add). An agency may be required to report tax information to a state if it has a record of an employee either working or residing in that state. If an employee’s work state is different from his or her state of residence, or if the employee works in several states, follow additional procedures to enter state tax information on H0BUD (Employee Tax Information) and H0ATX (Employee State & Local Tax Status). Verify HO4U1 to see if the taxing entity is set up for your agency. If not, please submit a Letter of Authorization (LOA) with the contact information and tax ID.

H0BUD (Employee Tax Information)
If an employee works in several states, or if his or her state of residence is different from his or her work state, enter each state in which the employee works on H0BUD, along with the percentage of income earned in that state.
H0ATX (Employee State and Local Tax Status)
For each work or residence state, a separate record will be created on H0ATX. (You can access withholding information for different states using the state code.)

However, for most employees, work and residence states are the same, so only one H0ATX record is needed.

State Tax Status Codes

The tax status code is entered in the TAX STAT field on the state income tax section of HMPNH. The STATUS field is entered on the state income tax section of H0ATX. These fields determine how the system handles other fields containing withholding information. (For more information, refer to the State Tax Status Code table, later in this appendix.)

If options 1 through 6 are selected for the work state tax status, the system withholds for the working state only. Select these options when the work and resident states are the same, or when they are different but it is not necessary to deduct withholdings or report taxable wages to the resident state. If you select options 7 through 9 for the working state tax status, the system can withhold for both the working and resident states or just the resident state.

State Tax Status Code Table

Tax Status Effect on the System
1

System does not withhold state taxes or accumulate taxable wages. Use this status when you are not required to report an employee’s income to the state.

If withholding is not required but reporting taxable income is, see tax status 3, below.
2 System withholds only the percentage of state taxes specified in the FACTOR field.
3

System withholds the amount from the AMOUNT field, and also from the EXT AMOUNT field, if applicable.

Use this status if withholding is not required but reporting taxable income is. Do not enter any values in the AMOUNT or EXT AMOUNT fields in such a case.
4 System withholds state taxes based on the tax tables and the number of exemptions.
5 System withholds state taxes based on the tax tables and the number of exemptions, and also withholds the extra percentage of state taxes specified in the EXT FACTOR field.
6 System withholds state taxes based on the tax tables and the number of exemptions, and also withholds the amount in the EXT AMOUNT field.
7 Use this status only for a taxing entity in a work state. The system:
  1. Withholds taxes based on income earned in the work state, using tax tables and the number of exemptions. This is what will be reported to the work state taxing entity.
  2. Determines the tax status for the resident state taxing entity, based on the following conditions:
    • If the status is 1 through 6, USPS records earnings from the work state as taxable income for the resident state; the system calculates withholdings based on the resident state tax status. For example, if the tax status for the resident state is 6, USPS withholds taxes using the resident state’s tax tables, and also withholds the amount specified in the EXT AMOUNT field.
    • If the status is 9, USPS adds the amount earned in the work state to any earnings made in the resident state and records this total as the taxable wages in the resident state. Using the resident state’s tax tables and the number of exemptions, the system then calculates withholdings.
  3. If the amount withheld in step 1 above is:
    • Greater than or equal to the amount withheld in step 2, USPS does not withhold any taxes for the resident state.
    • Less than the amount withheld in step 2, USPS subtracts the withholdings in step 2 from those in step 1 and records the difference as the amount withheld for the resident state tax.
8

Use this status only for a taxing entity in a work state. USPS records taxable wages and withholds for taxes based on earnings made in the work state, using the work state’s tax tables and the number of exemptions.

USPS then calculates the resident state tax information as follows:

  • If the resident state tax status is 1 through 6, the system uses the income earned in the work state and calculates the withholdings, using the resident state tax status.
  • If the resident state tax status is 9, earnings from the work state are added to the earnings from the resident state. Taxable income and withholdings will be calculated based on this combined amount, using the resident state’s tax tables and number of exemptions.
9
  • Use this value if you want the system to figure the tax for the employee’s work state. The system does not withhold taxes or accumulate taxable wages for the work state taxing entity. Instead, the system withholds taxes and accumulates taxable wages for income earned in the resident state only.
  • Use this field if you are entering this option for the resident state tax status, and the tax status for the work state is 7, 8 or 9.

    • If the work state tax status is 7, the system adds the earnings of the work and resident states together. It uses this total as the taxable wages for the resident state and calculates withholdings on this amount based on the tax tables and the number of exemptions in the resident state.

      If the amount withheld is less than the amount that would have been withheld based on income from the work state alone (using the tax tables and number of exemptions for the work state taxing entity), USPS does not withhold any taxes for the resident state taxing entity.

      If the amount withheld is greater than the amount that would have been withheld based on income from the work state alone (using the tax tables and number of exemptions for the work state taxing entity), the difference between the two withholdings is used as the withholding for the resident state taxing entity.

      Note: This combination of options 7 (for the working state) and 9 (for the resident state) is used only for certain types of reciprocal taxing.

    • If the work state tax status is 8, the system adds the amount earned in the work state to the income earned in the resident state. Then the system both records taxable income and withholds taxes based on the tax tables and the number of exemptions for the resident state taxing entity.
    • If the work state tax status is 9, the system uses the income earned in the resident state only. Then the system both records taxable income and withholds taxes based on the tax tables and the number of exemptions for the resident state taxing entity.

Note: Values 2 and 5 often are not available on state tax forms, although some employers allow employees these choices. Your agency may choose either option; it is then your agency’s responsibility to comply with federal tax laws.

