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US BENEFIT TYPES
US BENEFIT TYPES

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!!Symmetry Supported Benefit Types
!Pre-defined Benefit Types
!!Overview
This section describes the benefit types supported by the Symmetry Tax Engine (STE) software which may impact employee taxable wages.
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The amounts calculated by some benefit plans may be used to adjust employee taxable wages. The amounts stored in the benefit deduction pay components need to be passed to the SymmetryTaxEngine so the system can determine the correct taxable wage for the employee for the various taxes.
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UPCALC passes the benefit amounts to Symmetry via new PC Usages for what Symmetry calls ‘Benefit Types’. The SymmetryTaxEngine will use the value passed in these Benefit Types to reduce the taxable wage. The SymmetryTaxEngine knows per state which Benefit Types are pre-tax and which are post-tax.
Audience
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There are no changes required to the benefit plans themselves, nor the benefit deduction pay components. There is just a need to define new pay components and elements. This document will review the new pay components needed.
All users who are responsible to do the Payroll Tax Calculation in the Pay cycle process.
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The Symmetry Tax Engine (STE) supports nine pre-defined benefit types and ten custom benefit types which may affect taxable earnings.
Prerequisites
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The STE will determine the pretax status of the nine predefined benefit types for each of the taxes calculated.
All users must have a thorough understanding of the Payroll Pay Cycle UPCALC process.
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!!Symmetry Supported Benefit Types
!Pre-defined Benefit Types
The Symmetry Tax Engine supports nine pre-defined benefit types and ten custom benefit types which may affect taxable earnings.
The SymmetryTaxEngine will determine the Pre-Tax status of the nine predefined benefit types for each of the taxes calculated.
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Symmetry requires the current to date (CTD) value and the year to date (YTD) value to be passed to the SymmetryTaxEngine. If the benefit type has a maximum contribution limit (ie: 401ks) the tax engine will monitor the YTD to determine when the maximum contribution limit has been reached. The tax engine will NOT stop the benefit deduction from taking place, however; it will stop reducing the taxable wages if an Employee has reached the max limit.
If there are multiple benefit plans defined for the same benefit type and each have a different contribution limit, these must be separated out using the Custom benefit types. An example of this is FSA Medical and Dependent Care. The FSA Medical would be set up using the pre-determined FSA benefit type PC Usage, and the FSA Dependent Care would be set up using a custom benefit type PC Usage.
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If a client has benefit plans, other than the listed nine pre-defined benefit types, whose deductions affect employee taxable wages, the custom benefit types may be set up. You can define up to ten different custom benefit types.
If a client has benefit plans other than the nine pre-defined benefit types listed in the previous chapter whose deductions affect employee taxable wages, the custom benefit types may be set up. You can define up to ten different custom benefit types.
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You must configure the pretax criteria for Federal, State, Local level taxation on [IPPC].
(This may also be entered on [IPCU] by a PC Usage with the same pretax criteria of the defined pay component).
You must configure the Pre-Tax criteria for Federal, State, Local level taxation on IPPC.
(This may also be entered on IPCU by a PC Usage with the same Pre-Tax criteria of the defined pay component).
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*Dependent Care
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The [IPPC] element that made up the Benefit Pretax Amounts can be varied by state and will be described further on.
The IPPC element that made up the Benefit Pre-Tax Amounts can be varied by State. These will be described in the next chapter.
