When a supplemental pay is paid with a regular pay, the taxable benefit deductions can be prorated between both Federal and Supplemental wages. This is controlled by the set up of elements attached to specific pay components, as indicated below.
Prorating the taxable benefit deductions will cause a slight difference in the tax calculated. Organizations will need to consider their business processes to determine if they would prefer the taxable benefits to be prorated or not. Some organizations may want to prorate Section 125 deductions and not 401k deductions.
UPCALC reviews the set up of the following Federal PC Usages to determine if it should prorate the taxable benefit deductions:
7901 | Pre-FWT 125 Exemption - Reg Tax (PPE) |
7902 | Pre-FWT 401K Exemption - Reg Tax (PPE) |
7903 | Pre-FWT 403B Exemption - Reg Tax (PPE) |
7904 | Pre-FWT 457 Exemption - Reg Tax (PPE) |
7905 | Pre-FWT Roth 401K Exemption - Reg Tax (PPE) |
7906 | Pre-FWT Roth 403B Exemption - Reg Tax (PPE) |
7907 | Pre-FWT FSA Exemption - Reg Tax (PPE) |
7908 | Pre-FWT HSA Exemption - Reg Tax (PPE) |
7909 | Pre-FWT Simple IRA Exemption - Reg Tax (PPE) |
7921 | Pre-FWT 125 Exemption - Suppl Tax (PPE) |
7922 | Pre-FWT 401K Exemption - Suppl Tax (PPE) |
7923 | Pre-FWT 403B Exemption - Suppl Tax (PPE) |
7924 | Pre-FWT 457 Exemption - Suppl Tax (PPE) |
7925 | Pre-FWT Roth 401K Exemption - Suppl Tax (PPE) |
7926 | Pre-FWT Roth 403B Exemption - Suppl Tax (PPE) |
7927 | Pre-FWT FSA Exemption - Suppl Tax (PPE) |
7928 | Pre-FWT HSA Exemption -Suppl Tax (PPE) |
7929 | Pre-FWT Simple IRA Exemption - Suppl Tax (PPE) |
The proration logic will occur when:
The proration logic will NOT occur when:
Set Up Options to Prorate Section 125 Taxable Benefits between Federal and Supplemental:
Set Up Options to Prorate 401k Taxable Benefits between Federal and Supplemental:
After UPCALC or Trial Calc, go to the Pay Jurisdiction tab on IPPH, click on the Jurisdiction '00-000-0000 Federal' entry and scroll down the 'Tax Identifier' list. The prorated 125 and 401K amounts are stored for these Benefit usages with the description 'Pre-FWT 125 Exemption - Supplemental Tax (PPE)' etc.
The following is an example of proration:
PC 1010 Regular Earnings | 2307.6900 |
PC 2002 Bonus $ | 1000.0000 |
PC 4020 Medical EE (sect125) | 50.0000 |
PC 4041 401K Dedn | 33.0800 |
PC 6000 Fed Tax | 393.2000 |
PC 6003 Fed Supp Tax | 243.7200 |
PC 8000 Fed Tax Earnings | 2249.7300 |
PC 8010 Fed Sup Earnings | 974.8800 |
PC 6055 Res SIT Tax | 138.0000 |
PC 6057 Res Supp Tax | 61.0000 |
PC 8055 Res SIT Earnings | 2249.7300 |
PC 8058 Res Supp Earnings | 974.8800 |
PC 8400 Pre-Fed Earnings | 2307.6900 |
PC 8403 Pre-Fed Sup Earnings | 1000.0000 |
PC 8153 Pre Fed 125 Earnings | 34.8800 |
PC 8154 Pre Fed 401 Earnings | 23.0800 |
PC 8156 Pre Fed Sup 125 | 15.1200 |
PC 8167 Pre FSP 401 Earnings | 10.0000 |
PC 8551 Pre-SIT Earnings | 2307.6900 |
PC 8453 Pre-SIT Suppl Earnings | 1000.0000 |
PC 8353 Pre-SIT 125 | 34.8800 |
PC 8354 Pre-SIT 401/403/457 | 23.0800 |
PC 8356 Pre-SIT Supp 125 | 15.1200 |
PC 8357 Pre-SIT Supp 401K | 10.0000 |
PC 4020 Medical EE (Section 125) $50.0000
PC 8153 Pre Fed 125 Earnings | 34.8800 prorated amount on regular wages |
