Tax Release Notes 202602-1

The following tax updates have been made and are now available.

 

Millennium users can sync with MPAY for the changes. Please remember to restart your Process Servers after performing a SyncUP to MPAY.

 

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The current release includes the following changes:

 

Development Tags

 

Form Updates:

 

  • 940 Annual Return of Federal Unemployment Tax Update

  • 2025 Montana Annual W-2 1099 Withholding Tax Reconciliation Update

 

E-file Updates:

 

  • Kentucky Louisville W-1 Quarterly Update

 

Tax Updates:

 

  • 2026 Arkansas New Employer Unemployment Rates

  • 2026 Pennsylvania Local Service Tax Description and Deposit Method

  • 2026 Pennsylvania Local Service Tax Rates

  • 2026 Pennsylvania Local Earned Income Tax Rates

  • Pennsylvania Local Tax Codes To Be Obsolete

 

Collector Updates:

 

  • Nevada Business Tax Remittance Update

 

Geocoding Updates:

 

  • Ohio Local School District Taxes

  • Ohio Local Update

  • Pennsylvania Local Update

 

System Updates:

 

  • Arkansas Unemployment Setup of Related Taxes

  • Pennsylvania Add Tax Credit to Payroll Manager

 

Tax Development Tags

 

Form: 940 Annual Return of Federal Unemployment Tax Update (M3-3021)

 

The 940 Annual Return of Federal Unemployment Tax (FUTA) form has been updated. The system now uses the Mark Return Final Date on the FUTA tax code to automatically mark the “X” on the form. This removes the need to enter “F” in the Other1 option for final returns.

 

Form: 2025 Montana Annual W-2 1099 Withholding Tax Reconciliation Update (M3-3045)

 

The 2025 Montana Annual W-2/1099 Withholding Tax Reconciliation Return (MW-3) has been updated to ensure the data alignment displays correctly on the form.

 

Please download the 25MTMW31A.pcl file from the SFTP site under "Tax Forms\Tax Forms for Tax Release 202602-1\" and place the file in your local M3 Tax Forms folder prior to generating the return.

 

E-File: Kentucky Louisville W-1 Quarterly Update (M3-3057)

 

The Kentucky Louisville quarterly e-file (KYLOUWEFILE) and form (KYLOUISVILLE) have been updated to show tip income tax shortage on line 8.

 

Tax: 2026 Arkansas New Employer Unemployment Rates (M3-3059)

 

The Arkansas new employer unemployment tax rates have been updated effective 01-01-2026.

 

ARClosed Accounts Receivable stabilization rate (ARAST)

 

New employer rate: 0.2%

 

Arkansas unemployment (ARSUI)

 

New employer rate: 1.8%

 

Tax: 2026 Pennsylvania Local Service Tax Description and Deposit Method (M3-3051)

 

The Pennsylvania local LST tax description has been updated effective 01-01-2026.

 

Germany T (Adams) Littlestown ASD LST (PA-GER7)

 

The Pennsylvania local LST tax deposit method of ACHClosed Automated Clearing House — An electronic network for financial transactions in the United States. Transactions within our software can be made by either check or ACH. Credit is now available effective 01-01-2026.

 

New Cumberland B. (Cumberland) West Shore S.D. (PA-NEW8)

 

Tax: 2026 Pennsylvania Local Service Tax Rates (M3-3049)

 

The Pennsylvania local service tax rates have been updated effective 01-01-2026.

 

Briar Creek T (Columbia) Berwick ASD LST (PA-BRIL)

 

Combined rate: $52.00

 

Briar Creek T (Columbia) Berwick ASD LST (PA-BRIM)

 

Municipal rate: $47.00

 

Canaan T (Wayne) Western Wayne SD LST (PA-CAN8)

 

Municipal rate: $0.00

 

Cussewago T (Crawford) Penncrest SD LST (PA-CUS2)

 

Municipal rate: $52.00

 

Dickinson T (Cumberland) Carlisle ASD LST (PA-DIC3)

 

Municipal rate: $52.00

 

Exeter T (Luzerne) Wyoming ASD LST (PA-EXE8)

 

Combined rate: $30.00

 