State Codes Table

Below is a list of state codes and state information:

  • The first column contains the postal abbreviation for the state and the District of Columbia.
  • The second column shows the code assigned to a state. USPS uses the code on H0BUD, in the 1ST WORK STATE through the 5TH WORK STATE fields and in the RES ST. You may also use the state code in the ST CD field on the HMPNH.
  • The third, fourth and fifth columns indicate whether or not the state collects state income taxes (SIT), disability insurance (DI) and state unemployment insurance (SUI), respectively.
  • The sixth column indicates whether or not there are any local taxing entities (for example, cities or counties) that collect income tax.
  • The seventh column indicates whether or not there is more than one local taxing entity within a locality (for example, both a county and a city within the county collect income taxes). Special tax routines are used in such instances.
  • The eighth column contains miscellaneous tax information, if necessary.
State Code SIT Tax DI Tax SUI Tax Local Tax Special Local Tax Comments
AL 01 Y N Y Y Y  
AK 02 N Y Y N N DI rate may vary between 0.6 and 1.0%; USPS assumes .7%. (DI is paid SUI.)
AZ 03 Y N Y N N SIT is determined by SIT EXEMPT field.
0 17% (default)
1 22%
2 25%
3 10%
AR 04 Y N Y N N  
CA 05 Y Y Y N N SIT EXEMPT field is 2 fields: 1–3 additional allowances, and 4–5 SIT EXEMPT field. This field also includes the low income exemption amount in calculation.
CO 06 Y N Y Y N Exemption amount same as federal.
CT 07 N N Y N N  
DE 08 Y N Y Y N  
DC 09 Y N Y N N  
FL 10 N N Y N N  
GA 11 Y N Y N N  
HI 12 Y Y Y N N DI maximum is weekly.
ID 13 Y N Y N N  
IL 14 Y N Y N N SIT is a flat rate.
IN 15 Y N Y Y N CAGIT and COIT are mutually exclusive. Local is calculated based on resident local.
IA 16 Y N Y N N FIT is a credit against wages for SIT.
KS 17 Y N Y N N The exemption amount is the same as federal
KY 18 Y N Y Y Y FIT is a credit against wages for SIT. Local and SP LOC have maximum tax per year.
LA 19 Y N Y N N SIT EXEMPT field is 2 fields. 1–3 credits, 4–5 SIT exemptions.
ME 20 Y N Y N N  
MD 21 Y N Y Y N Local is a % of SIT.
MA 22 Y N Y N N Minimum weekly equivalent wage for tax $154. FICA tax credit against taxable. Pay type 5 calculates SIT tax for pensioners.
MI 23 Y N Y Y N SIT is flat rate. Local uses different exemption amount per locality.
MN 24 Y N Y N N  
MS 25 Y N Y N N SIT EXEMPT field contains annualized amount of income exempt from withholding. These include $6,000-Single, $9,500-Married/ H.O.H., $1,500 per each additional exemption.
MO 26 Y N Y Y Y State marital status of 5 means married, filing jointly, and only one spouse has a job; that spouse has only one job.
MT 27 Y N Y N N  
NE 28 Y N Y N N  
NV 29 N N Y N N No SIT.
NH 30 N N Y N N No SIT.
NJ 31 Y Y Y N Y DI-.5%, SUI-.625%, DI Status: 4-EMP pays DI/SUI, 5-EMP pays DI, CO pays SUI, 6-EMP pays SUI, CO pays DI, 7-CO pays DI/SUI.
NM 32 Y N Y N N Each July, $3.00 worker’s comp tax is withheld from the employee’s pay. Use a one-time deduction.
NY 33 Y Y Y Y N DI maximum is weekly. Local tax is calculated using different methods between locals.
NC 34 Y N Y N N SIT EXEMPT field contains number of allowances claimed on form NC-4.
ND 35 Y N Y N N SIT flat % of federal tax.
OH 36 Y N Y Y N Locals 8–20, 24, 25 and 80–99 require local name. 80–]99 require amount/percent entered.
OK 37 Y N Y N N Uses a .84 factor in calculation.
OR 38 Y Y Y N N SIT gives federal tax credit to maximum of $3,000. DI is worker’s compensation at 14 cents per day worked.
PA 39 Y N Y Y Y SIT flat rate. Locals 3–20, 81–99 require local name. 80 is not used.dd
RI 40 Y Y Y N N DI is temporary disability tax of 1%, subject to DI limit.
SC 41 Y N Y N N  
SD 42 N N Y N N No SIT tax.
TN 43 N N Y N N No SIT Tax.
TX 44 N N Y N N No SIT tax.
UT 45 Y N Y N N  
VT 46 Y N Y N N SIT is a flat % of federal tax.
VA 47 Y N Y N N  
WA 48 Y Y Y N N SIT field is for Washington Medical Aid fund (hours worked * SIT EXEMPT field). SIT EXEMPT field is a five-decimal place field containing 1/2 rate specified by job classification. SIT status must be 4. DI field is for State of Washington Supplemental Pension Fund (hours worked * .0185).
WV 49 Y Y Y N N DI employee-paid portion of SUI tax. Establish 2 memo deductions for debit replacement and fund stabilization. Establish goals as tax rate * maximum taxable.
WI 52 Y N Y N N WI has alternate withholding if taxable equals 0 exemptions. This may make SIT appear too high or too low. See Tax Checker.
WY 51 N N Y N N No SIT tax.

*An asterisk indicates that the code is not active.