PC 8156 Pre Fed Sup 125 | + 15.1200 prorated amount on suppemental wages |
50.00 |
PC 4041 401K Dedn $33.0800
PC 8154 Pre Fed 401 Earnings | 23.0800 prorated amount on regular wages |
PC 8167 Pre FSP 401 Earnings | + 10.0000 prorated amount on suppemental wages |
33.08 |
The Pre-Fed Earnings are reduced accordingly:
Pre-Fed Earnings | 2307.6900 |
Pre Fed 125 Earnings | -34.8800 |
Pre Fed 401 Earnings | -23.0800 |
Fed Tax Earnings | 2249.7300 |
The Pre-Fed Supp Earnings are reduced accordingly:
Pre-Fed Sup Earnings | 1000.0000 |
Pre Fed Sup 125 | - 15.1200 |
Pre FSP 401 Earnings | - 10.0000 |
Fed Sup Earnings | 974.8800 |
PC 1010 Regular Earnings | 2307.6900 |
PC 2002 Bonus $ | 1000.0000 |
PC 4020 Medical EE (Section 125) | 50.0000 |
PC 4041 401K Dedn | 33.0800 |
PC 6000 Fed Tax | 386.9200 |
PC 6003 Fed Supp Tax | 250.0000 |
PC 6055 Res SIT Tax | 136.0000 |
PC 6057 Res Supp Tax | 63.0000 |
PC 8000 Fed Tax Earnings | 2224.6100 |
PC 8010 Fed Sup Earnings | 1000.0000 |
PC 8055 Res SIT Earnings | 2224.6100 |
PC 8058 Res Supp Earnings | 1000.0000 |
PC 8400 Pre-Fed Earnings | 2307.6900 |
PC 8403 Pre-Fed Sup Earnings | 1000.0000 |
PC 8153 Pre Fed 125 Earnings | 50.0000 |
PC 8154 Pre Fed 401 Earnings | 33.0800 |
PC 8551 Pre-SIT Earnings | 2307.6900 |
PC 8453 Pre-SIT Suppl Earnings | 1000.0000 |
PC 8353 Pre-SIT 125 | 50.0000 |
PC 8354 Pre-SIT 401/403/457 | 33.0800 |
UPCALC did not prorate the Section 125 or 401k deductions against regular and supplemental wages.
The Pre-Fed Earnings are reduced accordingly:
Pre-Fed Earnings | 2307.6900 |
Pre Fed 125 Earnings | -50.0000 |
Pre Fed 401 Earnings | -33.0800 |
Fed Tax Earnings | 2224.6100 |
The Pre-Fed Supplemental Earnings are not reduced since the Section 125 and 401k taxable benefits were not prorated.
Pre-Fed Sup Earnings 1000.0000
The FIT Tax is based on $2224.6100
The FSP Tax is based on $1000.0000
The following table lists the States that are with and without the Supplemental Tax Percent, as of July 2017.
State | Percent | State | Percent | |
---|---|---|---|---|
Alabama | 5.0 | Montana | 6.0 | |
Alaska | Nebraska | 5.0 | ||
American Samoa | 25.0 | Nevada | ||
Arizona | New Hamshire | |||
Arkansas | 6.9 | New Jersey | (3) | |
California | 6.6 10.23 | New Mexico | 4.9 | |
Colorado | 4.63 | New York | 9.62(4) | |
Connecticut | North Carolina | 5.599 | ||
Delware | North Dakota | 1.84 | ||
Florida | Ohio | 3.5 | ||
Georgia | (1) | Oklamhoma | 5.0 | |
Guam | 25.0 | Oregon | 9.0 | |
Hawaii | Pennsylvania | 3.07 | ||
Idaho | 7.4 | Puerto Rico | ||
Illinois | 4.95 | Rhode Island | 5.99 | |
Indiana | 3.23 | South Carolina | 7.0 | |
Iowa | 6.0 | South Dakota | ||
Kansas | 5.0 | Tennessee | ||
Kentucky | Texas | |||
Louisiana | Utah | |||
Maine | 5.0 | Vermont | (5) | |
Mariana Islands | 25.0 | Virgin Islands | 25.00 | |
Maryland | (2) | Virginia | 5.75 | |
Massachusetts | 5.1 | Washington | ||
Michigan | 4.25 | West Virginia | (6) | |
Minnesota | 6.25 | Wisconsin | (7) | |
Mississippi | Wyoming | |||
Missouri | 6.0 |
(1) Georgia rates vary from 2% to 6% based upon the year-to-date gross pay.
(2) Maryland varies based upon the County. The base percentage is 5.75% and the County percentage is added to the base.
