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US Federal Tax Calculation
US Federal Tax Calculation

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[{TableOfContents }]
[{TableOfContents }]
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!!Overview
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!!!Federal Tax Calculation
!!General Set Up
__UDGNIS__\\This is the process to load all US Tax jurisdictions into [IDCO], [IDSP], [IDCN], [IDCI], [IDMN], [IDSD], [IDZR], and [IDTX]. \\ \\
__UPUTR__\\ This is the process to load all US Tax Rates and States Miscellaneous parameters.\\ After UPUTR is run, the applicable Tax Rates and Miscellaneous Parameters can be viewed by State in [IPUTR] and [IPUTP].\\ \\
__IPUTR__\\ US Tax Rates can be viewed by State and the Overridden Rates and Wage Base entered.\\ Some SUTA surcharge calculations for specific states can be suppressed by checking the 'Do not Calculate' toggle. \\ \\
__IPUTP__\\ The US Tax Miscellaneous parameters can be be viewed by the States that are applicable for [IPRLU]. \\ \\
__IDGV__\\ This form can optionally contain specific override rates and Wage Bases by Government Registration for each registration from the pay header's group. IDGV overridden amounts take precedence over the [IPUTR] overridden amounts.\\ \\
__IPPC__\\ Pay components must be set up with applicable [IPCU] PC Usages for US taxation.\\ \\
__IDTX__ Applicable Tax Jurisdictions that are paid by employees are entered here. On the [IPPH]/[IEPI], [IEAS], [IDLN], etc. forms that require a tax jurisdiction, the 'Tax Jurisdiction Editor Utility' dialog box can be used to enter the jurisdiction on [IDTX].\\ \\
__IPRLU/IPRLUS__\\ Each employee must be set up with the applicable tax methods. Miscellaneous Tax parameters must be set up by the states that need to be paid.\\ \\
__UPRLU__\\ This process audits the US Tax Filing Information and generates [IPRLU] Miscellaneous Tax Parameters information according to [IMCT] set up.\\ \\
__IPPH__\\
*The 'Pay Header' tab must define the default Work and Home jurisdictions.
*The 'Pay Lines' tab, 'Jurisdiction' field must define the Work Jurisdiction of this pay line.
* After the Trial Calc or [UPCALC], the 'Pay Amounts' tab contains all US Taxation amounts, in summary, that are used for the calculation of net pay.
*The 'Pay Jurisdiction' tab contains the default Work and Home jurisdictions.
*After Trial Calc or [UPCALC], the 'Pay Jurisdiction' tab contains all US Taxation amounts, by jurisdictions, in detail.\\ \\
Audience
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!IPUTP - Federal Tax Parameters
When [UPUTR] is run, it loads in a list of federal tax parameters for Symmetry Federal Tax calculation.
\\ \\
On [IPUTP], the following Federal tax parameters are available to be used on the [IPRLU]/[IPRLUS] forms:
* IRS_MAX_EXEMPTIONS
* APPLY_BENEFIT_WAGE_LIMIT
All users who are responsible to do the Payroll Tax Calculation in the Pay cycle process.
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%%information These parameters will not automatically be added to [IPRLU]/[IPRLUS] by the [UPRLU] process for all employees. [IPRLU]/[IPRLUS] information is required to be manually added for employees who are eligible for each parameter.%%
Prerequisites
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__IRS_MAX_EXEMPTIONS__
*IRS maximum number of exemptions allowed. Optional, numeric
*Allows an employer to define on the employee's [IPRLU]/[IPRLUS] form the maximum number of exemptions allowed for this employee as indicated by the IRS in a 'lock-in-letter'.
*[UPCALC] will cap the employee's 'Federal # of Exemptions' with the value from [IPRLU]/[IPRLUS] 'IRS_MAX_EXEMPTIONS' parameter.
*Any number provided will override the 'Federal # of Exemptions', including 0.
*Do not provide a default value
\\
__APPLY_BENEFIT_WAGE_LIMIT__
*Optional, alphanumeric
*Allows a user to specify if the Benefit Annual Wage Limit should be applied by the SymmetryTaxEngine when an employee’s wages reach the $250 000 limit. By applying the limit, when an employee reaches the limit (Regular and Supplemental wages combined), the employee’s 401k / 457 deductions become taxable. By not applying the annual limit, when an Employee reaches this annual wage the deductions are not taxable for Federal. This is typically used when an employee’s Supplemental wages should Not be considered in the annual wage equation.
All users must have a thorough understanding of the Payroll Pay Cycle UPCALC process.
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!IPUTR - Federal Tax Rates
When [UPUTR] is run, it loads in a list of Federal Tax rates for the Symmetry Federal tax calculation.
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*On [IPUTR], when the State is defined as 'Federal' the Federal Tax Rates can be viewed.
*Each Tax Identifier can provide the default Tax Rates and Wage Base to be used for Federal tax calculation.
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%%warning __IMPORTANT:__ For the ER_FUTA identifier, users MUST enter their own Employer FUTA rate (provided by the government) on the 'Override Tax Rate' field. Symmetry requires this FUTA Rate to be passed into the Symmetry Tax Engine, otherwise ER FUTA will not be calculated.%%
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!IPRLU - US Tax Filing Information
Both [IPRLU] and [IPRLUS] can be used to maintain US Tax Filing Information for an employee.\\
__IPRLU__ contains all US Tax Filing Information for both Vertex and Symmetry Tax users. \\
__IPRLUS__ contains the US Tax Filing Information for Symmetry Tax users only:
!!Federal Tax Calculation
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*The [Federal|IPRLU#FederalTab], [State|IPRLU#StateTab] and [Local|IPRLU#LocalTab] tabs must define all tax methods and eligibility information. \\
!!!General Set Up
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* For Federal Tax Calculation, the '# of Exemptions' must be entered on the [Federal|IPRLU#FederalTab] tab, if an employee has an IRS letter that indicates the maximum number of exemptions allowed. Then, on either the [Miscellaneous|IPRLU#MiscellaneousTab] tab or the [State|IPRLU#StateTab] tab, the IRS_MAX_EXEMPTIONS Misc. Identifier must be defined.