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|7801|Federal and State|TX-BEN-01|User-defined Benefit contributions to be exempt from Regular Federal and State Withholding tax\\ \\If this is to be used, a pay component must be set up with this PC Usage\\ \\IPPC Store Results - optional\\ \\On the [IPPC] Header block, click 'Show User Fields' and specify the Pretax criteria \\ \\You can also enter the same Pretax criteria on the [IPCU] Pay Component block by clicking 'Show User Fields'|4.10
|7801|Federal and State|TX-BEN-01|User Defined Benefit contributions to be exempt from Regular Federal and State Withholding tax\\ \\if this is to be used, Pay Component must be set up with this PC Usage\\ \\IPPC Store Results – optional\\ \\on IPPC Header block, click ‘Show User Fields’ and specify Pretax criteria \\ \\user can also enter the same Pretax criteria on IPCU Pay Component block by clicking ‘Show User Fields’|4.10
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|7821|Federal and State|TX-BENSUP-01\\ \\Optional|User Defined Benefit contributions to be exempt from Supplemental Federal and State Withholding tax\\ \\This usage works in conjunction with usage 7801 except this is for Suppl Earnings\\ \\IPPC Element (e.g. TX-BENSUP-01) are made up with list of Benefit pay components that are calculated based on Supplemental Earnings\\ \\If this usage is not set up, Usage 7801 amount will be prorated with the Regular and Supplemental Earnings to derive the Suppl Benefit amount\\ \\If this usage has an empty element (i.e. Element Amount = 0), then no proration between Reg / Sup Earnings|4.10
|7821|Federal and State|TX-BENSUP-01\\ \\Optional|User Defined Benefit contributions to be exempt from Supplemental Federal and State Withholding tax\\ \\This usage works in conjunction with usage 7801 except this is for Suppl Earnings\\ \\IPPC Element (e.g. TX-BENSUP-01) are made up with list of Benefit pay components that are calculated based on Supplemental Earnings\\ \\If this usage is not set up, Usage 7801 amount will be prorated with the Regular and Supplemental Earnings to derive the Suppl Benefit amount\\ \\If this usage has an empty Element (i.e. Element amount = 0), then no proration between Reg / Sup Earnings|4.10
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!!Benefit PC Usages - Legacy User Set Up
!!Benefit PC Usages – Legacy User Set Up
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|6053|Fed|UFWT125|125 plan contributions exempt from Federal Withholding Tax\\ \\Mandatory if 125 is applicable\\ \\A pay component must be set up.\\ \\IPPC Store Results - optional|Legacy|Yes
|6054|Fed|UFWT401|401K/403B plan contributions exempt from Federal Withholding Tax|Legacy|Yes
|6056|Fed|UFSP125|125 plan contributions exempt from Federal Withholding Tax on Supplemental pay|Legacy|Yes
|6057|Fed|UFSP401|401K/403B plan contributions exempt from Federal Withholding Tax on Supplemental pay|Legacy|Yes
|6653|State|USTT125|125 plan contributions exempt from State Withholding Tax\\ \\Uses UFWT125 if this element does not exist|Legacy|Yes
|6654|State|USTT401|401K/403B plan contributions exempt from State Withholding Tax\\ \\Uses UFWT401 if this element does not exist|Legacy|Yes
|6656|State|USTS125|125 plan contributions exempt from State Withholding Tax on Supplemental pay|Legacy|Yes
|6657|State|USTS401|401K/403B plan contributions exempt from State Withholding Tax on Supplemental pay|Legacy|Yes
6053 Fed UFWT125 125 plan contributions exempt from Federal Withholding Tax.
- Mandatory if 125 is applicable
- Pay Component must be set up
- IPPC Store Results - optional Legacy Yes
6054 Fed UFWT401 401K/403B plan contributions exempt from Federal Withholding Tax. Legacy Yes
6056 Fed UFSP125 125 plan contributions exempt from Federal Withholding Tax on Supplemental pay. Legacy Yes
6057 Fed UFSP401 401K/403B plan contributions exempt from Federal Withholding Tax on Supplemental pay. Legacy Yes
6653 State USTT125 125 plan contributions exempt from State Withholding Tax.
Uses UFWT125 if this element does not exist. Legacy Yes
6654 State USTT401 401K/403B plan contributions exempt from State Withholding Tax.
Uses UFWT401 if this element does not exist. Legacy Yes
6656 State USTS125 125 plan contributions exempt from State Withholding Tax on Supplemental pay. Legacy Yes
6657 State USTS401 401K/403B plan contributions exempt from State Withholding Tax on Supplemental pay. Legacy Yes
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For Vertex users who are converting to Symmetry, it is advised to switch to using the new 7901 to7979 series or the 7801+ series, instead of the original Vertex PC list above.
For Vertex users who are converting to Symmetry, there are two options to set up Benefit PC Usages.
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If the Benefit PC Usage 7901 or 7902 is set up, this means the entire set of PC Usages 7901 to 7979 will replace PC Usages 6053 to 6657. UPCALC will ignore the old PC Usages 6053 to 6657 set up
;Option 1:Retain PC usages 6053 to 6657 as above to support 125 and 401K plan exemptions\\UPCALC will use these PC Usages to calculate 125 and 401K exemptions for tax calculation.\\ \\
;Option 2:Set up Benefit PC Usages 7901 to 7979 for 125, 401K, 403B, 457 etc.\\If the first Benefit PC Usage 7901 is set up, this means the entire set of PC Usages 7901 to 7979 will replace PC Usages 6053 to 6657\\UPCALC will ignore the old PC Usages 6053 to 6657 set up.
