Overview This document describes the US Federal Tax Calculation using the Symmetry Tax Engine (STE) Software.
IRS_MAX_EXEMPTIONS
401K_CATCHUP (Obsolete, removed from IPUTP)
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 either the Miscellaneous tab or the State tab with the Misc. Identifier IRS_MAX_EXEMPTIONS.
On IPPC, set up pay components for these PC Usages for federal tax calculation
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) |
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) |
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 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) |
There are two ways of providing the FUTA tax rate:
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.
IPRLU Federal Filing Status | = Single |
Regular Earnings: | = 1923.08 |
Supplemental Earnings: | = 100.00 |
125 Plan | 145.89 |
401K Plan | + 112.54 |
403B Plan | + 20.84 |
457 Plan | + 16.18 |
Simple IRA Plan | + 14.97 |
= 310.42 |
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 |
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 |
FIT_Wages | Usage 6051 Pre FWT Earnings | 6676.24 |
FICA_Wages | Usage 6261 Pre-FICA Employer Earnings | 6596.13 |
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 |
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'.
FICA ER - 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 (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 â 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 â FICA_125_Total FICA Taxable Earnings = 63354.05 â 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 â FICA ER YTD so far FICA ER this pay = 3813.21 â 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 â MEDI ER YTD so far MEDI ER this pay = 891.80 â 809.06 = 82.74 (RPREGC slight rounding 82.75)
FIT_Wages Usage 6051 Pre FWT Earnings 6153.82 RRTA_Wages Usage 6306 Pre-RR Tier1 SOC ER Earnings 6079.97
PC 8005 FIT Earn = FIT Wages â 125 - 401K = 6153.82 â194.22 â 225.31 = 5734.29 PC 8201 RR Tier1 Soc ER Earn = RRTA Wages â 125 = 6079.97 â194.22 = 5885.75
(1) RRTA â No Self Adjust Method
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 âRR Self-Adjustâ Method should be used for this Employee or not.
- The reason is, if âRR Self-Adjustâ 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 âRR Self-Adjustâ 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
- 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 âSelf-Adjustâ method to re-calculate all Tier2 tax or just to use âRR No Self-Adjustâ method.
- Next page example shows the âRR Self-Adjust methodâ and should be used when Employee does not have FICA employment
(2) RRTA â 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
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 â 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 â 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 â 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 â RRTA_125_Total RRTA Taxable Earnings = 69434.02 â 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 â RRTA ER YTD so far RRTA Tier1 ER this pay = 4178.15 â 3813.24 = 364.81
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