\\ \\
----
UDGNIS - this is the process to load all US Tax Jurisdictions into IDCO, IDSP, IDCN, IDCI, IDMN, IDSD, IDZR, IDTX
UPUTR - this is the process to load all US Tax Rates and States Miscellaneous Parameters, after UPUTR is run, user can go into IPUTR and IPUTP screen to view the applicable Tax Rates and Miscellaneous Parameters by State
IPUTR - user may view US Tax Rates by States and enter the Overridden Rates and Wage Base
- user may suppress some SUTA Surcharge Calculation for some States by checking the ‘Do not Calculate’ toggle
IPUTP - user may view US Tax Miscellaneous Parameters by States that are applicable for IPRLU screen
IDGV - this screen may optionally contain specific override Rates and Wage Bases by Government Registration for each Registration from Pay Header’s Group
- IDGV overridden amounts take precedence over the IPUTR overridden amounts
IPPC - Pay Components must be set up with applicable IPCU PC Usages for US Taxation
IDTX - allows user to enter applicable Tax Jurisdictions that are paid by employees
- on IPPH / IEPI, IEAS, IDLN screens etc that requires a Tax Jurisdiction, the user can pop into the ‘Tax Jurisdiction Editor Utility’ Dialog Box to enter the Jurisdiction on IDTX screen
IPRLU / IPRULS - each employee must be set up with the applicable Tax Methods
- Miscellaneous Tax Parameters must be set up by States that need to be paid
UPRLU - this process audits the US Tax Filing Information and generates IPRLU Miscellaneous Tax Parameters information according to IMCT set up
IPPH - PAY HEADER Tab must specify the default Work Jurisdiction and Home Jurisdiction
- PAY LINES Tab Jurisdiction field must specify the Work Jurisdiction of this Pay Line
- after Trial Calc or UPCALC, PAY AMOUNTS Tab contains all US Taxation amounts in summary that are used for the calculation of net pay
- PAY JURISDICTION Tab contains the default Work Jurisdiction and Home Jurisdiction
- after Trial Calc or UPCALC, PAY JURISDICTION Tab contains all US Taxation amounts by Jurisdictions in detail
!!!IPUTP – Federal Tax Parameters
When UPUTR is run, it loads in a list of Federal Tax Parameters for Symmetry Federal Tax Calculation.
On IPUTP screen, the following Federal tax parameters are available to be used on IPRLU / IPRLUS screen.
 401K_CATCHUP
 IRS_MAX_EXEMPTIONS
These parameters will not automatically be added to IPRLU / IPRLUS by UPRLU process for all employees. Users are required to manually add to IPRLU / IPRLUS for employees who are eligible for each parameter.
401K_CATCHUP
- Optional, character, 401K Limit Catch Up Option
- indicates to Symmetry if the employee is enrolled in a 401k Catch up plan
- the annual regular 401k contribution limit is defined by the IRS, e.g. $16,500. if the user is enrolled in 401k plan with annual contribution limit greater than this regular limit, this parameter allows the 401k maximum contribution to exceed the IRS limit for Benefit Pre-tax calculation
- 'DEFAULT'-Catch Up is not allowed, 'YES'-Catch Up is allowed, 'NO'-Catch Up is not allowed.
- If 401K Catch up option is applicable to all employees, user can enter ‘YES’ in IPUTP Default Value, otherwise each employee can specify the value for this option on IPRLU /IPRLUS screen
IRS_MAX_EXEMPTIONS
- Optional, numeric, IRS maximum number of exemptions allowed
- allows an employer to indicate on the employee’s IPRLU / IPRLUS screen the maximum number of exemptions allowed for this employee as indicated by the IRS in a ‘lock-in-letter’
- UPCALC will cap the employee’s Federal ‘# of exemptions’ with the value from IPRLU / IPRLUS ‘IRS_MAX_EXEMPTIONS’ parameter
!!!IPUTR – Federal Tax Rates
When UPUTR is run, it loads in a list of Federal Tax Rates for Symmetry Federal Tax Calculation.
- on IPUTR screen, user can select the State = ‘Federal’ to view the Federal Tax Rates.
- each Tax Identifier may provide the default Tax Rates, Wage Base to be used for Federal Tax calculation
IMPORTANT:
- for ER_FUTA Identifier, user MUST enter their own Employer FUTA rate that is provided by the government on the ‘Override Tax Rate’ field, Symmetry requires this FUTA Rate to be passed into the Symmetry Tax Engine, otherwise ER FUTA will not be calculated
!!!IPRLU – US Tax Filing Information
Both IPRLU and IPRLUS screens can be used to Maintain US Tax Filing Information for an employee.
