E1: 07: Puerto Rico Youth Exempt Wage Amount Incorrect for Tax Type F in F07353 (Doc ID 2865092.1)

Last updated on JUNE 05, 2023

Applies to:

Symptoms

Puerto Rico resident has filed FORM 499 R-4.1 stating a $40K tax-exempt wage election because they are under age 26.  
Vertex is calculating the taxes correctly, but Oracle is sending the incorrect amount of exempt wages.  Vertex before/after report shows PR_YOUTH _WAGE_EXEMPT_YTD amount as $23,665 but those wages were taxed and were NOT in the excludable bucket in the F06136 file.

Act 135-2014, known as the "Act for Incentives and Financing for Young Entrepreneurs" amended section 1031-02 of the Puerto Rico Internal Revenue Code, as amended, to establish an income tax exemption for young residents of Puerto Rico between the ages of 16 and 26. Said exemption applies to the first $40,000 of gross income earned from wages, services rendered, or self employment.

STEPS TO REPRODUCE
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1. Set up an employee in Employee Entry, P0801 for Puerto Rico (tax area 72) with a birth date (DOB) of less than 26 years old.
2. Run Payroll, P07210 through Final Update, R07250 to generate history records for this employee.
3. In Additional Tax Overrides, P0701732, set up the employee as a Youth.
4. Process an Interim Check for the employee in P07210I.
5. Review the interim check and note tax type F wage amount is incorrect in F07353

Changes

Cause

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