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Colorado MISC2 (FAMLI) Tax Processing On Employees Where the Work State Is Not in the State of Colorado (Doc ID 2926601.1)

Last updated on FEBRUARY 08, 2023

Applies to:

Oracle HRMS (US) - Version 12.2.5 and later
Information in this document applies to any platform.

Symptoms

On : 12.2.5 version, US Payroll - Colorado Paid Family Leave Colorado MISC2 (FAMLI)

ACTUAL BEHAVIOR
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Colorado MISC2 (FAMLI) Tax Processing on Employees where Work State is not in the State of Colorado.

EXPECTED BEHAVIOR
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The new Colorado MISC2 (FAMLI) tax is processing on employees who do not work in Colorado. The Work State under Federal Tax Rules shows a different state. These are instances where the SUI State is Colorado or the State Tax Rules have a Colorado record, but we do not think they should be subject to FAMLI.


STEPS
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The issue can be reproduced at will with the following steps:
1. Employee lives and works in a State outside of Colorado.
2. The employee's State Unemployment Insurance (SUI) is in the State of Colorado.
3. Observe the Colorado Paid Family Leave tax is deducted.

Changes

Effective January 1, 2023, employers in the state of Colorado will be required to participate in Family and Medical Leave Insurance (FAMLI) Program. This FAMLI program will be funded by a premium of 0.90% of wages, the payment for which will be split between the employee (via a payroll deduction) and the employer beginning January 1, 2023. According to the Colorado FAMLI Employer FAQ: this rate is set through 2025 by Proposition 118, voted in by 57% of Coloradans as the authorizing vote of the people to create the FAMLI enterprise fund. Employees may begin to file claims with the program to receive their FAMLI benefits starting on January 1, 2024 and later.

The employee deduction and employer contribution will each be 0.45% of subject wages up to the social security wage limit which will be $160,200.00 in 2023. Employees who work in Colorado are subject to the FAMLI deduction.

Cause

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In this Document
Symptoms
Changes
Cause
Solution
References


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