IPRLU - contains all US Tax Filing Information for both Vertex and Symmetry Tax users
IPRLUS - contains US Tax Filing Information for Symmetry Tax users only
- the FEDERAL tab, STATE tab and LOCAL Tab must specify all Tax Methods and eligible information
- for Federal Tax Calculation, the ‘# of Exemptions’ must be entered on the FEDERAL Tab, if the employee has an IRS letter to indicate the maximum number of exemptions allowed for this employee, then enter on IPRLU MISCELLANEOUS Tab or IPRLUS STATE Tab with Misc. Identifier ‘IRS_MAX_EXEMPTIONS’
- if the employee is eligible for 401K Catch up option, enter with Misc. Identifier ‘401K_CATCHUP’
- if the 401K Catch up option is applicable to all Employees for the entire company, there is no need to enter on IPRLLU / IPRLUS for every employee, the user can specify the Default Value of ‘YES’ on IPUTP to indicate the Catch Up Option default for all employees
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!PC Usage - Federal Tax
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On [IPPC], set up the pay components for these PC Usages for federal tax calculation:
!!!PC Usage – Federal Tax
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||Usage||Description
|6001|FWT Deduction - Regular Tax
|6002|FWT Deduction - Additional Tax
|6003|FWT Deduction - Supplemental Tax
|6004|FWT Earnings - Regular Tax
|6005|FWT Earnings - Regular Tax
|6051|Pre-FWT Earnings - Reg Tax Table Method (PPE)
|6052|Pre-FWT Earnings - Reg Tax % Method (PPE)
|6053|Pre-FWT 125 Exemption - Reg Tax (PPE)
|6054|Pre-FWT 401K Exemption - Reg Tax (PPE)
|6055|Pre-FWT Earnings - Supplemental Tax (PPE)
|6056|Pre-FWT 125 Exemption - Supplemental Tax (PPE)
|6057|Pre-FWT 401K Exemption - Supplemental Tax (PPE)
|6058|Pre-FIT Hours - Total Hours worked (PPE)
|7901 to|Pre-FWT 125 Exemption - Reg Tax (PPE)
|7928|Pre-FWT HSA Exemption -Suppl Tax (PPE)
|7801 to|Pre-Reg Custom Benefit 01 - Reg Tax (PPE)
|7830|Pre-Sup Custom Benefit 10 - Suppl Tax (PPE)
\\
On IPPC screen, please set up Pay Components for these PC Usages for Federal tax Calculation
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!PC Usage - Federal Insurance Contribution Act (FICA) Tax
Federal Insurance Contributions Act Tax (FICA) is imposed by the federal government on both employees and employers. The FICA tax is calculated using Pay Component Usages 6201 - 6261.
Usage Description
6001 FWT Deduction - Regular Tax
6002 FWT Deduction - Additional Tax
6003 FWT Deduction - Supplemental Tax
6004 FWT Earnings - Regular Tax
6005 FWT Earnings - Regular Tax
6051 Pre-FWT Earnings - Reg Tax Table Method (PPE)
6052 Pre-FWT Earnings - Reg Tax % Method (PPE)
6053 Pre-FWT 125 Exemption - Reg Tax (PPE)
6054 Pre-FWT 401K Exemption - Reg Tax (PPE)
6055 Pre-FWT Earnings - Supplemental Tax (PPE)
6056 Pre-FWT 125 Exemption - Supplemental Tax (PPE)
6057 Pre-FWT 401K Exemption - Supplemental Tax (PPE)
6058 Pre-FIT Hours - Total Hours worked (PPE)
7901 to Pre-FWT 125 Exemption - Reg Tax (PPE)
7928 Pre-FWT HSA Exemption -Suppl Tax (PPE)
7801 to Pre-Reg Custom Benefit 01 - Reg Tax (PPE)
7830 Pre-Sup Custom Benefit 10 - Suppl Tax (PPE)
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||Usage||Description
|6201|FICA Employee Deduction
|6202|FICA Employee Earnings
|6210|FICA Employer Contribution
|6211|FICA Employer Earnings
|6251|Pre-FICA Employee Earnings (PPE)
|6261|Pre-FICA Employer Earnings (PPE)
\\
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!PC Usage - Medicare Tax
Medicare Tax is an employer and employee paid tax. The Medicare tax is calculated using Pay Component Usages 6501 - 6552.
!!!PC Usage – Federal Insurance Contribution Act (FICA) Tax
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||Usage||Description
|6501|Medicare Employee Deduction
|6502|Medicare Employee Earnings
|6503|Medicare Employer Contribution
|6504|Medicare Employer Earnings
|6551|Pre- Medicare Employee Earnings (PPE)
|6552|Pre- Medicare Employer Earnings (PPE)
\\
Federal Insurance Contributions Act Tax (FICA) is imposed by the Federal government on both employees and employers. The FICA tax is calculated using Pay Component Usages 6201 – 6261.
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!PC Usage - Federal Unemployment Tax Act (FUTA)
Usage Description
6201 FICA Employee Deduction
6202 FICA Employee Earnings
6210 FICA Employer Contribution
6211 FICA Employer Earnings
6251 Pre-FICA Employee Earnings (PPE)
6261 Pre-FICA Employer Earnings (PPE)
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Federal Unemployment Tax Act (FUTA) is an employer paid tax. The FUTA tax is calculated using Pay Component Usages 6401 - 6451.
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||Usage||Description
|6401|FUTA Employer Contribution
|6402|FUTA Employer Earnings
|6451|Pre-FUTA Employer Earnings (PPE)
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!!!PC Usage – Medicare Tax
Medicare Tax is an employer and employee paid tax. The Medicare tax is calculated using Pay Component Usages 6501 – 6552.
Usage Description
6501 Medicare Employee Deduction
6502 Medicare Employee Earnings
6503 Medicare Employer Contribution
6504 Medicare Employer Earnings
6551 Pre- Medicare Employee Earnings (PPE)
6552 Pre- Medicare Employer Earnings (PPE)
!!!PC Usage – Federal Unemployment Tax Act (FUTA)
Federal Unemployment Tax Act (FUTA) is an employer paid tax. The FUTA tax is calculated using Pay Component Usages 6401 – 6451.
