US Default Jurisdiction

Table of Contents

Default Jurisdiction#

Why use a default Jurisdiction?#

Background#

For US Taxation some States do not require to calculate State taxes, i.e. Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. Some States calculate State taxes but do not require to calculate Local taxes, e.g. California and so on.

For States with simple taxation, clients may prefer to set up the GNIS Jurisdiction code at the State level that is in the format of XX-000-0000 where XX is the State Numeric code. This simplifies the set up for every employee to eliminate the set up of a full GNIS code with the format of State-County-City (XX-111-2222222).

For States with local taxation such as County Tax, City Tax, School Tax, Head Tax etc, the full GNIS code must be defined at the employees’ work location and home address (IEAS & IEPI) in order to calculate these taxes correctly with the County-City portion of the GNIS code.

The STE (Symmetry Tax Engine) reserves the GNIS code ‘-000-0000’ County-City portion for Federal tax calculations using the Federal GNIS Code 00-000-000. Therefore if the State GNIS code is XX-000-0000, this may cause the STE to incorrectly combine Federal and State wages during its tax calculations. With this configuration, there is a known issue with the STE incorrectly applying the 401K / 457 maximum earnings limit for high earners. This has also been an issue with the calculation of Oregon Transit Tax. To resolve this issue, Symmetry requires UPCALC to pass a fully specified GNIS code for State tax calculation.

To assist clients with this issue,UPCALC has been enhanced with the ability to pass the STE a ‘default’ tax jurisdiction. The default jurisdiction must be a fully specified GNIS code defined in IDGV per State Registration. It is suggested the default jurisdiction be the head office location or a location where the majority of employees work. This allows clients to continue using the base state GNIS code of XX-000-0000 in the IEAS, IEPI and IPPH records and requires less set up changes.

Alternatively, clients may prefer to specify the full GNIS code format of State-County-City (XX-111-2222222) on all IEPI / IEAS / IPPH screens. With this set up there is no need to set up the default IDGV entry with the full GNIS code for each State. This method would require either SQL scripts or manual intervention by the client to update each employee’s record with the GNIS Tax Jurisdiction. Changing the tax jurisdiction on employee records mid year would cause a new year to date record to be created for the employees.

Set Up#

IMLN – X_GOVT_REGIST_TYPE#

The following X_GOVT_REGIST_TYPE values are supplied by the system and are used for the default Jurisdiction set up on IDGV screen for each State.

IDGV – Government Registration Set Up#

For each State the employees are to be paid by the employer, the user should set up an IDGV default Jurisdiction entry for that State. The Registration Type selected for the default jurisdiction entry depends on the following scenarios:

1. One government registration number defined per state – select Reg Type of ‘US State All Reg Type Juris’.

2. Multiple government registration numbers defined per state and all registration numbers will use the same default tax jurisdiction – select Reg Type of ‘US State All Reg Type Juris’.

3. Multiple government registration numbers defined per state and each will use a different default tax jurisdiction – select Reg Type of ‘US State Reg% Jurisdiction’ where the number in the registration type matches the number in the Reg Type ‘US State Regist %’ entry of the state. E,g US State Regist 1 match up with US State Reg1 Jurisdiction.

Example 1:

A company is paying employees in California, and the company has registered one State Registration number with the California government.

IDGV set up:

For the State Registration, there will be 2 entries (the first entry below should already be defined):


Example 2:

A company is paying employees in California, and the company has registered two State Registration numbers with the State. The company would prefer that both registrations use the same default tax jurisdiction.

IDGV set up:

For the State, there will be 3 entries (the first two entries below should already be defined):


Example 3:

A company is paying employees in California, and the company has registered two State Registration numbers with the California government. The company would prefer that each registration number for California use a different default tax jurisdiction.

IDGV set up:

For the State, there will be 4 entries

For the 1st State Registration Number, there will be 2 entries (the first entry below should already be defined):

For the 2nd State Registration Number, there will be 2 entries (the first entry below should already be defined):


Example 4:

The employer is paying employees in many States and has registered two State Registration numbers for each State. The company would prefer that each registration number per state use a different default tax jurisdiction

IDGV set up:

For each State there will be 4 entries

For each Registration Number there will be 2 entries (the first entry below should already be defined):
Alabama:


Arizona

If one State is to be paid under one default jurisdiction code for all IDGR State Regist Type entries within that State, the user can set up one generic entry for that State (US State All Reg Type Juris)

e.g. Arizona has 5 State Regist Numbers and are all paid under 04-013-11029, Scottsdale, then one IDGV generic entry (US State All Reg Type Juris) can be set up instead of 5 IDGV entries with 0301 to 0305

UPCALC Processing#

Pay Header – Work / Home Jurisdiction Processing#

In UPCALC or Trial Calc, if the Pay Header’s Work Jurisdiction or Home Jurisdiction GNIS code contains the City portion of ‘-0000’, this triggers the logic to retrieve the default full GNIS Jurisdiction for Symmetry Taxation.

To retrieve the default Home Jurisdiction of a pay, the Pay Header Home State is used.
To retrieve the default Work Jurisdiction of a pay, the Pay Header Work State is used.

