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US BENEFIT TYPES#

Overview#

This section 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.

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.

The nine 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 state level taxation.

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

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

Custom Benefit Types #

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.

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).

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.

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

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 two options to set up Benefit PC Usages.

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.

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.

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.

If the Benefit Type is made up by an element, then specify the Element name. (e.g. 125 Regular - proration logic here.)

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.

Benefit PC Usages – Symmetry User Set Up#

Federal Level – Nine 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

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

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.

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

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.

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.

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Notes #

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