Usage Description
6401 FUTA Employer Contribution
6402 FUTA Employer Earnings
6451 Pre-FUTA Employer Earnings (PPE)
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#IPUTR
#*Enter the rate or wage base provided by the government on the Override fields
#*These overrides are applicable for the entire company for the federal calculations
#IDGV
#*If there is a specific rate provided by the government for a different Registration #, update the 'Reg Type' field on [IDGV]. This overrides the [IPUTR] Rate.
#*[UPCALC] retrieves [IDGV] by Government Registration from the employee's Pay Header group
\\ \\
(1) IPUTR - enter the Rate or Wage Base provided by the Government on the Override fields
- these Overrides are applicable for the entire company for the Federal calculations
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If you do business in a State that has been given a FUTA Tax Credit reduction, the new FUTA tax rate for that specific State can be entered on [IDGV] for the State.
In [IDGV], add a new entry for the specific State, define the Registration Type as 'US SUI Regist 1', and define the Govt Rate Type as 'US FUTA Rate'. This State specific FUTA rate will be picked up by the UPCALC program when an employee is being paid in that State.
(2) IDGV - if there is a specific rate given by the government for different Registration #,
- then enter on IDGV by ‘Reg Type’, this overrides the IPUTR Rate
- UPCALC retrieves IDGV by Government Registration from Employee’s Pay Header Group
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!PC Usage - Railroad Taxation
Railroad taxation is calculated using Pay Component Usages 6301 - 6356.
\\ \\
If you do business in a state that has been given a FUTA Tax Credit reduction, the new FUTA tax rate for that particular state may be entered in IDGV for the state. In IDGV add a new entry for the specific state, select Registration Type ‘US SUI Regist 1’, the Govt Rate Type should be ‘US FUTA Rate’. This state specific FUTA rate will be picked up by the UPCALC program when an employee is being paid in that state.
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!!!PC Usage – Railroad Taxation
PC Usages 6301 – 6356
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!UPCALC Example - Federal Withholdings
[US Federal Tax Calculation_01.JPG]
|IPRLU Federal Filing Status:|= Single
|Regular Earnings:|= 1923.08
|Supplemental Earnings:|= 100.00
\\ \\
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__Pre-Tax Benefits:__
|125 Plan| 145.89
|401K Plan| + 112.54
|403B Plan| + 20.84
|457 Plan| + 16.18
|Simple IRA Plan|+ 14.97
|__Total__|= 310.42
\\ \\
!!!UPCALC Example - Federal Withholdings
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__Prorate Pre-Tax Benefits to Regular and Supplemental Earnings:__
|Reg Earn Pre-Tax Benefit|= 1923.08 / 2023.08 * 310.42|= 295.08
|Sup Earn Pre-Tax Benefit|= 100 / 2023.08 * 310.42|= 15.34
\\ \\
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__FIT Withholding:__
|PC 8005 FIT Earn|= 1923.08 - 295.08|= 1628.00
|PC 8015 FSP Earn|= 100.00 - 15.34|= 84.66
| | |
|PC 6000 FIT Tax|= Based on PC 8005 $1628.00|= 237.77
|PC 6010 FSP Tax|= Based on PC 8015 $84.66 x 25%|= 21.17
\\ \\
----
IPRLU Federal Filing Status = Single
Regular Earnings: = 1923.08
Supplemental Earnings: = 100.00
Pre-Tax Benefits:
125 Plan + 401K Plan + 403B Plan + 457 Plan + Simple IRA Plan
145.89 + 112.54 + 20.84 + 16.18 + 14.97 = 310.42
Prorate Pre-Tax Benefits to Regular and Supplemental Earnings:
Reg Earn Pre-Tax Benefit = 1923.08 / 2023.08 * 310.42 = 295.08
Sup Earn Pre-Tax Benefit = 100 / 2023.08 * 310.42 = 15.34
FIT Withholding:
PC 8005 FIT Earn = 1923.08 – 295.08 = 1628.00
PC 8015 FSP Earn = 100.00 – 15.34 = 84.66
PC 6000 FIT Tax = Based on PC 8005 $1628.00 = 237.77
PC 6010 FSP Tax = Based on PC 8015 $84.66 x 25% = 21.17
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!FICA Wage < FIT Wage Example
[US Federal Tax Calculation_02.JPG]
\\ \\
When an Employee works for Regular Employment and Railroad Employment, FICA YTD and RRTA YTD are both used in the FICA calculation.
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|FIT_Wages|Usage 6051 Pre FWT Earnings|6676.24
|FICA_Wages|Usage 6261 Pre-FICA Employer Earnings|6596.13
\\
!!!FICA Wage < FIT Wage Example
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|PC 8005 FIT Earn|= FIT_Wages - 125 - 401K|= 6676.24 - 200.33 - 239.57|= 6236.34
|PC 8039 FICA ER Earn|= FICA_Wages - 125|= 6596.13 - 200.33|= 6395.80
\\ \\
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__FICA ER - No Self Adjust Method__
|PC 7031 FICA ER|= FICA ER Earn x 0.062|= 6395.80 x 0.062|= 396.54
|PC 7030 Medicare ER|= Med ER Earn x 0.0145|= 6395.80 x 0.0145|= 92.74
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\\ \\
__FICA ER - Self Adjust Method__\\
This employee uses the 'Self-Adjust Method'. \\
|FIT_Wages.ctd|Usage 6051 Pre FWT Earnings|= 6676.24
|FIT_Wages.ytd|Usage 6051 Pre FWT Earnings|= 51747.29
|FSP_Wages.ctd|Usage 6055 Pre-FIT Suppl Earns|= 0
|FSP_Wages.ytd|Usage 6055 Pre-FIT Suppl Earns|= 5700
|FICA_Wages.ctd|Usage 6261 Pre-FICA Employer Earnings|= 6596.13
|FICA_Wages.ytd|Usage 6261 Pre-FICA Employer Earnings|= 51057.92
\\ \\
If FICA Earnings (FICA_Wages.ctd) is different than FIT Earnings (FIT_Wages.ctd), then calculate the difference between the Wages for FICA and FIT (such as Usage 6261 - Usage 6051). This is called 'Additional FICA Wages'.
