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SmartFusion Modules > Payroll > Parameters > Deduction

Recent Changes: 
6.180 
- Added 'Illinois plan code' combo box which will allow the user to select the appropriate plan code for Illinois retirement. This will only be visible for Illinois clients and if the deduction is type 'P'/'R'.
- Changed the name of the 'Regular Pension' checkbox to 'Illinois pension'

6.169 
- Added 'Regular Pension' checkbox which is visible only for Illinois clients and only if the Deduction type is 'P'/'R'. 

6.96 
- Added the ability to select a vendor to create AP Vouchers for employer cost.

6.89 
- added the "Include in percent of net computation" option. If this option is selected the the deduction amount would be deducted from the "percent of net" garnishments calculation along with FICA, Medicare, and Taxes. 

6.24 
- Added "Percent of Net" to the available Computation Methods  
- This is intended to be used for garnishments and is a non-taxable normal deduction with no employer cost

Introduction

In addition to normal deduction information, the deduction file is used to store information about the employer cost share of deductions. For example, in the case of retirement, both the employee deduction amounts and the employer share of retirement cost are recorded in the same parameter record. In other cases, such as life insurance and long-term disability, where the total cost may be funded by the employer, only the employer cost information is reflected in the deduction record.

Explanation

Deduction Code
Description
Abbreviation - printed on check stub where there is not room for a full description
Print/Display Order - choose order that deduction is printed on checks and reports
Account - fund ledger liability account that is credited for deduction amounts withheld from employee's check
Active - checked by default; uncheck only if deduction is no longer used by organization
Priority - used when an employee's wages are insufficient to cover all deductions
Deduction Schedule - identifies the frequency in which deduction should be withheld by pay period
Deduction Type

Code Description Comments

4 401K Availability is dependent on state

Relates to 401K wages

E Employer Cost Only Must be selected for employer cost only deductions (e.g. insurances)

N Normal Deduction Normal employee deduction

P IL Pension

R Retirement Deduction Relates to retirement wages

S Savings Bond Deduction

T Term Life Employer Cost

W Worker's Comp Employer Cost Relates to wages that are subject to worker's compensation http://rand-wiki.harriscomputer.com/Page/5436

Code	Description	Comments
4	401K	Availability is dependent on state
		Relates to 401K wages
E	Employer Cost Only	Must be selected for employer cost only deductions (e.g. insurances)
N	Normal Deduction	Normal employee deduction
P	IL Pension
R	Retirement Deduction	Relates to retirement wages
S	Savings Bond Deduction
T	Term Life Employer Cost
W	Worker's Comp Employer Cost	Relates to wages that are subject to worker's compensation	http://rand-wiki.harriscomputer.com/Page/5436

Default Amount/Percent - used to assist in Employee Master Setup
Deduction Tax Status

Code Description Comments

A Annuity Subject to FICA & Medicare tax but not Federal

Withheld after FICA tax is computed

Withheld before Federal & State taxes are computed

L State and Local Only

N Non-Taxable Not subject to any tax

S Annuity Plus State and Local

T Taxable Should be assigned to all other deductions that receive no favored tax treatment

Withheld after FICA, Federal & State taxes are computed

Code	Description	Comments
A	Annuity	Subject to FICA & Medicare tax but not Federal
		Withheld after FICA tax is computed
		Withheld before Federal & State taxes are computed
L	State and Local Only
N	Non-Taxable	Not subject to any tax
S	Annuity Plus State and Local
T	Taxable	Should be assigned to all other deductions that receive no favored tax treatment
		Withheld after FICA, Federal & State taxes are computed

Retirement Type

Code Description

1 State Retirement

3 Police Retirement Class 1

4 Police Retirement Class 1

E GA ERS - New

O Other Retirement

P GA PSERS

S GA ERS - old

T GA TRS

X GA PXRS

Code	Description
1	State Retirement
3	Police Retirement Class 1
4	Police Retirement Class 1
E	GA ERS - New
O	Other Retirement
P	GA PSERS
S	GA ERS - old
T	GA TRS
X	GA PXRS

Organization Id Code - used when reporting electronically to various agencies; if the ID is being entered for the Federal Reserve for Savings Bonds, enter the 6-digit code company ID number followed by the 3-digit FRB District Designator

Computation Method

Code Description Comments

P Percent of Gross

V Variable Amount will be specified in Employee Master

N Percent of Net Used for garnishments

Gross - FICA - Medicare - Taxes - any other deductions with the "Include in percent of net computation" option selected

Normal deduction; Non-Taxable; No employer cost

Code	Description	Comments
P	Percent of Gross
V	Variable	Amount will be specified in Employee Master
N	Percent of Net	Used for garnishments
		Gross - FICA - Medicare - Taxes - any other deductions with the "Include in percent of net computation" option selected
		Normal deduction; Non-Taxable; No employer cost

