Wiki: US BENEFIT TYPES

Table of Contents

1 OVERVIEW 4 2 SYMMETRY SUPPORTED BENEFIT TYPES 5 2.1 Pre-defined Benefit Types 5 2.2 Federal Benefit Pay Component Usages 6 2.3 State Benefit Pay Component Usages 7 3 CUSTOM BENEFIT TYPES 8 3.1 Custom Benefit Types 8 3.2 Custom Benefit Type Pay Component Usages 9 4 BENEFIT PC USAGES – LEGACY USER SET UP 10 5 BENEFIT PC USAGES – SYMMETRY USER SET UP 11 5.1 Federal Level – 9 Pre-defined Benefits 11 5.2 State Level – 9 Pre-defined Benefits 11 5.3 Benefit PC Usages – IPPC Pre-Tax Criteria Override 12 5.4 Benefit Element – for All States 13 5.5 Benefit Element - Varies by States 14 5.6 Benefit Element – IPPE Pre-Tax Criteria Override 15

1 Overview Intent

This document describes the benefit types supported by the Symmetry Tax Engine (STE) Software which may impact employee taxable wages.

Audience

All users who are responsible to do the Payroll Tax Calculation in the Pay cycle process.

Prerequisites

All users must have a thorough understanding of the Payroll Pay Cycle UPCALC process.

2 Symmetry Supported Benefit Types

2.1 Pre-defined Benefit Types

The Symmetry Tax Engine supports 9 pre-defined benefit types and 10 custom benefit types which may affect taxable earnings. The SymmetryTaxEngine will determine the Pre-Tax status of the 9 predefined benefit types for each of the taxes calculated. The 9 supported predefined benefit types are:  125  401K  403b  457  Roth401K  Roth403b  FSA  HSA  Simple IRA

These benefit types each have their own PC Usage as described below for Federal and for State level taxation.

2.2 Federal Benefit Pay Component Usages

PC Usage Tax Level Suggested Element Usage Description Released in Version 7901 Fed UFWT125 125 plan contributions exempt from Federal Regular Withholding Tax. - Mandatory if 125 is applicable - Pay Component must be set up - IPPC Store Results - optional 4.10 7902 Fed UFWT401K 401K plan contributions exempt from Federal Withholding Tax. 4.10 7903 Fed UFWT403B 403B plan contributions exempt from Federal Regular Withholding Tax. 4.10 7904 Fed UFWT457 457 plan contributions exempt from Federal Regular Withholding Tax. 4.10 7905 Fed UFWTROTH401 Roth 401K plan contributions exempt from Federal Regular Withholding Tax. 4.10 7906 Fed UFWTROTH403 Roth 403B plan contributions exempt from Federal Regular Withholding Tax. 4.10 7907 Fed UFWTFSA FSA plan contributions exempt from Federal Regular Withholding Tax. 4.10 7908 Fed UFWTHSA HSA plan contributions exempt from Federal Regular Withholding Tax. 4.10 7909 Fed UFWTIRA Simple IRA plan contributions exempt from Federal Regular Withholding Tax. 4.10 7921 Fed UFSP125 125 plan contributions exempt from Federal Supplemental Tax. - Mandatory if 125 is applicable - Pay Component must be set up - IPPC Store Results - optional 4.10 7922 Fed UFSP401K 401K plan contributions exempt from Federal Supplemental Tax. 4.10 7923 Fed UFSP403B 403B plan contributions exempt from Federal Supplemental Tax. 4.10 7924 Fed UFSP457 457 plan contributions exempt from Federal Supplemental Tax. 4.10 7925 Fed UFSPROTH401 Roth 401K plan contributions exempt from Federal Supplemental Tax. 4.10 7926 Fed UFSPROTH403 Roth 403B plan contributions exempt from Federal Supplemental Tax. 4.10 7927 Fed UFSPFSA FSA plan contributions exempt from Federal Supplemental Tax. 4.10 7928 Fed UFSPHSA HSA plan contributions exempt from Federal Supplemental Tax. 4.10 7929 Fed UFSPIRA Simple IRA plan contributions exempt from Federal Supplemental Tax. 4.10

