Federal Income Tax Is Wrong For Retired Person After Applying Patch 21911111

(Doc ID 2081216.1)

Last updated on MARCH 08, 2017

Applies to:

Oracle HRMS (Canada) - Version 12.1.3 and later
Information in this document applies to any platform.

Symptoms

On :  12.0 HRMS RUP8 version, Canadian Payroll Tax Issues

ACTUAL BEHAVIOR  
---------------
Taxable Benefit with Year End Form T4A/RL2 is set up as taxable for Provincial tax but should be not taxable for Federal Tax.  This taxable benefit is taxable for both federal and provincial after the RUP 8 patch is applied

EXPECTED BEHAVIOR
-----------------------
The taxable benefit to only be taxable for the Province.  This is working differently between the retiree and the regular employee even though the Tax Withholding Rules are set up the same

STEPS
-----------------------
The issue can be reproduced at will with the following steps:
1) Create a payroll list with a period type « Semi-Month

2) Create a pension earning which will be processed on T4A/RL2 > processing Supplemental Earnings> Tax Category - Pension
Calculation Rule - Flat Amount
Year End Form T4A/RL2

3) Create a taxable benefit which will be process on T4A/RL2, not taxable at the federal government
 
This taxable benefit is associated to the category Private Health Services Plan.
This category is taxable only to the provincial government. It is not taxable at the federal government.

Earnings Classification - Taxable Benefits
Category - Private Health Services
Recurring
Calculation Rule - Flat Amount
Tax Processing Type - Regular
Year End Form   T4A/RL2

Tax Withholding Rules
Provincial - Quebec
Private Health Services
     Checked Prov, QPP, PMED, and CSST

Federal
Private Health Services
     All the boxes are blank

Create a retired person and assignment associated with
the Semi-Month payroll list and with the  two entries elements: pension earning and
taxable benefit

Pay 1000.00 earnings
40.00 in taxable benefit


5) Quick pay executed before applying <>:R12.PAY.B (Year end 2015 Phase 1)
 The federal income tax is correct. It is been calculated to the earning amount of 1,000
Federal Tax   66.14
Quebec Tax   75.36

Quick pay executed after applying <>:R12.PAY.B (Year end 2015 Phase 1)
 
The federal income is incorrect. It is been calculated to the amount of 1,000 plus the
taxable benefit of 40 


The federal income tax should still be 66.14
Federal Tax is now 71.15
Quebec Tax stayed the same at 75.36


Cause

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