Fringe Type - related to Employer Costs

Code Description

D Dental

H Health

O Other

2 Other2

3 Other3

4 Other4

5 Other5

Code	Description
D	Dental
H	Health
O	Other
2	Other2
3	Other3
4	Other4
5	Other5

RSD Plan Code
Include in percent of net computation - check if you wish to have the deduction included in the calculations for deductions with a computation method of "percent of net"
Illinois pension - Visible only for IL clients and only if the Deduction type is 'P'/'R'
Illinois plan code - Visible only for IL clients and only if the Deduction type is 'P'/'R', available vales are 'REG' - Regular Pension, 'SLEP' - Sheriff's Law Enforcement Plan, and 'ECO' - Elected County Officers
W2 Code

Code Description Comments

14 Box 14 Amount

AA Section 401(k) Roth

BB Section 403(b) Roth

C Dependent Care (Sec 125) Contributions to a dependent care flexible spending account that is part of a section 125 plan

Deduction amounts are reported in box 10 on the W-2

Deduction amounts <= $5,000 are exempt from income tax as well as FICA and Medicare

Deduction amounts > $5,000 are taxable and must be included in taxable wages, FICA wages and Medicare wages

D Section 401(k) Deduction amounts are subject to FICA and Medicare tax

Deduction amounts are reported in box 12 on the W-2

Deduction amounts are not subject to income tax

DD Cost of Employer Sponsored Health Coverage

E Section 403(b) Deduction amounts are subject to FICA and Medicare tax

Deduction amounts are reported in box 12 on the W-2

Deduction amounts are not subject to income tax

EE Section 457 Roth

G Section 457 Deduction amounts are subject to FICA and Medicare tax

Deduction amounts are reported in box 12 on the W-2

Deduction amounts are not subject to income tax

H 501(c) Defer Comp Contributions are added to taxable wages

S Simple IRA Deduction amounts are subject to FICA and Medicare tax

Deduction amounts are reported in box 12 on the W-2

Deduction amounts are not subject to income tax

W HSA

X Group Term Life > 50000

Code	Description	Comments
14	Box 14 Amount
AA	Section 401(k) Roth
BB	Section 403(b) Roth
C	Dependent Care (Sec 125)	Contributions to a dependent care flexible spending account that is part of a section 125 plan
		Deduction amounts are reported in box 10 on the W-2
		Deduction amounts <= $5,000 are exempt from income tax as well as FICA and Medicare
		Deduction amounts > $5,000 are taxable and must be included in taxable wages, FICA wages and Medicare wages
D	Section 401(k)	Deduction amounts are subject to FICA and Medicare tax
		Deduction amounts are reported in box 12 on the W-2
		Deduction amounts are not subject to income tax
DD	Cost of Employer Sponsored Health Coverage
E	Section 403(b)	Deduction amounts are subject to FICA and Medicare tax
		Deduction amounts are reported in box 12 on the W-2
		Deduction amounts are not subject to income tax
EE	Section 457 Roth
G	Section 457	Deduction amounts are subject to FICA and Medicare tax
		Deduction amounts are reported in box 12 on the W-2
		Deduction amounts are not subject to income tax
H	501(c) Defer Comp	Contributions are added to taxable wages
S	Simple IRA	Deduction amounts are subject to FICA and Medicare tax
		Deduction amounts are reported in box 12 on the W-2
		Deduction amounts are not subject to income tax
W	HSA
X	Group Term Life > 50000

W2 Note
Provider Code - identify the deduction to plan administrators
Report On Check Stub
Allow a Deduction Ceiling - select to allow a ceiling on the amount of the deduction (used for garnishments, levies, charitable contributions, etc.)
Employee Type
Employer Type
IRS Code

Associate an Employer Cost - The following settings relate to employer cost:

Default Amount/Percent - used to assist in Employee Master Setup
Employer Cost is a Percent - select if the amount is a percent and not a flat amount
Frequency
Accrual Account - the account that will be credited for the employer’s liability
Object - the Object Code segment of the expenditure accounts where the cost will be charged
Expense Account
Employer Cost is Subject to Fica and Medicare
Term Life Wage Limit - related to the Term Life Employer Cost deduction type; maximum withholding amount
Employer Cost Should Not Exceed Employee Amount
Maximum Employer Cost
Vendor to create ap vouchers for employer cost

Print Deduction Report with Payroll Register
Vendor Number to be used in Create AP Vouchers from Payroll Option
Filename
Furlough Deduction
401k Category for Creating 401k Report/File

Troubleshooting

Reference

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Introduction

Explanation

Troubleshooting

Reference