2.3 State Benefit Pay Component Usages

PC Usage Tax Level Suggested Element Usage Description Released in Version 7951 State USTT125 125 plan contributions exempt from State Regular Withholding Tax. - Mandatory if 125 is applicable - Pay Component must be set up - IPPC Store Results - optional 4.10 7952 State USTT401K 401K plan contributions exempt from State Regular Withholding Tax. 4.10 7953 State USTT403B 403B plan contributions exempt from State Regular Withholding Tax. 4.10 7954 State USTT457 457 plan contributions exempt from State Regular Withholding Tax. 4.10 7955 State USTTROTH401 Roth 401K plan contributions exempt from State Regular Withholding Tax. 4.10 7956 State USTTROTH403 Roth 403B plan contributions exempt from State Regular Withholding Tax. 4.10 7957 State USTTFSA FSA plan contributions exempt from State Regular Withholding Tax. 4.10 7958 State USTTHSA HSA plan contributions exempt from State Regular Withholding Tax. 4.10 7959 State USTTIRA Simple IRA plan contributions exempt from State Regular Withholding Tax. 4.10 7971 State USTS125 125 plan contributions exempt from State Supplemental Tax. - Mandatory if 125 is applicable - Pay Component must be set up - IPPC Store Results - optional 4.10 7972 State USTS401K 401K plan contributions exempt from State Supplemental Tax. 4.10 7973 State USTS403B 403B plan contributions exempt from State Supplemental Tax. 4.10 7974 State USTS457 457 plan contributions exempt from State Supplemental Tax. 4.10 7975 State USTSROTH401 Roth 401K plan contributions exempt from State Supplemental Tax. 4.10 7976 State USTSROTH403 Roth 403B plan contributions exempt from State Supplemental Tax. 4.10 7977 State USTSFSA FSA plan contributions exempt from State Supplemental Tax. 4.10 7978 State USTSHSA HSA plan contributions exempt from State Supplemental Tax. 4.10 7979 State USTSIRA Simple IRA plan contributions exempt from State Supplemental Tax. 4.10

3 Custom Benefit Types

3.1 Custom Benefit Types

If a client has benefit plans other than the 9 pre-defined benefit types listed in the previous chapter whose deductions affect employee taxable wages, the custom benefit types may be set up. Users can define up to 10 different custom benefit types. The user must configure the Pre-Tax criteria for Federal, State, Local level taxation on IPPC Pay Component screen (this is also enterable on IPCU screen by PC Usage with the same Pre-Tax criteria of the defined pay component). Custom benefit types may be:  Pension  PERS  Group Term Life (GTL)

The IPPC Element that made up the Benefit Pre-Tax Amounts can be varied by State. These will be described in the next chapter.

3.2 Custom Benefit Type Pay Component Usages

PC Usage Tax Level Suggested Element Usage Description Released in Version 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 7802 TX-BEN-02 - same as Usage 7801 4.10 7803 TX-BEN-03 - same as Usage 7801 4.10 7804 TX-BEN-04 - same as Usage 7801 4.10 7805 TX-BEN-05 - same as Usage 7801 4.10 7806 TX-BEN-06 - same as Usage 7801 4.10 7807 TX-BEN-07 - same as Usage 7801 4.10 7808 TX-BEN-08 - same as Usage 7801 4.10 7809 TX-BEN-09 - same as Usage 7801 4.10 7810 TX-BEN-10 - same as Usage 7801 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 7822 TX-BENSUP-02 - same as Usage 7821 4.10 7823 TX-BENSUP-03 - same as Usage 7821 4.10 7824 TX-BENSUP-04 - same as Usage 7821 4.10 7825 TX-BENSUP-05 - same as Usage 7821 4.10 7826 TX-BENSUP-06 - same as Usage 7821 4.10 7827 TX-BENSUP-07 - same as Usage 7821 4.10 7828 TX-BENSUP-08 - same as Usage 7821 4.10 7829 TX-BENSUP-09 - same as Usage 7821 4.10 7830 TX-BENSUP-10 - same as Usage 7821 4.10

4 Benefit PC Usages – Legacy User Set Up

For Vertex L Series users, the following PC usages are used:

PC Usage Tax Level Suggested Element Usage Description Released in Version Used by Symmetry 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

For Vertex users who are converting to Symmetry, there are 2 options to set up Benefit PC Usages.

(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

(2) - set up Benefit PC Usages 7901 to 7979 for 125, 401K, 403B, 457 etc

- 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

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.

For Symmetry users or converted users, if a particular Benefit Type is to be used, user should set up a Pay Component on IPPC with the PC Usage as defined above.

On IPPC, user can optionally turn ON the ‘Store Results’ toggle to store the amounts on ‘Pay Amounts’ Tab. The Pay Component amount will always be stored on IPPH ‘Pay Jurisdiction’ Tab regardless of the ‘Store Results’ toggle. 5 Benefit PC Usages – Symmetry User Set Up

5.1 Federal Level – 9 Pre-defined Benefits

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

5.2 State Level – 9 Pre-defined Benefits

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

If State Usage 7951 to 7959 are not set up, then Federal Usage 7901 to 7909 will be used

If State Supplemental Usage 7971 to 7979 are not set up, then Federal Supplemental Usage 7921 to 7929 will be used

Same benefit proration logic applies to the State level benefit usage set up

5.3 Benefit PC Usages – IPPC Pre-Tax Criteria Override

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

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.

5.4 Benefit Element – for All States

On IPPC screen for the Pay Component of each Benefit PC Usage, user must specify an Element that made up the Benefit Amount.

e.g. 401K Usage 7902 IPPC Element Name: ‘TX-401K’, Custom Benefit Usage 7801 IPPC Element Name: ‘TX-BEN-01’

These Element names are used for all employees by UPCALC for all States

5.5 Benefit Element - Varies 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 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’

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.

5.6 Benefit Element – IPPE Pre-Tax Criteria Override

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’

On IPPE screen, 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.