(3) New Jersey has no provision, but for pay over $500,000, withhold at 9.9%
(4) New York City residents have an additional supplemental of 4%. Yonkers City residents have an additional supplemental of 1.103%. Non-resident Yonkers additional supplemental is 0.5%.
(5) Vermont rate is 24% of Federal Tax
(6) West Virginia rates vary from 3% to 6.5% based upon the year-to-date gross pay.
(7) Wisconsin rate vary from 4.0% to 7.65% based upon the year-to-date gross pay.
Maryland GEO: 24-001-1713506 Allegany | |
Paid with Regular Wages | Paid at Different Time than Regular Wages |
Add to regular wages and withhold on total | Withhold at 5.75% plus applicable county of residence rate, Or add to regular wages, compute tax on total, and subtract the tax withheld on regular wages |
The Local Level Supplemental Tax method uses the same State Level Supplemental Tax method
For Example: State of Maryland:
In conclusion for Maryland:
If there is no override by an employee, there is no need to set up these Misc Tax Parm.
For the IPRLU Federal and State Tab Suppl Tax Method explanation, please refer to the PR_US_IPRLU_methods_v1.0.doc or later.
When an employee is paid with Supplemental wages, the IPRLU Federal and State Tab Suppl Tax Method determines if the Supplemental Wages are to be taxed or not, and which Suppl Tax Method is to be used.
When the State Supplemental tax is to be calculated by Symmetry, the IPUTP State specific tax method from SUP_PAID_WITH_REG or SUP_PAID_WITHOUT_REG will be passed to Symmetry for calculation, depending on if the Supplemental wages are paid with or without Regular wages (either FLAT or CURRAGG is used).
Like with the Federal Supplemental Pay, taxable benefits can be prorated between regular state wages and supplemental wages when both are paid together. This is controlled by the set up of the elements attached to specific pay components, as indicated below.
Prorating the taxable benefit deductions will cause a slight difference in the tax calculated. Organizations need to consider their business processes to determine if they would prefer the taxable benefits to be prorated or not. Some organizations may want to prorate Section 125 deductions and not 401k deductions.
UPCALC reviews the set up of the following State PC Usages to determine if it should prorate the taxable benefit deductions.
NOTE: If the State Level Benefit PC Usages are not set up on IPPC, then the Federal Level Benefit PC Usages that are described in the Federal section will be used.
7951 | Pre-State 125 Exemption - Reg Tax (PPE) |
7952 | Pre-State 401K Exemption - Reg Tax (PPE) |
7953 | Pre-State 403B Exemption - Reg Tax (PPE) |
7954 | Pre-State 457 Exemption - Reg Tax (PPE) |
7955 | Pre-State Roth 401K Exemption - Reg Tax (PPE) |
7956 | Pre-State Roth 403B Exemption - Reg Tax (PPE) |
7957 | Pre-State FSA Exemption - Reg Tax (PPE) |
7958 | Pre-State HSA Exemption - Reg Tax (PPE) |
7959 | Pre-State Simple IRA Exemption - Reg Tax (PPE) |
7971 | Pre-State 125 Exemption - Suppl Tax (PPE) |
7972 | Pre-State 401K Exemption - Suppl Tax (PPE) |
7973 | Pre-State 403B Exemption - Suppl Tax (PPE) |
7974 | Pre-State 457 Exemption - Suppl Tax (PPE) |
7975 | Pre-State Roth 401K Exemption - Suppl Tax (PPE) |
7976 | Pre-State Roth 403B Exemption - Suppl Tax (PPE) |
7977 | Pre-State FSA Exemption - Suppl Tax (PPE) |
7978 | Pre-State HSA Exemption -Suppl Tax (PPE) |
7979 | Pre-State Simple IRA Exemption - Suppl Tax (PPE) |
The proration logic will occur when:
The proration logic will NOT occur when:
Set Up Options to Prorate Section 125 Taxable Benefits between State Regular Wages and Supplemental:
Set up Options to Prorate 401k Taxable Benefits between Federal and Supplemental:
After UPCALC or Trial Calc, on IPPH, 'Pay Jurisdiction' tab, click the Jurisdiction entry for the appropriate Jurisdiction name and scroll down the 'Tax Identifier' list. The prorated Section 125 and 401K/457 amounts are stored for these Benefit usages with the description of 'Pre-State 125 Exemption - Reg Tax (PPE)', etc.