|CTD Usage 6261 Pre-FICA Employer Earnings:| |6596.13
|CTD Usage 6051 Pre FWT Earnings:| |- 6676.24
|CTD Addn FICA Wages:|6596.13 - 6676.24|= -80.11 (negative means FICA Earn < Pre-FWT Earn)
\\
|YTD Usage 6261 Pre-FICA Employer Earnings:| |51057.92
|YTD Usage 6051 Pre FWT Earnings:| |51747.29
|YTD Addn FICA Wages:|51057.92 - 51747.29|= -689.37 (negative means FICA Earn < Pre-FWT Earn)
\\
|Addn FICA_Wages.ctd|= -80.11|FICA.ytdEE|= 3459.44 (dedn so far)|MEDI.ytd = 809.06 (dedn so far)
|Addn FICA_Wages.ytd|= -689.37|FICA.ytdER|= 3459.44 (dedn so far)|
\\
|YTD 125 Total (from YTD):|= 1649.91 (prorate to YTD FIT / FSP Wages, such as 51747.29 and 5700)
|YTD 401K Total (from YTD):|= 2026.80 (prorate to YTD FIT / FSP Wages, such as 51747.29 and 5700)
\\
|FIT_ben_125.ctd:|= 200.83|FSP_ben_125.ctd:|= 0|
|FIT_ben_125.ytd:|= 1486.20|FSP_ben_125.ytd:|= 163.71|(1486.20 + 163.71 = 1649.91)
|FIT_ben_401K.ctd:|= 239.57|FSP_ben_401K.ctd:|= 0|
|FIT_ben_401K.ytd:|= 1825.70|FSP_ben_401K.ytd:|= 201.1|(1825.70 + 201.1 = 2026.80)
\\
__Calculate FICA Wages for the Year:__
|FIT_Wages.ctd|6676.24
|Addn FICA_Wages.ctd|+ (-80.11)
|FIT_Wages.ytd| + 51747.29
|Addn FICA_Wages.ytd| + (-689.37)
|__Total__|= 57654.05
\\
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|FSP_Wages.ctd|0
|FSP_Wages.ytd|+ 5700
|__Total__|= 5700
\\
Employee works for Regular Employment and Railroad Employment. FICA YTD and RRTA YTD are both used in FICA Calculation.
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|FICA_Wages_Total|57654.05 + 5700|= 63354.05
\\
__Calculate 125 Exemption for the Year:__
|FIT_ben_125.ctd|200.83
|FSP_ben_125.ctd|+ 0
|FIT_ben_125.ytd|+1486.20
|FSP_ben_125.ytd|+163.71
|__FICA_125_Total__|=1850.74
\\
__FICA ER Calculation:__
|FICA_Wages_Total|63354.05
|FICA_125_Total|- 1850.74
|__FICA Taxable Earnings__|= 61503.31
\\
FIT_Wages Usage 6051 Pre FWT Earnings 6676.24
FICA_Wages Usage 6261 Pre-FICA Employer Earnings 6596.13
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|FICA Taxable Earnings|61503.31
|FICA Rate|x 0.062
|__FICA ER Contribution__|= 3813.21
\\
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|YTD PC 7031 FICA ER|1810.19
|PC 7033 RR Tier1 Soc ER|1649.25
|__FICA ER YTD So Far__|= 3459.44 (FICA.ytdER so far)
\\
PC 8005 FIT Earn = FIT_Wages – 125 - 401K = 6676.24 – 200.33 – 239.57 = 6236.34
PC 8039 FICA ER Earn = FICA_Wages – 125 = 6596.13 – 200.33 = 6395.80
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|FICA ER Contribution|3813.21
|FICA ER YTD So Far|- 3459.44
|__FICA ER This Pay__|= 353.77 (RPREGC slight rounding 353.80)
\\
(1) FICA ER – No Self Adjust Method
PC 7031 FICA ER = FICA ER Earn x 0.062 = 6395.80 x 0.062 = 396.54
PC 7030 Medicare ER = Med ER Earn x 0.0145 = 6395.80 x 0.0145 = 92.74
This employee uses ‘Self-Adjust method’, please see next page.
