U.S Tax Reporter Year End 2023

[graziela]

Another Year with our U.S. Tax Reporter Year End blog. If you have questions about 2023 Year-End reporting, you can post it here. This blog will be updated with tips, best practices and, SAP Notes related to this subject.

Legal Changes for US

To review the planned Legal changes for US, start the Announcement of Legal Change application. You can find detailed information about the Announcement of legal changes on this blog.

ASUG Webcast

ASUG Webcast: HCM U.S. Payroll and Tax Reporting 2023 Year End Update 

ASUG Webcast for SAP HCM U.S. Payroll and Tax Reporting 2023 Year End Update was conducted on October 5, 2023.

Recording and slide deck for the ASUG webcast can be found at the event page on ASUG website. Slide deck is also attached to SAP Note 3357714.

Notes to be implemented after the Year End Support Package

3415649 - REC: RPCPRRU0 report incorrectly considering the amount of wage types as negative
3411592 - Reconciliation report scheduler: replacing background options values with default values
3397030 - REC: Payroll Reconciliation Report incorrectly considering wage types as tax type
3386241 - REC: RPCPRSU0 report background jobs getting cancelled when no ALV Variant is provided
3383757 - REC: Wage type side effect correction for Payroll Reconciliation Report
3379534 - REC: RPCPRSU0 report spool request not generated when Background Processing option is selected
3407068 - TAX: PPE parameter incorrectly sent in payment types other than regular
3381685 - TR: Form W-2 not being generated for employees that have only manual entries for a Tax Company
3402664 - TR: Medicare wages in W-2C reported even with no changes to Social Security wages

Year End Notes

3357714 - U.S. Tax Reporter Year End 2023 Announcement
3358191 - Year End 2023 Phase I for U.S. Tax Reporter
3377633 - TR: Year End 2023 Phase II for U.S. Tax Reporter
3412754 - TR: Year End 2023 Phase III for U.S. Tax Reporter
3419714 - TR: Year End 2023 changes to the electronic file formats W-2 and W-2C for Puerto Rico)
3357769 - W-2 / 1099-R Forms, Envelopes and PR Approval letter for year 2023

User Guides and Resources

3368649 - SAP HCM U.S. Tax Reporter Solution Document

2464078 – TR: 1099-R User Guides for HCM US Tax Reporter configuration

2464161 – TR: W-2 User Guides for HCM US Tax Reporter configuration

2463999 – TR: Tax Reporter User Guides for HCM US Tax Reporter configuration
1406971 – FAQ: Troubleshooting PDF Forms in US Tax Reporter
544849 – FAQ: Tax Reporter Note

 In addition, detailed Tax Reporter documentation for EHP8 is available on SAP Help Portal. To get Tax Reporter documentation of an older release click in the portal on SAP ERP HCM, then change the version on the upper right corner, and search for “Tax Reporter (PY-US-TR)”.

KBAs (Knowledge Base Articles)

3081097 – KBAs (Knowledge Base Articles) for Payroll USA
2918093 – After upgrade issue with the position of text and alignment

 

Annual Limits

3398804 - BEN: Annual limits year 2024
3349693 - BEN: Limits for HSA in tax year 2024
3417661 - GARN: IRS Publication 1494 for tax year 2024

 

Educational Videos

2480185 – TR: Tax Reporter – Online W-2 Enhancements videos

Kind regards,
Graziela

[Matt_Fraser]

Miguel,

Unfortunately, "SAP For Me" doesn't have anything for FI legal changes, in terms of "Legal Change Announcements," in quite the manner they do for HR/PY legal changes. When there are new Notes that come out, you may have to just search for them to find out, though usually there would also be a blog or at least an answer to a question in the SAP Community in the Finance area about it.

That said, it is my understanding that there are no changes to 1099-INT/NEC/MISC forms for 2023. The 2022 forms remain the most current.

As this is not related to income tax withholding or reporting, or HR or Payroll, it won't be covered in this blog or community area. You have to check in the FI area for it.

