Configure Tax Reporting Units for the US

Tax reporting units (TRUs) are a necessary component of your organization. As you define your legal reporting units (LRUs), you must be sure you designate them as TRUs and configure them correctly.

There are several steps to defining and configuring a TRU.

What you want to do	How you do it
Designate an LRU as a TRU	Use the Legal Reporting Unit task in your implementation project.
Configure a TRU for retiree support	A TRU can represent either employees or retirees. If you have retirees in your organization, you have to define separate TRUs for them.
Configure a TRU for territory support	A TRU can represent continental US or territorial workers. If you have both in your organization, you have to define separate TRUs for them.
Recognize tax limits across multiple TRUs	If you have more than one TRU associated with a payroll statutory unit (PSU), the amounts the payroll process calculates toward maximum wage and tax limits are recognized across all of them. However, you need to perform some special set up steps if: There are federal limits that must be observed across your TRUs, such as Social Security wage limits. For further info, see Limit Taxes in the Help Center. You have employees that work in multiple TRUs, and you regularly have to use person-level balances. The PSU is for employees and not retirees.
Configure the TRU for payroll and HR reporting	Make sure you have provided all the info required for VETS, EEO, and New Hire reporting.
Configure the TRU for payroll processing by a third-party	If you're using a third party to help with payroll processing, you need to provide some additional info on the TRU. Use the Legal Reporting Units task.
Specify details required by the Affordable Care Act (ACA)	For detailed instructions on configuring a TRU for ACA reporting, see Cloud Human Capital Management for the United States: US Affordable Care Act on the Help Center.

For further info, see the following sections.

How to Designate an LRU as a TRU

Identifying LRUs as TRUs is necessary for payroll processing, HR reporting, and electronic year-end and quarterly filings.

This is because they define:

Person type for payroll processing
Federal tax rules
Regional tax rules
State unemployment insurance (SUI) rates
State disability insurance (SDI) rates
Federal employer identification number (EIN)
Registered name
Contact details
Other details of the TRU associated with the legal employer

To define a TRU:

From My Client Groups, click Workforce Structures.
Click Legal Reporting Unit HCM Information.
Click Tax Reporting Unit.
If the TRU's legal employer isn't a PSU, choose a parent PSU.

In this way, it's indirectly associated with a legal employer through the association with a PSU.

If the legal employer is a PSU, this association happens automatically.

Special Steps for Defining Retiree TRUs

You can't assign retirees and employees to the same TRU. They must have separate TRUs.

A retiree TRU must be:

Associated with a payroll statutory unit (PSU) designated only for retirees
Unique to a 1099-R distribution code or combination of codes that your organization uses

Retirees you add to this TRU receive the associated distribution code on their Form 1099-R.

To define a TRU for retirees:

Start the Legal Reporting Unit task in your implementation project, and open the TRU for editing.
Click Tax Reporting Unit, and click Federal.

Enter the following values.

In this section	For this field	Do this
Federal Year-End Reporting Rules	Person Type for Payroll Process	Select Retiree.
Third-Party Interfaces	Form 1099-R Client Identifier	Used by the Third-Party Tax Filing Interface. For further info, see the Oracle Cloud Human Capital Management for the United States: Third-Party Tax Filing Interface (1594079.1) on My Oracle Support.
Form 1099-R Distribution Code	Form 1099-R Distribution Code	Select the appropriate distribution code for this TRU. All people assigned to this TRU are assigned this code.
Form 1099-R Distribution Code	Total Distribution	Select Yes if all payments made from this TRU are total distributions. To identify specific payments as total distributions, use the Total Distribution field on the TRU's Retiree Reporting Information section of the retiree's Reporting Information card. For further info, see the following in the Help Center: How the Quarterly Tax-Filing Extract for Retirees Identifies Total Distributions Reporting Information Calculation Card for the US

Special Steps for Defining TRUs for US Territories

Don't assign both US and territorial workers to the same TRU. You must set up one or more TRUs for each territory. Each territorial TRU must be specific to a single US territory. If you have retirees in US territories, you must assign them to a separate TRU from the regular employees.

This configuration is similar to state configurations. However, there are additional steps you must perform for US territories.

For further info, see Tax Reporting Units for US Territories in the Help Center.

Recognize Tax Limits Across Multiple TRUs

If you have more than one TRU associated with a PSU, the amounts the payroll process calculates toward maximum wage and tax limits are recognized across all of them. However, you need to perform some special set up steps if:

There are federal limits that must be observed across your TRUs, such as Social Security wage limits.
You have employees that work in multiple TRUs, and you regularly have to use person-level balances.
This doesn't apply to PSUs you set up for retirees.

If this is the case, you have to configure your organization to recognize balances across the TRUs.

Identify each company as a separate TRU.
Assign each TRU to the same PSU.