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__Medicare ER Calculation__
|FICA Taxable Earnings|61503.31
|FICA Rate|x 0.0145
|__MEDI ER Contribution__|= 891.80
\\
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|YTD PC 7030 Medicare ER|423.35
|PC 7034 RR Tier1 Med ER|+ 385.71
|__MEDI ER YTD So Far__|= 809.06 (MEDI.ytd So Far)
\\
(2) FICA ER – Self Adjust Method
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|MEDI ER Contribution|891.80
|MEDI ER YTD So Far|- 809.06
|__MEDI ER This Pay__|= 82.74 (RPREGC Slight Rounding = 82.75)
\\ \\
----
FIT_Wages.ctd Usage 6051 Pre FWT Earnings = 6676.24
FIT_Wages.ytd Usage 6051 Pre FWT Earnings = 51747.29
FSP_Wages.ctd Usage 6055 Pre-FIT Suppl Earns = 0
FSP_Wages.ytd Usage 6055 Pre-FIT Suppl Earns = 5700
FICA_Wages.ctd Usage 6261 Pre-FICA Employer Earnings = 6596.13
FICA_Wages.ytd Usage 6261 Pre-FICA Employer Earnings = 51057.92
If FICA Earnings (FICA_Wages.ctd) is different than FIT Earnings (FIT_Wages.ctd), then calculate the difference between the Wages for FICA and FIT (i.e. Usage 6261 – Usage 6051), called this Additional FICA Wages
CTD Usage 6261 Pre-FICA Employer Earnings: 6596.13
CTD Usage 6051 Pre FWT Earnings 6676.24
CTD Addn FICA Wages: 6596.13 – 6676.24 = -80.11 (negative means FICA Earn < Pre-FWT Earn)
YTD Usage 6261 Pre-FICA Employer Earnings: 51057.92
YTD Usage 6051 Pre FWT Earnings 51747.29
YTD Addn FICA Wages: 51057.92 – 51747.29 = -689.37 (negative means FICA Earn < Pre-FWT Earn)
Addn FICA_Wages.ctd = -80.11 FICA.ytdEE = 3459.44 (dedn so far) MEDI.ytd = 809.06 (dedn so far)
Addn FICA_Wages.ytd = -689.37 FICA.ytdER = 3459.44 (dedn so far)
YTD 125 Total (from YTD) = 1649.91 (prorate to YTD FIT / FSP Wages, i.e. 51747.29 and 5700)
YTD 401K Total (from YTD) = 2026.80 (prorate to YTD FIT / FSP Wages, i.e. 51747.29 and 5700)
FIT_ben_125.ctd = 200.83 FSP_ben_125.ctd = 0
FIT_ben_125.ytd = 1486.20 FSP_ben_125.ytd = 163.71 (1486.20 + 163.71 = 1649.91)
FIT_ben_401K.ctd = 239.57 FSP_ben_401K.ctd = 0
FIT_ben_401K.ytd = 1825.70 FSP_ben_401K.ytd = 201.1 (1825.70 + 201.1 = 2026.80)
Calculate FICA Wages for the Year:
FIT_Wages.ctd + Addn FICA_Wages.ctd + FIT_Wages.ytd + Addn FICA_Wages.ytd
6676.24 + (-80.11) + 51747.29 + (-689.37) = 57654.05
FSP_Wages.ctd + FSP_Wages.ytd
0 + 5700 = 5700
FICA_Wages_Total = 57654.05 + 5700 = 63354.05
Calculate 125 Exemption for the Year:
FICA_125_Total = FIT_ben_125.ctd + FSP_ben_125.ctd + FIT_ben_125.ytd + FSP_ben_125.ytd
FICA_125_Total = 200.83 + 0 + 1486.20 + 163.71 = 1850.74
FICA ER Calculation:
FICA Taxable Earnings = FICA_Wages_Total – FICA_125_Total
FICA Taxable Earnings = 63354.05 – 1850.74 = 61503.31
FICA ER Contribution = FICA Taxable Earnings x FICA Rate
FICA ER Contribution = 61503.31 x 0.062 = 3813.21
FICA ER YTD so far = YTD PC 7031 FICA ER + PC 7033 RR Tier1 Soc ER
FICA ER YTD so far = 1810.19 + 1649.25 = 3459.44 (FICA.ytdER so far)
FICA ER this pay = FICA ER Contribution – FICA ER YTD so far
FICA ER this pay = 3813.21 – 3459.44 = 353.77 (RPREGC slight rounding 353.80)
Medicare ER Calculation
MEDI ER Contribution =: FICA Taxable Earnings x FICA Rate
MEDI ER Contribution =: 61503.31 x 0.0145 = 891.80
MEDI ER YTD so far = YTD PC 7030 Medicare ER + PC 7034 RR Tier1 Med ER
MEDI ER YTD so far = 423.35 + 385.71 = 809.06 (MEDI.ytd so far)
MEDI ER this pay = MEDI ER Contribution – MEDI ER YTD so far
MEDI ER this pay = 891.80 – 809.06 = 82.74 (RPREGC slight rounding 82.75)
At line 274 removed 6 lines
!Railroad - Tier1 Tax Example
[US Federal Tax Calculation_03.JPG]
\\ \\
|FIT_Wages|Usage 6051 Pre FWT Earnings|6153.82
|RRTA_Wages|Usage 6306 Pre-RR Tier1 SOC ER Earnings|6079.97
\\
At line 281 changed 3 lines
|PC 8005 FIT Earn|= FIT Wages - 125 - 401K|= 6153.82 - 194.22 - 225.31|= 5734.29
|PC 8201 RR Tier1 Soc ER Earn|= RRTA Wages - 125|= 6079.97 - 194.22|= 5885.75
\\
!!!Railroad – Tier1 Tax Example
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__RRTA - No Self Adjust Method__
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|PC 7033 RR Tier1 Soc ER|= RR Tier1 Earn x 0.062|= 5885.75 x 0.062|= 364.92
|PC 7034 RR Tier1 Med ER|= RR Tier1 Earn x 0.0145|= 5885.75x 0.0145|= 85.34
\\ \\
For Railroad Taxation, if an employee has FICA contribution during the year, this means the employee works between the Railroad and Non-Railroad Assignments. In this case, please check if the 'RR Self-Adjust' method should be used for this employee or not.