Cheers,
Matt

[Matt_Fraser]

There is an ongoing discussion about this at https://answers.sap.com/questions/13992296/form-changes-for-1099-misc-and-1099-nec-for-the-ye.html, and also https://me.sap.com/notes/3395671/E states there are no changes for 2023.

[Pavankanike]

Hi Mae,

It did work for me. When testing consider only 2024 payroll periods.

 

Thanks,

Pavan

[maebrown]

Thank you! That was our issue - we tested a 2023 pay period. Retest in 2024 worked as expected.

[juli_thompson]

Hi Graziela,

When we tried to apply the Phase II note we received the message the note ‘Cannot be implemented’.  The only prerequisite was the Phase I note which was applied along with Support Packs earlier this month and was successful.

Has anyone else applied the Phase II note 3377633 and were you successful?

Any suggestions?

Juli

[graziela]

Hello Juli,

Which is the Support package level that your system has?

Thank you,
Graziela

[juli_thompson]

Hi Graziela,

 

We are sitting at SP level 0195 and support pack SAPKE604J5.

 

thank you,

Juli

[graziela]

Hi Juli,

This note requires J6. Or J1 and CLC for US, which is the CLC for J6.
Which is the Support Package for Phase I.


Kind regards,
Graziela

[juli_thompson]

Hi Graziela,

 

Thank you for the clarification and I'll discuss with our BASIS team.

 

Juli

[KumarG]

Hello Mae,

We have tested retro scenarios including cross year retro, works as expected. Out initial issue was with the BSI executables.

Thanks

Kumar

[hemnth_kumar]

Hi Chandra,

Did ypu implement Alabama overtime calculation with custom rule from SAP which calculate the overtime amount in /PP wage type and upgrading BSI to Cyclic K.

 

is it working or you team is having any issues with it... Please confirm????

 

[hemnth_kumar]

Hi Pavan,

 

In order for the Alabama overtime to work first we need to write a rule which cumulate all the overtime amount into /PPE wage type.

Then we need to update BSI to Cyclic K.

Now SAP sends taxable gross(/701) - /PPE to BSI and the resultant amount will be taxed by BSI? correct? can you please confirm as this will be helpful when we implement this.

 

[Euna]

Hi Pavan & Mae,

 

I need some insight from you. I've created PCR ZCRL and updated schema. We're on cyclic K.

I see /PPE is generated, but can't see how /PPE is communicated to BSI. Besides, the different in tax amount between 2023 & 2024 seems so trivial I wonder if I have missed something. Any advice?

 

Thank you,

Euna

[maebrown]

Hi Euna,

 

For our testing, we drill into the log for the payroll run, and check USTAX processing data to see the /PPE amount in the BSI Interface, and the tax result.

 

Thanks,

Mae

[Euna]

HI Mae,

Thank you for the response.

Where in USTAX processing /PPE would be appeared? I assume there should be a BSI code or something to identify it separately from State Withholding, I can't find it.

We're on Cyclic K, but TUB is not up-to-date. Would it be the reason?

(Added) 

From the posting of @rosette.vaughn2 in the TaxFactory 11.0 blog, I think I don't have /PPE amount reduced from /701. Would it /PPE's Pcl setting? 

Thank you,

Euna

[Manikak]

Hi Miguel,

 

I just checked with FI Local Product Manager and here is what he shared -

"We maintain one stop SAP Master Note 3067949 which also includes links to blogs featuring tips and tricks for the implementation of SAP DRC."

Hope this helps!

Best Regards,

Mani Kak
Globalization Product Management (GPM)

Visit SAP Globalization Services for more info.

Visit TR Solution Document for U.S Tax Reporter Solution (PY-US-TR)

 

[Matt_Fraser]

Mani,

With the exception of the reference toward the end to Note 3398443, everything in 3067949 is only applicable for customers on S/4HANA. Is there something equivalent for those of us who remain on ERP 6 at various Enhancement Pack levels? To date, we've not found such a "master" Note to follow, so it's been a hit-or-miss effort each fall to search for new Notes.