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It is advised that you switch to using the new Symmetry Benefit Types if your company offers a variety of the plan exemptions that were originally housed together in the 401k type element (ie: 401K & 457). This is advised since Symmetry requires the UPCALC to pass in the CTD and YTD value for each of the benefit types supported. If you continue to use the Vertex method and have an employee who has both a 401K and 457 for example, if the 401k element YTD reaches the annual contribution limit for 401K, the employee’s Federal and State earnings will no longer be reduced by the 401k and 457 amounts as the system will think the employee has reached the 401K annual limit when in fact he/she hasn’t
%%information It is advised that you switch to using the new Symmetry Benefit Types if your company offers a variety of the plan exemptions that were originally housed together in the 401k type element (ie: 401K & 457). This is advised since Symmetry requires the UPCALC to pass in the CTD and YTD value for each of the benefit types supported.\\ \\If you continue to use the Vertex method and have an employee who has both a 401K and 457 for example, if the 401k element YTD reaches the annual contribution limit for 401K, the employee's Federal and State earnings will no longer be reduced by the 401k and 457 amounts as the system will think the employee has reached the 401K annual limit when in fact they haven't.%%
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For Symmetry users or converted users, if a particular Benefit Type is to be used, you should set up a Pay Component on IPPC with the PC Usage as defined above.
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If the Benefit Type is made up by an element, then specify the Element name. (e.g. 125 Regular - proration logic here.)
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On [IPPC], you can optionally turn ON the 'Store Results' toggle to store the amounts on 'Pay Amounts' tab. This pay component will be stored on IPPH 'Pay Jurisdiction' tab regardless of the 'Store Results' toggle.
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!!Benefit PC Usages - Symmetry User Set Up
!!Benefit PC Usages – Symmetry User Set Up
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!Federal Level - Nine Pre-defined Benefits
!Federal Level – 9 Pre-defined Benefits
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At Federal level for the nine pre-defined Benefit types, Usages 7901 to 7909 (suggested Element UFWT125 to UFWTIRA) must be set up with a [IPPC] pay component for Regular Federal Withholding tax calculation if any of these PC usages are applicable.
At Federal level for the 9 pre-defined Benefit types, Usages 7901 to 7909 (suggested Element UFWT125 to UFWTIRA) must be set up with IPPC pay component for Regular Federal Withholding tax calculation if any of these PC usages are applicable
For Supplemental Federal Withholding tax calculation, Usage 7921 to 7929 (suggested Element UFSP125 to UFSPIRA) may optionally be set up with IPPC pay component if these benefit amounts are based on list of Pay Components that are different than those elements in Usage 7901 to 7909
If Supplemental Usage 7921 to 7929 are not set up with IPPC pay components, then the Benefit amounts from Regular Usage 7901 to 7909 will be prorated among Regular Earnings and Supplemental Earnings
If Usage 7921 to 7929 are set up and the IPPC pay component is with an EMPTY Element (or the Element value = 0), then the Benefit amounts from Usage 7901 to 7909 will NOT be prorated among Regular Earnings and Supplemental Earnings, this set up means the Supplemental Benefit exemptions are based on the Supplemental Element value, the Element value of zero means to suppress the benefit proration logic
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For Supplemental Federal Withholding tax calculation, Usage 7921 to 7929 (suggested Element UFSP125 to UFSPIRA) may optionally be set up with [IPPC] pay component if these benefit amounts are based on list of pay components that are different than those elements in Usage 7901 to 7909.
!State Level – 9 Pre-defined Benefits
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If Supplemental Usage 7921 to 7929 are not set up with [IPPC] pay components, then the Benefit amounts from Regular Usage 7901 to 7909 will be prorated among Regular Earnings and Supplemental Earnings.
At State level for the 9 pre-defined Benefit types, Usages 7951 to 7959 (suggested Element USTT125 to USTTIRA) may be set up for Regular State Withholding tax calculation if any of these PC usages are applicable
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If Usage 7921 to 7929 are set up and the [IPPC] pay component is with an EMPTY element (or the Element value = 0), then the Benefit amounts from Usage 7901 to 7909 will NOT be prorated among Regular Earnings and Supplemental Earnings. This set up means the Supplemental Benefit exemptions are based on the Supplemental Element value, the Element value of zero means to suppress the benefit proration logic.
If State Usage 7951 to 7959 are not set up, then Federal Usage 7901 to 7909 will be used
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!State Level - Nine Pre-defined Benefits
If State Supplemental Usage 7971 to 7979 are not set up, then Federal Supplemental Usage 7921 to 7929 will be used
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At State level for the nine pre-defined Benefit types, Usages 7951 to 7959 (suggested Element USTT125 to USTTIRA) may be set up for Regular State Withholding tax calculation if any of these PC usages are applicable.
