Table of Contents
- US BENEFIT TYPES
- Symmetry Supported Benefit Types
- Pre-defined Benefit Types
- Federal Benefit Pay Component Usages
- State Benefit Pay Component Usages
- Custom Benefit Types
- Custom Benefit Types
- Custom Benefit Type Pay Component Usages
- Benefit PC Usages - Legacy User Set Up
- Benefit PC Usages - Symmetry User Set Up
- Federal Level - Nine Pre-defined Benefits
- State Level - Nine Pre-defined Benefits
- Pre-Defined Benefit Type Pay Component and Element Set Up
- Custom Benefit Type PC & Element Set Up - For All States
- Custom Benefit Types - IPPC Pretax Criteria Override
- Custom Benefit Type Element - Varies by States
- Custom Benefit Type Element – Amounts Vary by States
- Notes
US BENEFIT TYPES#
Symmetry Supported Benefit Types#
Pre-defined Benefit Types#
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.
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.
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.
The Symmetry Tax Engine (STE) supports nine pre-defined benefit types and ten custom benefit types which may affect taxable earnings.
The STE will determine the pretax 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.
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.
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 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.
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).
Custom benefit types may be:
- Pension
- PERS
- Dependent Care
- Group Term Life (GTL)
The IPPC element that made up the Benefit Pretax Amounts can be varied by state and will be described further on.
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, 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 |
| 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 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 |
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.
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.
Benefit PC Usages - Symmetry User Set Up#
Federal Level - Nine Pre-defined Benefits#
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.
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 - Nine Pre-defined Benefits#
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.
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.
Pre-Defined Benefit Type Pay Component and Element Set Up#
IPCU PC Usages are supplied to users with the taxation software release.
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.
The SymmetryTaxEngine will determine which of the nine pre-defined benefit types are taxable for each level of taxation.
e.g.
PC Usage 7902 Pre-FWT 401K Exemption, IPPC Element Name: ‘FWT 401K EXEMPT’
Custom Benefit Type PC & Element Set Up - For All States#
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.
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.
e.g.
PC Usage 7801 Pre-Reg Custom Benefit 01, IPPC Element Name: ‘PFRS PERS EX’
IPPE element ‘PFRS PERS EX’ includes all of the benefit deduction pay components which could affect an employee’s taxable wages
Custom Benefit Types - IPPC Pretax Criteria Override#
IPCU PC Usages are supplied to users with UPCALC software release.
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.
If you wish to specify or override the Pretax criteria for this Benefit Type Pay Component, click the 'Show User Fields' icon.
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
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.
For the ten Custom Benefit types, these Pretax criteria must be set up.
On the IPCU screen Pay Component block, you can click the 'Show User Fields' icon to edit the same Pretax criteria setup.
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.