The following is an example of proration:
PC 1010 Regular Earnings | 2307.6900 |
PC 2002 Bonus $ | 1000.0000 |
PC 4020 Medical EE (Section 125) | 50.0000 |
PC 4041 401K Dedn | 33.0800 |
PC 6000 Fed Tax | 393.2000 |
PC 6003 Fed Supp Tax | 243.7200 |
PC 8000 Fed Tax Earnings | 2249.7300 |
PC 8010 Fed Sup Earnings | 974.8800 |
PC 6055 Res SIT Tax | 138.0000 |
PC 6057 Res Supp Tax | 61.0000 |
PC 8055 Res SIT Earnings | 2249.7300 |
PC 8058 Res Supp Earnings | 974.8800 |
PC 8400 Pre-Fed Earnings | 2307.6900 |
PC 8403 Pre-Fed Sup Earnings | 1000.0000 |
PC 8153 Pre Fed 125 Earnings | 34.8800 |
PC 8154 Pre Fed 401 Earnings | 23.0800 |
PC 8156 Pre Fed Sup 125 | 15.1200 |
PC 8167 Pre FSP 401 Earnings | 10.0000 |
PC 8551 Pre-SIT Earnings | 2307.6900 |
PC 8453 Pre-SIT Suppl Earnings | 1000.0000 |
PC 8353 Pre-SIT 125 | 34.8800 |
PC 8354 Pre-SIT 401/403/457 | 23.0800 |
PC 8356 Pre-SIT Supp 125 | 15.1200 |
PC 8357 Pre-SIT Supp 401K | 10.0000 |
UPCALC prorated both the Section 125 and 401k taxable benefits against regular and supplemental wages for both Federal and State.
PC 4020 Medical EE (Section 125) $50.0000 | |
---|---|
PC 8353 Pre-SIT 125 | 34.8800 prorated amount on reg wages |
PC 8356 Pre-SIT Supp 125 | + 15.1200 prorated amount on supp wages |
50.00 |
PC 4041 401K Dedn $33.0800 | |
---|---|
PC 8354 Pre-SIT 401/403/457 | 23.0800 prorated amount on reg wages |
PC 8357 Pre-SIT Supp 401K | + 10.0000 prorated amount on supp wages |
33.08 |
The Pre-State Earnings are reduced accordingly:
Pre-SIT Earnings | 2307.6900 |
Pre-SIT 125 | - 34.8800 |
Pre-SIT 401/403/457 | - 23.0800 |
RES SIT Earnings | 2249.7300 |
The Pre-Fed Supp Earnings are reduced accordingly:
Pre-SIT Suppl Earnings | 1000.0000 |
Pre-SIT Supp 125 | - 15.1200 |
Pre-SIT Supp 401K | - 10.0000 |
Fed Sup Earnings | 974.8800 |
The SIT Tax is based on $2249.73
The SSP Tax is based on $974.88
The following is an example of the same pay, without proration:
PC 1010 Regular Earnings | 2307.6900 |
PC 2002 Bonus $ | 1000.0000 |
PC 4020 Medical EE (Section 125) | 50.0000 |
PC 4041 401K Dedn | 33.0800 |
PC 6000 Fed Tax | 386.9200 |
PC 6003 Fed Supp Tax | 250.0000 |
PC 6055 Res SIT Tax | 136.0000 |
PC 6057 Res Supp Tax | 63.0000 |
PC 8000 Fed Tax Earnings | 2224.6100 |
PC 8010 Fed Sup Earnings | 1000.0000 |
PC 8055 Res SIT Earnings | 2224.6100 |
PC 8058 Res Supp Earnings | 1000.0000 |
PC 8400 Pre-Fed Earnings | 2307.6900 |
PC 8403 Pre-Fed Sup Earnings | 1000.0000 |
PC 8153 Pre Fed 125 Earnings | 50.0000 |
PC 8154 Pre Fed 401 Earnings | 33.0800 |
PC 8551 Pre-SIT Earnings | 2307.6900 |
PC 8453 Pre-SIT Suppl Earnings | 1000.0000 |
PC 8353 Pre-SIT 125 | 50.0000 |
PC 8354 Pre-SIT 401/403/457 | 33.0800 |
UPCALC did not prorate the Section 125 or 401k deductions against regular and supplemental wages.
The Pre-State Earnings are reduced accordingly:
Pre-SIT Earnings | 2307.6900 |
Pre-SIT 125 | - 50.0000 |
Pre-SIT 401/403/457 | - 33.0800 |
RES SIT Earnings | 2224.6100 |
The Pre-SIT Supplemental Earnings are not reduced since the Section 125 and 401k taxable benefits were not prorated.
Pre-SIT Suppl Earnings $1000.0000
The SIT Tax is based on $2224.6100
The SSP Tax is based on $1000.0000
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