Cheers,
Matt

[Manikak]

Hi Matt,

 

Let me check with the PM and get back to you.

 

Best Regards,

Mani

[Manikak]

Hello,

Here is the response i got from the FI US Product Manager -

“The USA FI Product Manager has recommended to raise an incident under the component FI-LOC-FI-US-WHT.

Fiscal year 2023 has not had any changes in forms 1099-MISC or NEC. So, there is no SAP Note related. There is no equivalent SAP note for ERP systems.”

Hope this helps.

Best Regards,

Mani

 

 

[PauloCodello]

Hello Team

 

I am trying to implement the changes for this note, but I don't have experience with the PCR (Rules) that is part of the requirements. Can you please help me with a template for rule?

ZCRL
└───	*
	└─	ZCWT
		└───	ADDWTE/PPE

Thank you.

[Pavankanike]

It will be shown in Payroll log.

 

Payroll log

[Pavankanike]

Contact me in linked in .. i can help you

 

linkedin.com/in/pavan-kanike-531aa333

[Euna]

Applied TUBs up to the latest version, but PPE still not shows up. 😞 

Regards,

Euna

[Euna]

Hey...  my message was sent out before I finish it.  Euna

[joe_jones2]

Hi Graziela,

In this legal announcement months ago at the bottom it says Taxable/Reportable Wage Rule:
Guidance on whether or not the WA Cares Fund Premium deduction will be reported on Form W-2 is pending. However, it will most likely follow the Washington PFML rule.

It's December and I haven't seen anything on the reporting on the W2. Please advise.. Thank you, Joe

Reinstatement of WA CARES Fund deductions effective 01 July 2023

Country/Region:

USA (US)

Component:

PY-US

Planned Delivery Date:

03/24/2023

Note:

3316629;

My Completion Status:

New

Manual Activity:

BASICPREREQUISITE NOTES

Activate item to go to section in page

Introduction

In 2021, (under the provisions of 2019 HB 1087), Washington established a long-term care benefit program for Washington workers called the WA Cares Fund. The program implements a mandatory deduction from employee wages which will be used to fund certain long-term care benefits for eligible Washington residents.

The WA Cares Fund Program was originally scheduled to take effect on January 1, 2023. Implementation was subsequently delayed until July 1, 2023.

Participation in the WA Cares Fund program is mandatory, unless an employee meets the criteria to claim an exemption from WA Cares coverage.

The WA Cares Fund tax is work-based. It applies to both residents and non-residents whose work is localized in Washington. Generally, employers will collect premiums for the same employees who are covered for Washington PFML.

Definitions for who contributes to the WA Cares Fund (Long-Term Services and Supports or LTSS) in RCW 50B.04.010 refer back to the Paid Family and Medical Leave Program (PFML) definitions in RCW 50A.05.010. This includes the definition of “Employment” in (8). If premiums are not assessed for the PFML program, they will not be assessed for the WA Cares Fund.

Details

Taxable Wages:
The WA Cares Fund Tax follows the Washington TT:087 (Employee Family Leave Insurance Tax) definition of taxable wages.
"Wage or wages" means all remuneration paid by an employer to an employee. Remuneration has the meaning provided in RCW 50A.05.010. All wages are subject to a premium assessment and not limited by the commissioner of the employment security department, as provided under RCW 50A.10.030(4).

Tax Rate:
The WA Cares Fund tax rate is .58% of taxable wages. There is no maximum wage limit. The tax applies to both regular wages and supplemental wages. It is applied each time the employee is paid.

Who pays:
The tax is paid by employees only. Employers do not share in the tax. However, employers have the option to pay WA Cares Fund premiums on the employee’s behalf.

Exemption Option:
During the 2022 legislative session, Governor Inslee and the legislature created several exemption pathways for Washington workers who are not likely to use their WA Cares benefits in the future. Details are on the WA Cares Fund Website.

