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Newark, New Jersey Taxable Wages Incorrect Because of Section 125 and HSA Pretax (Doc ID 2369983.1)

Last updated on FEBRUARY 22, 2019

Applies to:

Oracle HRMS (US) - Version 12.2.4 and later
Information in this document applies to any platform.

Symptoms

On : 12.2.4 version, US Payroll Tax Issues

ACTUAL BEHAVIOR
---------------
Have employees with incorrect taxable wages for Newark New Jersey. Newark taxable wages follow federal not state.  Find this issue when employee's have HSA deductions that are exempt for Federal and taxable for the State. The employees taxable wages are off by the amount of the HSA deduction.

EXPECTED BEHAVIOR
-----------------------
Newark taxable wages to be reduced by the amount of the HSA deductions

STEPS
-----------------------
The issue can be reproduced at will with the following steps:
1. Have an employee in Newark, New Jersey that has a HSA deduction
2. There is a supported Employer tax for Newark, New Jersey
3. HSA deductions are pretax for Federal but not for State - New Jersey
4. HSA should also be PreTax for Newark, New Jersey employer local tax
5. The Other Health Care 125 is set as PreTax for Newark under the Taxability Rules
6. See the HSA Deduction is not PreTax for Newark as it is following the Taxability Rules for state New Jersey
7. This local tax should be following Federal Tax Rules


Changes

 

Cause

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In this Document
Symptoms
Changes
Cause
Solution
References


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