At line 292 changed one line
The reason is, if 'RR Self-Adjust' method is defined on [IPRLU], this method is applicable for both RR Tier1 and Tier2 calculations. However, since Regular FICA does not have a Tier2 calculation, the 'RR Self-Adjust' method will automatically re-adjust all earnings that include YTD FICA Earnings that are not subject to Tier2 calculation. This would cause the entire YTD Earnings to subject to Tier2 tax.
FIT_Wages Usage 6051 Pre FWT Earnings 6153.82
RRTA_Wages Usage 6306 Pre-RR Tier1 SOC ER Earnings 6079.97
At line 294 removed 12 lines
Since employees should only pay Tier2 tax for the earnings that are earned for Railroad employment, if employee has FICA contribution, it should be verified if this employee should use the 'Self-Adjust' method to re-calculate all Tier2 tax or just use 'RR No Self-Adjust' method.
\\ \\
The next example shows the 'RR Self-Adjust' method and should be used when the employee does not have FICA employment. \\
\\
__RRTA - Self Adjust Method__
|FIT_Wages.ctd|Usage 6051 Pre FWT Earnings|= 6153.82
|FIT_Wages.ytd|Usage 6051 Pre FWT Earnings|= 58423.53
|FSP_Wages.ctd|Usage 6055 Pre-FIT Suppl Earns|= 0
|FSP_Wages.ytd|Usage 6055 Pre-FIT Suppl Earns|= 5700
|RRTA_Wages.ctd|Usage 6306 Pre-Tier1 Soc ER Earn|= 6079.97
|RRTA_Wages.ytd|Usage 6306 Pre-Tier1 Soc ER Earn|= 57654.05
\\
At line 307 changed 5 lines
If RRTA Earnings (RRTA_Wages.ctd) is different than FIT Earnings (FIT_Wages.ctd), then calculate the difference between the wages for RRTA and FIT (such as Usage 6306 - Usage 6051). This is called Additional RRTA Wages.
|CTD Usage 6306 Pre-Tier1 Soc ER Earn| |6079.97
|CTD Usage 6051 Pre FWT Earnings| |6153.82
|CTD Addn FICA Wages|6079.97 - 6153.82|= -73.85 (The negative sign means that RRTA Earn < Pre-FWT Earn)
\\
PC 8005 FIT Earn = FIT Wages – 125 - 401K = 6153.82 –194.22 – 225.31 = 5734.29
PC 8201 RR Tier1 Soc ER Earn = RRTA Wages – 125 = 6079.97 –194.22 = 5885.75
At line 313 changed 4 lines
|YTD Usage 6306 Pre-Tier1 Soc ER Earn| |57654.05
|YTD Usage 6051 Pre FWT Earnings| |58423.53
|YTD Addn FICA Wages|57654.05 - 58423.53|= -769.48 (negative means RRTA Earn < Pre-FWT Earn)
\\
(1) RRTA – No Self Adjust Method
At line 318 changed 3 lines
|Addn RRTA_Wages.ctd|= -73.85 RRTA.ytd_Tier1_ER = 3813.24 (dedn so far)
|Addn RRTA_Wages.ytd|= -769.48
\\
PC 7033 RR Tier1 Soc ER = RR Tier1 Earn x 0.062 = 5885.75 x 0.062 = 364.92
PC 7034 RR Tier1 Med ER = RR Tier1 Earn x 0.0145 = 5885.75x 0.0145 = 85.34
At line 322 removed 3 lines
|YTD 125 Total (from YTD)|= 1850.24 (prorate to YTD FIT / FSP Wages, i.e. 58423.53 and 5700)
|YTD 401K Total (from YTD)|= 2266.37 (prorate to YTD FIT / FSP Wages, i.e. 58423.53 and 5700)
\\
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|FIT_ben_125.ctd|= 194.22|FSP_ben_125.ctd|= 0|
|FIT_ben_125.ytd|= 1685.77|FSP_ben_125.ytd|= 164.47| (1685.77 + 164.47 = 1850.24)
|FIT_ben_401K.ctd|= 225.31|FSP_ben_401K.ctd|= 0|
|FIT_ben_401K.ytd|= 2064.91|FSP_ben_401K.ytd|= 204.46| (2064.91 + 204.46 = 2269.37)
\\ \\
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__Calculate RRTA Wages for the Year:__
|FIT_Wages.ctd|6153.82
|Addn RRTA_Wages.ctd|+ (-73.85)
|FIT_Wages.ytd|+ 58423.53
|Addn RRTA_Wages.ytd|+ (-769.48)
|__Total__|= 63734.02
- For Railroad Taxation, if an employee has FICA contribution during the year, this means the employee works between the Railroad and Non-Railroad Assignments. In this case, please check if the ‘RR Self-Adjust’ Method should be used for this Employee or not.
At line 339 changed 3 lines
|FSP_Wages.ctd|0
|FSP_Wages.ytd|+ 5700
|__Total__|= 5700
- The reason is, if ‘RR Self-Adjust’ method is defined on IPRLU, this method is applicable for both RR Tier1 and Tier2 calculation, but since Regular FICA does not have a Tier2 calculation, the ‘RR Self-Adjust’ method will automatically re-adjust all Earnings that include YTD FICA Earnings that are not subject to Tier2 calculation, this would cause the entire YTD Earnings to subject to Tier2 tax
At line 343 changed 2 lines
|RRTA_Wages_Total =|63734.02 + 5700|= 69434.02
\\ \\
- since employee should only pay Tier2 tax for the Earnings that are earned for Railroad employment, if employee has FICA contribution, the user should verify if this employee should use the ‘Self-Adjust’ method to re-calculate all Tier2 tax or just to use ‘RR No Self-Adjust’ method.