Taxable/Reportable Wage Rule:
Guidance on whether or not the WA Cares Fund Premium deduction will be reported on Form W-2 is pending. However, it will most likely follow the Washington PFML rule.

 

 

[alicia_robinson]

Hi Mitesh -

Have you moved this change to your production system?  If so, are you able to see the new payment ID on all periods of all employees in the workbench?

We moved to production, but the payment ID isn't showing the same for all employees across all years.  For example, some have the most recent payment showing and others just have the * in the field. But then we have others showing the payment ID for many years in the past and only the * for the most recent payment.  I assumed the system may just need time to read the table to build all of these entries, but not sure how much time I should give before I get concerned.

Thanks!

Alicia

 

[miteshjain]

Yes, we implemented the changes in production and I reviewed off-cycle workbench for few employees. I can see payment number for all pay periods - even for employees in the system for many years.

[jwiblepasshe22]

FYI, in case not everyone received, see email below received from BSI regarding the 2024 Federal Tax tables on 12/1/2023:

 

"On November 20, 2023, the IRS released a draft version of 2024 Publication 15-T, which contains the Federal Withholding Tax Calculation changes scheduled to take effect on January 1, 2024.

BSI is currently testing changes from the draft version of the Publication 15-T but cannot deploy the updates until the IRS finalizes their guidelines."

[alicia_robinson]

Hi Mitesh -

Thanks for the reply!  Did you do anything special in order for the workbench to populate for all employees and all years?  We moved this to our production environment 4 days ago and the data still doesn't show for all employees or all years and it's not consistent on what does show.

coosthuysen2023 - do you have this change in your production environment and is the data populated for all employees and all years?

 

thanks!

[alicia_robinson]

I believe we found our answer!

If an employee has multiple bank accounts/deposits within the same payroll then it will show the * on the payment number field on the offcycle workbench.  You can click the information icon and it will then show the date/time stamp of the payment number on that screen.

If an employee only has one bank account/deposit within the same payroll then it will show the date/time stamp information directly on the offcycle workbench in the payment number field.

I'm not sure why an employee with multiple bank accounts/deposits couldn't show directly on the workbench especially if it was processed with the same date/time stamp instead of showing the *.  It's caused a lot of anguish for our payroll folks.

Thanks!

offcycle workbench

[joe_jones2]

We implemented the 2023 Phase I note that has the creation of the Colorado "FAMLI" on it. It is updating all employees with this field with a zero amount even if they are not in Colorado. Was this the intended design? We outsource our W2 printing by taking the TEMSE file and creating an extract file to Equifax. I had the program changed to look for "FAMLI" in the position on the TEMSE and if there, put it on the EE extract file record. Since ALL employees have this "FAMLI" on the TEMSE file, all our employees are getting this printed on their W2's. Found this during testing in our QA system. If this was the intended results, I will have to update our extract program to look for "FAMLI" and AMOUNT > 0. Just wanting to clarify if the intention was for ALL employees to have "FAMLI" on the TEMSE file.?

Example of Washington EE having the FAMLI on the TEMSE file:

610 005 COPL Text 000 FAMLI

615 012 COPL Amount 000 000000000000

 

[otistonka]

Issues with Reconciliation Report Scheduler (RPCPRSU0)

After applying the HRSP's in production we are not getting any spools produced when running the scheduler.

The values in the fields Delay time, waiting time and number of repetitions are not saving and revert back to the default values.  This is causing NO SPOOL FILES to be produced when running the reconciliation scheduler.

We have applied notes:

PY-US-RP	3386241	2	REC: RPCPRSU0 report background jobs getting cancelled when no ALV Variant is provided
PY-US-RP	3379534	3	REC: RPCPRSU0 report spool request not generated when Background Processing option is selected

Scheduler

[graziela]

Hello Steve,

If I´m not wrong, your company already opened a case about this.
Could you confirm? If so, this is already assigned to a colleague, who is analyzing the scenario.

Thank you for the confirmation.