Payroll relationships represent the highest level of balance aggregation. Employees working in multiple TRUs under the same PSU would have one payroll relationship.

The payroll process includes person-level balances that span multiple TRUs. However, when an employee is in multiple PSUs, they have multiple payroll relationships. The person-level balances won't span across the different PSU payroll relationships.
Configure how the payroll process tracks your federal and state limit taxes.

For further info, see Limit Taxes in the Help Center.

Note: If you must have multiple PSUs and still need to access person-level balances across these PSUs, you can import previous PSU balances to the new PSU. For further info, see Oracle Cloud Human Capital Management for United States: Balance Adjustments (1600728.1) on My Oracle Support.

Configure the TRU for Payroll and HR Reporting

Follow these steps to make sure you have provided all the info required for end-of-year, New Hire, EEO, and VETS reporting.

For New Hire Reporting, you associate a default TRU with a legal employer.
1. From My Client Groups, click Workforce Structures.
2. Click Legal Entity HCM Information.
3. Select the legal employer.
4. Click Legal Employer, and then click Federal.
5. For New Hire Report, select your TRU.
6. Submit your work.

For New Hire, EEO, and VETS reporting:

From My Client Groups, click Workforce Structures.
Click Legal Reporting Unit HCM Information.
Open the TRU you identified as the default for New Hire reporting.
Click Tax Reporting Unit, and click Federal.
In Federal Year-End Reporting Rules, specify the person type for payroll processing, either Employee or Retiree.

Specify the following in EEO and VETS Reporting Rules.

Field name	What you enter
Employment Category	Each employee to be included in HR reporting must have an employment category. Select the employment categories to be included in the report.
Establishment Employer Type	Select Multiple if you're a multiple establishment employer. Select Single if you're a single establishment employer.
Headquarters Establishment	Select your headquarters location.

Field name

What you enter

Employment Category

Each employee to be included in HR reporting must have an employment category. Select the employment categories to be included in the report.

Establishment Employer Type

Select Multiple if you're a multiple establishment employer.

Select Single if you're a single establishment employer.

Headquarters Establishment

Select your headquarters location.

Note: The report processes ignore these values set for any other TRU.

Specify the following in EEO Reporting Information.

Field name	What you enter
Affiliated with Enterprise of 100 Employees or More	Select Yes to indicate that your entire company employs 100 or more employees. Select No if your entire company employs fewer than 100 employees.
Company Number	Enter the unique company identifier assigned by the EEOC.
Company Employs More than 100 Employees	Select Yes to indicate that your company employs more than 100 employees. Select No if your company employs fewer than 100 employees.
Government Contractor	Indicate if you're a government contractor.

Specify the following in VETS Reporting Rules.

Field name	What you enter
Parent Company	Specify your parent company headquarters.
Type of Reporting Organization	Select Prime Contract, Subcontractor, or Both.
Company Number	Enter your unique company identifier.

Specify the info required for year-end and quarterly filings. On the Tax Reporting Unit tab, click Federal.

For further info, see Oracle Cloud Human Capital Management for United States: End-of-Year Processing Guide (1944400.1) on My Oracle Support.
Click Submit.

Click the appropriate regional link to enter additional info to support your year-end and quarterly filings.

Entry in these fields overrides any values entered for the PSU.

Configure LRU Info for Third-Party Applications

You can use different third-party applications to help you in a variety of ways, including involuntary payments, year-end and quarterly tax data, and payment data.

Use the Third-Party Tax Filing Interface to submit your year-end and quarterly tax data to a third-party provider for processing and submission. Examples of a provider include ADP or MasterTax.
Use the Third-Party Involuntary Payment Interface to submit payment data to a third party for processing.

For further info, see the following on My Oracle Support:

Oracle Cloud Human Capital Management for the United States: Third-Party Tax Filing Interface (1594079.1)
Oracle Cloud Human Capital Management for the United States: Third-Party Involuntary Payments Interface (2043941.1)

To define info required by your third-party providers, as well as reports and processes for the US:

From My Client Groups, click Workforce Structures.
Click Manage Legal Reporting Unit HCM Information.
Click Tax Reporting Unit, and click Federal.
In Third-Party Interfaces, enter the following.

Field name	What you enter
Client Identifier	Employer client ID as provided by ADP. This ID be more than 14 characters long. Used with the Third-Party Tax Filing Interface and Third-Party Involuntary Payment Interface.
Branch Identifier	Value assigned to the branch by ADP. Used with the Third-Party Involuntary Payment Interface.

Field name

What you enter

Client Identifier

Employer client ID as provided by ADP. This ID be more than 14 characters long.

Used with the Third-Party Tax Filing Interface and Third-Party Involuntary Payment Interface.

Branch Identifier

Value assigned to the branch by ADP.

Used with the Third-Party Involuntary Payment Interface.