Same benefit proration logic applies to the State level benefit usage set up
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If State Usage 7951 to 7959 are not set up, then Federal Usage 7901 to 7909 will be used.
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If State Supplemental Usage 7971 to 7979 are not set up, then Federal Supplemental Usage 7921 to 7929 will be used.
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Same benefit proration logic applies to the State level benefit usage set up.
!Benefit PC Usages – IPPC Pre-Tax Criteria Override
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IPCU PC Usages are supplied to users with UPCALC software release
For each applicable Benefit PC Usage 7801 to 7979, user must define a pay component on IPPC screen and enter the PC Usage for this pay component, then enter the Element name that made up the Benefit amount for this Benefit Type pay component
If user wants to specify or override the Pre-tax criteria for this Benefit Type Pay Component, click the ‘Show User Fields’ icon
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!Pre-Defined Benefit Type Pay Component and Element Set Up
If the 9 Pre-defined Benefit Types are defined with these user-defined Pre-Tax Criteria, this PC Usage is treated as a Custom Benefit Type, this Pre-Tax set up overrides the Pre-defined taxability of the benefit type
For the 10 Custom Benefit Types, these Pre-tax criteria must be set up.
After a Pay Component is defined on IPPC screen for a Benefit PC Usage, user can go into IPCU screen for that PC Usage to view the Pay Component set up.
On IPCU screen Pay Component block, user can click the ‘Show User Fields’ icon to edit the same Pre-Tax criteria set up.
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[IPCU] PC Usages are supplied to users with the taxation software release.
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For each applicable Benefit Type PC Usage (7801 – 7979), the user must define a Pay Component in [IPPC]. On [IPPC] for the new Benefit Type Pay Components, the user must also specify an Element. The element must contain all of the appropriate taxable benefit deduction pay components for that particular benefit type. These Elements are used for all employees by [UPCALC] for all States.
!Benefit Element – for All States
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The SymmetryTaxEngine will determine which of the nine pre-defined benefit types are taxable for each level of taxation.
On IPPC screen for the Pay Component of each Benefit PC Usage, user must specify an Element that made up the Benefit Amount.
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e.g. 401K Usage 7902 IPPC Element Name: ‘TX-401K’,
Custom Benefit Usage 7801 IPPC Element Name: ‘TX-BEN-01’
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e.g.\\
PC Usage 7902 Pre-FWT 401K Exemption, IPPC Element Name: ‘FWT 401K EXEMPT’
These Element names are used for all employees by UPCALC for all States
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!Custom Benefit Type PC & Element Set Up - For All States
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For the benefits that do not fall under the nine pre-defined by Symmetry clients may set up ‘custom’ benefit types. These are set up similar to the nine pre-defined types.
!Benefit Element - Varies by States
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On [IPPC] a new Pay Component must be defined for each ‘custom’ Benefit Type needed. The Pay Component must specify an Element with the benefit deduction pay components for the custom benefit type being created. These Element names are used for all employees by [UPCALC] for all States.
Some States require different Benefit Amounts to be varied for some Benefit Types.
UPCALC provides capability to define different Benefit Element for each Benefit Type to be varied by State.
On IPPC screen for the Pay Component of the Benefit Usage, a generic Benefit Element name must be set up, this Element is used for all States. For States that have a different Benefit amount, set up a different Benefit Element name on IPPE screen that is made up from the generic Element Name concatenated with a hyphen and the State code as the suffix
e.g. IPPE Generic Element Name: ‘TX-BEN-01’
IPPE Specific State Element Name for New Jersey ‘TX-BEN-01-NJ’
IPPE Specific State Element Name for New York ‘TX-BEN-01-NY’
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e.g.\\
PC Usage 7801 Pre-Reg Custom Benefit 01, IPPC Element Name: ‘PFRS PERS EX’
UPCALC will append the State Code with a hyphen to the generic Element name to retrieve the specific Element with the Pay Header ‘s Work State, if Element does not exist for the Work State, then IPPC generic Benefit Element name will be used
This functionality is applicable to all Benefit Types including the 9 Pre-defined Benefit Types and 10 custom Benefit Types.
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IPPE element ‘PFRS PERS EX’ includes all of the benefit deduction pay components which could affect an employee’s taxable wages
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!Custom Benefit Types - IPPC Pretax Criteria Override
!Benefit Element – IPPE Pre-Tax Criteria Override
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[IPCU] PC Usages are supplied to users with [UPCALC] software release.
Some States require different Pre-tax taxability for some Benefit Types.
