What organization configuration is required for third-party tax reporting?

You must configure your tax reporting units (TRUs) for accurate third-party tax filing.

For employees, each TRU is a separate company and assigned a client identifier by the third-party supplier. The extract output file can include multiple batches, each representing a TRU.

For retirees, each TRU within a given payroll statutory unit (PSU) represents one or more distribution codes. The third-party supplier assigns one client identifier per PSU. Use this client identifier for all TRUs within that PSU. The extract output file can include multiple batches, but a PSU represents each batch, not a TRU.

Note:

For periodic tax filing, ADP can't process retirees and employees in the same batch. You must submit their payroll data either in separate files or in separate batches in the same file, reporting by different TRUs.

For quarterly tax filing, employees and retirees can't be in the same file.

What you need to configure	How you do it
All TRUs	For each TRU: Start the Manage Legal Reporting Unit HCM Information task. Select Federal. In Third-Party Interfaces, enter either the Client Identifier or 1099-R Client Identifier number provided by your supplier. The maximum length for ADP is 14 characters. MasterTax doesn't issue a client ID, so you can enter any value up to 14 characters. The process interprets a blank value as instructions to exclude the TRU. Use the Legal Reporting Unit Registrations task to define the United States Federal Tax jurisdiction. Some payroll processes require this setting, such as Archive Periodic Payroll Results.
TRUs with no payroll data	By default, the extract captures data for all TRUs, including those with no active payroll data for the year. Reporting these TRUs in the quarterly tax file might generate errors from ADP. To exclude a TRU, enter EXCLUDE for Client Identifier. To exclude a retiree TRU, enter EXCLUDE for Form 1099-R Client Identifier. Note: Excluded TRUs aren't reported on the audit report or output file. If you mark a TRU for exclusion, it won't be included on the monthly or quarterly tax file, even if it has payroll activity for the reporting period.
TRUs for retirees	A single periodic file can include tax info from both employee and retiree TRUs. However, they must be in separate batches. Note: If your payroll includes retirees, you must perform special configuration for organizations.
TRUs for US territories	For TRUs belonging to US territories, use Territory Identifier in the Territory Rules section. Leave this field blank for continental US TRUs.
California employees	If you have employees in California, provide your Wage Plan Code: At the PSU level, use the Legal Entity HCM Information task At the TRU level, use the Legal Reporting Unit HCM Information task Reenter the value in Wage Plan Code at the Regional level. Entering a value at TRU level overrides the value for the PSU. You can override both on an individual employee's reporting card.
New Jersey employees	If you have employees in New Jersey, provide your family leave insurance (FLI) plan and disability plan types. If you're opting for private plans, provide the plan numbers as well. Use the Legal Reporting Unit HCM Information task to enter these values at the Regional level. If you're using private plans, the plan numbers are displayed on the employee W-2.
Combined-filer status for Pennsylvania	If you're registered as a combined filer for Pennsylvania Act 32 taxes, provide your Tax Collection District (TCD) combined-filing proxy. At the PSU level, use the Legal Entity Calculation Cards task At the TRU level, use the Legal Reporting Unit Calculation Cards task Enter the value in TCD Combined Proxy Filing for your Pennsylvania State Income Tax calculation component. If you're opting to become a combined filer after your initial implementation, set this field only after completing all your payroll runs for the current year. For new implementations, set this field before running your first payrolls. Note: Pennsylvania Act 32 tax collectors require you have combined filing designation for a full calendar year to the same tax collector. Don't change this designation midyear, as it would cause the tax-filing extract to report multiple rows incorrectly on your tax files. After you set this value, the payroll process populates it in run results for the Tax Collection District Code on: City Tax elements Local Wages and Taxes elements If you're not a combined filer, there's no configuration required. The payroll process populates the Tax Collection District Code in run results according to Pennsylvania Act 32 requirements.