2What are the predefined wage basis rules for the US?

Predefined wage basis rules help determine the taxation of earnings at the federal and state levels. There are no predefined wage basis rules at the local level.

They include rules for primary classifications of supplemental earnings, imputed earnings, and pretax deductions along with the corresponding secondary classifications.

Note:

Involuntary deductions have their own wage basis rules. For further info, see Involuntary Deduction Wage Basis Rules for the US in the Help Center.

To view wage basis rules:

1. Start the Component Group Rules task.

2. Select your US legislative data group (LDG).

3. Select Federal.

4. In the tree structure, expand the Federal and Wage Basis Rules nodes. Select No References.

5. View the wage basis rules for Imputed Earnings, Pretax Deductions, and Supplemental Earnings, as they relate to each federal-level tax.

   • For Earnings, a check mark indicates the earning is subject to that tax.

     The Not Withholdable Federal Tax column indicates the earning is subject to federal tax but no tax is withheld.

   • For Pretax Deductions, a check mark indicates that the deduction is subject to taxation and doesn't reduce subject wages.

     If no check mark is present, then the deduction isn't subject to taxation and does reduce subject wages.

6. Select Regional.

7. In the tree structure, expand the Regional and Wage Basis Rules nodes. Select State.

8. View the wage basis rules for Imputed Earnings, Pretax Deductions, and Supplemental Earnings, as they relate to each state-level tax.

9. Due to the large volume of data, you can filter the data to view a state. Enter a search string in the field above State. If no field is available above the State column, click Filter.

To edit the predefined wage basis rules:

1. Start the Component Group Rules task, and select your US LDG.

2. In the tree structure, navigate to the appropriate Wage Basis Rules node.

3. Click Create.

4. Enter an effective date.

5. If you're updating the State node, select the appropriate state.

6. Select a primary classification and secondary classification.

7. Suspend the predefined rule.

   1. For Subject to wage basis rule, select No.

   2. Click Submit.

8. Navigate to Federal Tax or State Tax under Related Deductions, and select Wage Basis Rules.

9. Click Create.

10. Enter an effective date.

11. If you're updating the State node, select the appropriate state.

12. Select a primary classification and secondary classification.

13. Create the rule.

    1. Mark the Subject to wage basis rule as Yes.

    2. Click Submit.

For example, for Group Term Life (GTL) for applicable federal and some state components, the default rule is Not withholdable. You may want to change this to Withholdable.