Kind regards,
Graziela

[graziela]

Hello Joe,

I took a look at my internal system and COP1 tax form field is linked to CO authority.
Cold you take a look in your system if the Tax Form field is customized to CO authority?

Kind regards,
Graziela

[joe_jones2]

Hi Graziela, I didn't do any customizing for this change. We have what came in on the note from SAP. I'm just wondering if every employee in the temse file was intended to have FAMLI on them or just Colorado. We have changed our Equifax extract program to only pull off the TEMSE file if the FAMLI amount is > 0.

 

 

[graziela]

Hello Joe,

As the Tax Form field is just for CO.
This should only be considered for CO employees.

Kind regards,
Graziela

[joe_jones2]

Hi Graziela, you may want your developers to run a test on a Non-Colorado employee. After the phase 1 note was implemented with the Colorado changes, all the EE's on the 3rd Party Temse file have "FAMLI" on them whether they are Colorado or not.

 

Thank you,

Joe

[graziela]

Hello Joe,

The position will always be generated, as this is fixed.
But the amount for non CO employees will be 0.

Kind regards,
Graziela

[joe_jones2]

Thank you Graziela for the clarification, that was answer I needed. On our TEMSE file the non-Colorado employee do have zero in the amount and the Colorado have an amount. We have updated our extract program to handle this.

 

Thank you,

Joe

[otistonka]

Yes, that is correct. Thank you.

[ConeC]

Steve,

 

Did you get this issue resolved?  I am encountering the same issue and wanted to know if you had a quick resolution.

 

Thanks

[ConeC]

Carlos,

I am also having issues with the Oregon family leave reporting on the W2.  I am pulling the requirement for the employee taxable amounts from the following:

Requirement

https://bullardlaw.com/news/alert/paid-leave-oregon-%E2%80%93-volume-iii--tax-status-of-contribution....

Also included, updated memo from the state of Oregon. Please note the third bullet under Contributions.

Oregon Memo

[ChandraV]

Question on limits update in T511P; I see that there are no updates provided by SAP for the last few years for FEIEL (Foreign Earned Income Exclusion Limit). No updates since 2019. However, per IRS, this is an inflation adjusted limit, updated every year. Is there a reason SAP stopped providing updates for this? Its not relevant for us but curious to know.

Thanks

Chandra

[graziela]

Hello Chandra,

I just found one note that  FEIEL was updated. I didn´t see this a regular update for every year such the other limits, or neither other customers requesting this update.

Maybe who use goes directly and update the table.

Kind regards,
Graziela

[ChandraV]

Thanks for checking, graziela.dondoni

[dharitree_ravat2]

Hello,

 

We implemented Synchronization HR SP J7 in our system and we have noticed that while processing bonus payment though off-cycle workbench with multiple wage types, system is not saving both the wage types in infotype 267. Payroll gets processed correctly; cluster results also have both wage types but infotype is not updated correctly. Same wage types processed before support stacks are saved correctly on the infotype as well.

Has anyone noticed this issue yet?

Thank you,

Dharitree Ravat

[maddilety_kanuku]

Hi graziela.dondoni, we noticed the processing class 71 specification text differences between production and non production systems, in Production the C4 is the latest package and C6 is in non productive system, Do we know what OSS notes caused this change.

We are not sure if C4 is correct or C6 is correct with descriptions of processing class 71 specifications.

[raghuramchiliveri]

Hello Team,

When there are two OT entries like Week 1 and Week 2, the BSI is exempting the tax for only first week of WT/PPE. Can you please advise.

 

[miteshjain]

Check if there are multiple entries for WT /PPE in RT cluster. If yes, change payroll schema logic to create only one entry of /PPE in RT to store the total overtime pay of week 1 and 2.

[dharitree_ravat2]

Hello all,

 

Issue is resolved now. For those facing the same issue, we need to maintain view VV_T512Z_0267_AL0 with "Sev. times" which in turn will set value 3 in table T591B.

 

Thank you,

Dharitree Ravat