Lancaster C Annex (Lancaster) Lampeter-Strasbg SD LST (PA-LANK)

 

Combined rate: $47.00

 

Pine T (Crawford) Conneaut SD LST (PA-PINP)

 

Municipal rate: $52.00

 

South Newton T (Cumberland) Big Spring SD LST (PA-SO43)

 

Combined rate: $52.00

 

The following LST tax code has been reinstated effective 01-01-2026:

 

Walker T. (Juniata) Juniata County S.D. (PA-WAL5)

 

Combined rate: $52.00

 

Tax: 2026 Pennsylvania Local Earned Income Tax Rates (M3-3046)

 

The Pennsylvania local earned income tax rates have been updated effective 01-01-2026.

 

Upper Frederick T. (Montgomery) Boyertown Area S.D. (PA-060210)

 

Resident rate: 1.04%

 

Langhorne Manor B. (Bucks) Neshaminy S.D. (PA-090803)

 

Resident rate: 0.5%

 

Nonresident rate: 0.5%

 

Upper Darby T. (Delaware) Upper Darby S.D. (PA-231303)

 

Resident rate: 1.0%

 

Nonresident rate: 1.0%

 

Williams T. (Northampton) Wilson Area S.D. (PA-480803)

 

Resident rate: 1.25%

 

Bethel Park B. (Allegheny) Bethel Park S.D. (PA-730201)

 

Resident rate: 1.75%

 

Callimont B. (Somerset) Meyersdale Area S.D. (PA-560301)

 

Resident rate: 0.0%

 

Note: Callimont Borough, Somerset County (PA-560301) has ceased to exist and will no longer be available effective 04-01-2026. They have merged with Larimer Township, Somerset County (PA-560304). Please update the tax on those employees to PA-560304.

 

Resident rate: 1.0%

 

Tax: Pennsylvania Local Tax Codes To Be Obsolete (M3-3052)

 

The following Pennsylvania local tax codes will become obsolete effective 04-01-2026:

 

Chester C (Delaware) Chester-Upland SD (PA-CHEJ)

 

Note: PA-CHET current tax code should be used.

 

Chester C. (Delaware) Chester-Upland S.D. (PA-CHER)

 

Note: PA-CHET current tax code should be used.

 

Rush T (Schuylkill) Mahanoy ASD (PA-RUS8)

 

Note: PA-RUSB current tax code should be used.

 

Please ensure that any employees who still have these obsolete tax codes on their Taxes tab, are updated to the current tax codes to avoid processing or reporting issues.

 

Collector: Nevada Business Tax Remittance Update (M3-3063)

 

The Nevada modified business tax for both the Financial Institution (NVFBT) and the General Business (NVGBT) return address has been updated effective 01-01-2026.

Nevada Department of Taxation

P.O. Box 848972

Los Angeles, CA 90084-8972

Geocoding: New Ohio Local School District Taxes (M3-3055)

 

The new Ohio local school district taxes have been added and are now included in the tax setup audit recommendations:

 

0505 Trimble LSD (OH-TRI7)

 

2514 Westerville CSD (OH-WESW)

 

3204 Findlay CSD (OH-FIN3)

 

7407 Tiffin CSD (OH-TIF3)

 

8303 Kings LSD (OH-KIN1)

 

Geocoding: Ohio Local Update (M3-3050)

 

The Ohio local Harrison Township City of Harrison JEDD (OH-HARA) has been added and will now be included in the tax setup audit recommendations.

 

Geocoding: Pennsylvania Local Update (M3-3053)

 

The Pennsylvania local Callimont Boro has now merged with Larimer Twp. The tax setup audit recommendation is now:

 

Larimer T. (Somerset) Meyersdale Area S.D. (PA-560304)

 

System: Arkansas Unemployment Setup of Related Taxes (M3-3060)

 

The issue when selecting the ARSUI on the Master Company Setup, Taxes tab, where duplicate tax codes are populating for ARSUI, has been resolved.

 

System: Pennsylvania Add Tax Credit to Payroll Manager (M3-2956)

 

The Tax Liability tab on the Payroll Manager has been updated. Users now have the ability to add a manual credit type for PA tax code.

 

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