UPCALC provides capability to define different Benefit Pre-tax criteria by State specific Elements.
After the State Element is defined with the State code suffix, user can define the Pre-Tax criteria on IPPE screen for this State Element
e.g. IPPE Generic Element Name: ‘TX-BEN-01’
IPPE Specific State Element Name for New Jersey ‘TX-BEN-01-NJ’
IPPE Specific State Element Name for New York ‘TX-BEN-01-NY’
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For each applicable Custom Benefit Type PC Usage defined, the user MUST specify the Pre-tax criteria for each tax type. This is done using User Fields in [IPPC]. [UPCALC] will pass the values of these user fields onto the SymmetryTaxEngine so the taxable wages are adjusted appropriately.
On IPPE screen, click the ‘Show User Fields’ icon
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If you wish to specify or override the Pretax criteria for this Benefit Type Pay Component, click the 'Show User Fields' icon.
The IPPE Pre-Tax criteria set up overrides the IPPC Pre-tax criteria set up of each Benefit Type.
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Available User Fields to define the Pre-Tax Criteria are:
*US Pre-Tax Federal Exemption\\
*US Pre-Tax FICA Exemption\\
*US Pre-Tax Medicare Exemption\\
*US Pre-Tax State Exemption\\
*US Pre-Tax SUI Exemption\\
*US Pre-Tax SDI Exemption\\
*US Pre-Tax Local Exemption
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For the nine pre-defined benefit types, the SymmetryTaxEngine will adjust the taxable earnings appropriately for each level of taxation. However if any of the nine Pre-defined Benefit Types are defined with these user-defined Pre-Tax Criteria, this PC Usage is treated as a Custom Benefit Type, this Pre-Tax set up overrides the Pre-defined taxability of the benefit type.
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For the ten Custom Benefit types, these Pretax criteria must be set up.
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On the [IPCU] screen Pay Component block, you can click the 'Show User Fields' icon to edit the same Pretax criteria setup.
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!Custom Benefit Type Element - Varies by States
Since not all States follow the same exemption rules for the various Custom Benefit Types, users have the ability to create state specific elements which have their own pre-tax criteria defined. If the user does business in multiple states which have differing exemption rules for these ‘custom’ benefit types, an additional element is required per state. The Pre-Tax Criteria User Fields available in [IPPC] are also available in [IPPE], using these user fields the user can define the pre-tax criteria for each state.
The State specific element must be created with the same name as the generic element created in the previous section. The name must be concatenated with a hyphen and the State code as the suffix.
After the State specific Element is defined with the State code suffix, the user can define the Pre-Tax criteria on [IPPE] screen for this State Element using the User Fields. The [IPPE] Pre-Tax criteria set up overrides the [IPPC] Pre-tax criteria set up of each Benefit Type.
[UPCALC] will append the State Code with a hyphen to the generic Element name to retrieve the specific Element with the Pay Header ‘s Work State, if the Element does not exist for the Work State, then the [IPPC] generic Benefit Element name will be used
e.g. Using the previous example of PFRS PERS EX shown in the previous sections for Custom Benefit, New York has different exemption rules for Pension and PERS than New Jersey thus a state specific element is needed.
e.g.\\
IPPE Generic Element Name: ‘PFRS PERS EX’\\
IPPE Specific State Element Name for New York: ‘PFRS PERS EX-NY’\\
IPPE Specific State Element Name for New Jersey: ‘PFRS PERS EX-NJ’\\
!Custom Benefit Type Element – Amounts Vary by States
Some States require different Benefit Amounts to be varied for some Benefit Types.
[UPCALC] provides capability to define different Benefit Element for each Benefit Type to be varied by State.
On [IPPC] for the Pay Component of the Benefit Usage, a generic Benefit Element name must be set up, this Element is used for all States. For States that have a different Benefit amount, set up a different Benefit Element name on [IPPE] screen that is made up from the generic Element Name concatenated with a hyphen and the State code as the suffix
e.g.\\
IPPE Generic Element Name: ‘TX-BEN-01’\\
IPPE Specific State Element Name for New Jersey: ‘TX-BEN-01-NJ’\\
IPPE Specific State Element Name for New York: ‘TX-BEN-01-NY’\\
[UPCALC] will append the State Code with a hyphen to the generic Element name to retrieve the specific Element with the Pay Header ‘s Work State, if Element does not exist for the Work State, then [IPPC] generic Benefit Element name will be used
This functionality is applicable to all Benefit Types including the nine Pre-defined Benefit Types and ten custom Benefit Types.
This page (revision-15) was last changed on 26-Nov-2021 10:22 by jescottTop