At line 346 changed 7 lines
__Calculate 125 Exemption for the Year__
|FIT_ben_125.ctd|194.22
|FSP_ben_125.ctd|+ 0
|FIT_ben_125.ytd|+ 1685.77
|FSP_ben_125.ytd|+ 164.47
|__RRTA_125_Total__|= 2044.46
\\ \\
- Next page example shows the ‘RR Self-Adjust method’ and should be used when Employee does not have FICA employment
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__RRTA Tier1 ER Calculation:__
|RRTA_Wages_Total|69434.02
|RRTA_125_Total|- 2044.46
|__RRTA Taxable Earnings__|=67389.56
\\
At line 360 changed 4 lines
|RRTA Taxable Earnings|67389.56
|RRTA Tier1 ER Rate|x 0.062
|__RRTA Tier1 ER Contribution__|=4178.15
\\
(2) RRTA – Self Adjust Method
At line 365 changed 4 lines
|YTD PC 7031 FICA ER|2163.99
|PC 7033 RR Tier1 Soc ER|+ 1649.25
|__RRTA ER YTD so far__|= 3813.24 (RRTA.ytdER so far)
\\
FIT_Wages.ctd Usage 6051 Pre FWT Earnings = 6153.82
FIT_Wages.ytd Usage 6051 Pre FWT Earnings = 58423.53
FSP_Wages.ctd Usage 6055 Pre-FIT Suppl Earns = 0
FSP_Wages.ytd Usage 6055 Pre-FIT Suppl Earns = 5700
RRTA_Wages.ctd Usage 6306 Pre-Tier1 Soc ER Earn = 6079.97
RRTA_Wages.ytd Usage 6306 Pre-Tier1 Soc ER Earn = 57654.05
At line 370 changed 3 lines
|RRTA ER Contribution|4178.15
|RRTA ER YTD so far|- 3813.24
|__RRTA Tier1 ER this pay__|= 364.81
If RRTA Earnings (RRTA_Wages.ctd) is different than FIT Earnings (FIT_Wages.ctd), then calculate the difference between the Wages for RRTA and FIT (i.e. Usage 6306 – Usage 6051), called this Additional RRTA Wages
CTD Usage 6306 Pre-Tier1 Soc ER Earn : 6079.97
CTD Usage 6051 Pre FWT Earnings 6153.82
CTD Addn FICA Wages: 6079.97 – 6153.82 = -73.85 (negative means RRTA Earn < Pre-FWT Earn)
YTD Usage 6306 Pre-Tier1 Soc ER Earn : 57654.05
YTD Usage 6051 Pre FWT Earnings 58423.53
YTD Addn FICA Wages: 57654.05 – 58423.53 = -769.48 (negative means RRTA Earn < Pre-FWT Earn)
Addn RRTA_Wages.ctd = -73.85 RRTA.ytd_Tier1_ER = 3813.24 (dedn so far)
Addn RRTA_Wages.ytd = -769.48
YTD 125 Total (from YTD) = 1850.24 (prorate to YTD FIT / FSP Wages, i.e. 58423.53 and 5700)
YTD 401K Total (from YTD) = 2266.37 (prorate to YTD FIT / FSP Wages, i.e. 58423.53 and 5700)
FIT_ben_125.ctd = 194.22 FSP_ben_125.ctd = 0
FIT_ben_125.ytd = 1685.77 FSP_ben_125.ytd = 164.47 (1685.77 + 164.47 = 1850.24)
FIT_ben_401K.ctd = 225.31 FSP_ben_401K.ctd = 0
FIT_ben_401K.ytd = 2064.91 FSP_ben_401K.ytd = 204.46 (2064.91 + 204.46 = 2269.37)
Calculate RRTA Wages for the Year:
FIT_Wages.ctd + Addn RRTA_Wages.ctd + FIT_Wages.ytd + Addn RRTA_Wages.ytd
6153.82 + (-73.85) + 58423.53 + (-769.48) = 63734.02
FSP_Wages.ctd + FSP_Wages.ytd
0 + 5700 = 5700
RRTA_Wages_Total = 63734.02 + 5700 = 69434.02
Calculate 125 Exemption for the Year:
RRTA_125_Total = FIT_ben_125.ctd + FSP_ben_125.ctd + FIT_ben_125.ytd + FSP_ben_125.ytd
RRTA_125_Total = 194.22 + 0 + 1685.77 + 164.47 = 2044.46
RRTA Tier1 ER Calculation:
RRTA Taxable Earnings = RRTA_Wages_Total – RRTA_125_Total
RRTA Taxable Earnings = 69434.02 – 2044.46 = 67389.56
RRTA Tier1 ER Contribution =: RRTA Taxable Earnings x RRTA Tier1 ER Rate
RRTA Tier1 ER Contribution =: 67389.56 x 0.062 = 4178.15
RRTA ER YTD so far = YTD PC 7031 FICA ER + PC 7033 RR Tier1 Soc ER
RRTA ER YTD so far = 2163.99 + 1649.25 = 3813.24 (RRTA.ytdER so far)
RRTA Tier1 ER this pay = RRTA ER Contribution – RRTA ER YTD so far
RRTA Tier1 ER this pay = 4178.15 – 3813.24 = 364.81
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![Notes|Edit:Internal.PR_US_Federal_Tax_Calc.doc]
[{InsertPage page='Internal.PR_US_Federal_Tax_Calc.doc' default='Click to create a new notes page'}]
![Notes|Edit:Internal.US Federal Tax Calculation]
[{InsertPage page='Internal.US Federal Tax Calculation' default='Click to create a new notes page'}]
This page (revision-42) was last changed on 26-Nov-2021 10:22 by mmcfarlandTop