The Pay Header’s Group code is used to retrieve the IDGR entry. On IDGR screen REGISTRATION tab, the ‘State Regist Set’ and ‘State Regist Type’ are used to retrieve the IDGV entry.

The last digit of IDGR ‘State Regist Type’ is used to match the last digit of X_GOVT_REGIST_TYPE values of 0301 to 0309 to locate the IDGV entry in order to retrieve the default Jurisdiction along with the Pay Header’s Home State and Work State.

IPPH – Derive default Work / Home Jurisdiction from IDGV#

In the above IPPH example, retrieve Work Jurisdiction as follows:

IPPH Work State = ‘CA’, IDGR State Regist Type = ‘0241’, on IDGV Reg Type = ‘0301’ entry is found for State of California with Jurisdiction 06-075-277593, San Francisco, therefore this is the default Work Jurisdiction

Retrieve Home Jurisdiction as follows:

IPPH Home State = ‘NV’, IDGR State Regist Type = ‘0241’, on IDGV Reg Type = ‘0301’ entry is NOT found for State of Nevada. Then IDGV Reg Type = ‘0300’ entry is found for Nevada with Jurisdiction 32-003-847388, Las Vegas, therefore this is the default Home Jurisdiction.

If IDGV has not been set up for 0300 or 0301, then the original Pay Header’s Work Jurisdiction 06-000-0000 or Home Jurisdiction 32-000-0000 will be used to pass to Symmetry. Tax results are mostly correct except there is a slight possibility of incorrect benefit maximums are being applied when employees are reaching 401K maximums or other thresholds.

IPPH – Pay Jurisdiction Tab#

After Symmetry tax calculation, the IPPH PAY JURISDICTION Tab Work Jurisdiction and Home Jurisdiction still show the original Pay Header’s Work / Home Jurisdiction of 06-000-0000, 32-000-0000.

The middle block with Jurisdiction information is shown with the full GNIS code where the State Taxes are being calculated with the full GNIS code, e.g. 06-075-277593, San Francisco

Tax Identifiers are returned by Symmetry for each Tax Type that is calculated with the full GNIS code. e.g. 06-000-0000-ER_SUTA-000-N/A-N/A 06-000-0000-ER_SUTA_SC-004-N/A-N/A 06-000-0000-SDI-000-NonRes-Reg 06-000-0000-SDI-000-NonRes-Sup

IPPH Pay Amounts are stored according to IPPH Home or Work Jurisdictions, i.e. XX-000-0000.

As this default Jurisdiction feature of passing a full GNIS code to Symmetry is only used for simple States tax calculation, these simple States do not calculate local taxes such as County Tax, City Tax, therefore storing the Pay Amounts by IPPH Home or Work Jurisdictions of XX-000-0000 will record the State taxes properly, there is no need to store by the full GNIS code of XX-111-2222222 with the County-City portion.

Using default Jurisdiction for States with Local Tax – PA, OH#

Some States have Local taxes or School District taxes that require a full GNIS code, e.g. PA, OH.

However some companies may not withhold Local taxes or School District taxes on behalf of the employees. Employees will pay these local taxes themselves when they file their income tax returns.

When company does not withhold Local taxes or School District taxes, the company can use this default Jurisdiction set up for all employees and set up the full GNIS code on IDGV. e.g. for Pennsylvania,

On IDGV, user may pop into the ‘Tax Jurisdiction Editor Utility’ to enter the full GNIS code

For Pennsylvania and Ohio, if IPPH Home or Work Jurisdiction does not contain a Municipality or School District Code, the School District tax will not be calculated, therefore UPCALC will issue a warning message for PA or OH and request the user to fill in the Municipality and School code

However if IPPH Home or Work Jurisdiction is using 42-000-0000 or 39-000-0000 code and IDGV PA or OH Jurisdiction does not specify the Municipality or School code, UPCALC will not issue the warning message because the company may not want to calculate the school tax

After UPCALC, note that the Work and Home Jurisdictions are: 42-000-0000.

City Tax and School Tax are calculated according to IDGV Jurisdiction: 42-001-1214752. If local taxes are calculated, these are for information only.

After UPCLOZ, IPPH Work and Home Jurisdictions 42-000-0000 are updated into the YTD. Since 42-000-0000 does not contain the County or City portion, RPYEU will not be reporting the local or school district tax.

If the company is required to report the Local or School District Taxes, the full GNIS code must be used on IEPI, IEAS and IPPH for PA and OH.

Reporting Jurisdiction#

UPCLOZ – Work / Home Jurisdiction#

After UPCLOZ, IPVT is updated with the IPPH Pay Header Home or Work Jurisdictions, i.e. XX-000-0000.

RPYEU – Work / Home Jurisdiction#

RPYEU will report according to IPVT Home or Work Jurisdictions. Since this default Jurisdiction feature is for simple States tax calculation only, the reporting with XX-000-0000 will report the State taxes properly.

Screen captures are meant to be indicative of the concept being presented and may not reflect the current screen design.
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