Deduction Types Overview
Introduction
The article is an overview of the various Deduction Type (DedType) codes available in ReadyPay Desktop (RPD) and ReadyPay Online (RPO).
Ded Types provide a variety of functionality in the software. Some are used solely to identify deductions used by specific types for reporting purposes. Technically, all Ded Types can be used for reporting purposes. Many, however, have additional functionality. Some control the taxation of the associated deduction code, and in some cases, where that deduction is displayed on Form W2.
Application in RPD/RPO
Reporting
A number of Ded Types were specifically created to facilitate reporting. In the past, Code Groups were mainly used when multiple deduction codes were needed to be considered by a report. When adding a new deduction code to a company, any Code Groups in use would need to be updated manually. Use of ded types allows for automatic inclusion of all deduction codes with a particular ded type. If a new deduction code is added using the particular Ded Type, the deduction code is automatically included without modifying the report. This includes RPD/RPO standard and Custom Crystal reports.
Ded Types have limited application in Report Writer. The RW Report Type "Company Deductions" allows the display of deduction codes and the associated Ded Type (if any).
Scripting
Ded Types can also be used with VB Scripting Functions. This includes Company Calc Codes, Company Scripting, and System Level Calc Codes and Scripting.
The VB Commands to access data by Ded Types are:
GetDedTypeAmountGetDedTypeHours
Syntax is GetDedTypeAmount("DedType") or GetDedTypeHours("DedType").
Replace DedType with the Ded Type you need (Reg, OT, GTL).
Explanation of Ded Type Codes
Following is a list of the Ded Types in RPD/RPO and a description of their use. Ded Types (and Earn Types) are created and maintained by Taslar. They are housed in a system level database table called SCodeTypes. You cannot modify the system codes or create your own Earn or Ded Types.
See also: Earning Types Overview.
Additional Information
If the Function column indicates a W2 Field is being set, that value is locked in by the system and cannot be changed.
When adding a new deduction code, if you inadvertently select an incorrect Ded Type that sets a W2 field, you simply change the Ded Type. This will remove the W2 Field setting if none applies. If you change the Ded Type to one that sets the W2 Field, the W2 Field will be reset to the correct value for the newly chosen Ded Type. Additionally, if the new Ded Type indicates it affects Taxability, those Taxable settings will be applied (added or removed as needed by the new Ded Type) as well.
You cannot change the Ded Type on a Deductions Code if the "In History" field on the Deductions Code is set to Yes. The "In History" field is found in Company Setup > Deductions > Other Options Sub Tab.
In the Function column, there are notations of "Automatically sets taxability" on certain Ded types. "Automatically sets taxability" is used when the taxability of that item varies by state or federal agency. In those cases, logic in the tax engine sets the taxability based on the rules of those agencies.
Ded Types beginning with "Memo" make the associated Deductions Memo entries. Memo entries are not considered for taxable Deductions. Memo entries are typically used to record information for reporting purposes. They are generally excluded from totals on most reports.
Ded Types beginning with "Add" are Add to Net deductions. Entering a positive amount for an employee deduction will add that amount to the net of the pay with no tax/taxable ramifications.
Almost all deductions associated with a Ded Type can be used without additional setup being required. Simply entering the deduction code in payroll or on the employee's deduction tab is sufficient to make the deduction function. Additional setup may be required in select cases. That topic is outside of the scope of this article.
Several Ded Types are noted as "Pre-Tax Retirement Plan" Ded Types in the Function Column. Pre-Tax Retirement Plans have guidelines that change yearly. Those guidelines (YTD Deduction Limit, taxability) are built into the system and are applied to the associated deductions based on the year of the check date. The rules vary depending on the Pre-Tax Retirement Plan in question. The guidelines are updated each year after they are released by the IRS. There is nothing the user needs to do for the proper guidelines to be in effect.
There are also "Post-Tax Retirement Plan" Ded Types. These have a Ded Type that begins with Roth. Post-Tax Retirement Plans have guidelines that change yearly. The guidelines (YTD Deduction Limits) are built into the system and are applied to the associated deductions based on the year of the check date. The rules vary depending on the Post-Tax Retirement Plan in question. The guidelines are updated each year after they are released by the IRS. There is nothing the user needs to do for the proper guidelines to be in effect.
There will be cases where both Pre-Tax and Post-Tax Retirement plans are in use within a company. There are combined contribution limit rules in the software for these situations: e.g., an employee has a Pre and Post Tax Deduction. The total of the two cannot exceed the YTD deduction limit for 401k type plans.
There are several Ded Types used with a variety of Pre-Tax Insurance deductions (Health, Medical, Dental, Vision, etc.). These Ded Types also have guidelines that change yearly. Those guidelines are built into the system and are applied to the associated deductions based on the year of the check date. The guidelines are updated each year after they are released by the IRS. There is nothing the user needs to do for the proper guidelines to be in effect.
The Pre-Tax Insurance Ded Types are:
- All those starting with 125
- All those starting with Dep Care
- FSA
- All those starting with HSA
| Ded Type Code | Description | Function |
|---|---|---|
| 125 HSA FAM ER | 125 Health Savings Account Family Employer Match | Automatically sets taxability. Sets W2 Field to 12W (ER Contributions to Health Savings Account). |
| 125 HSA FAM | 125 Health Savings Account Family | Automatically sets taxability. Sets W2 Field to 12W (ER Contributions to Health Savings Account). |
| 125 HSA IND ER | 125 Health Savings Account Employer Match | Automatically sets taxability. Sets W2 Field to 12W (ER Contributions to Health Savings Account). |
| 125 HSA IND | 125 Health Savings Account Individual | Automatically sets taxability. Sets W2 Field to 12W (ER Contributions to Health Savings Account). |
| 125 | 125 | Automatically sets taxability. Sets W2 Field to 14A (S125). |
| 129 | 129 | Sets no tax overrides. No W2 Field set. |
| 401a | 401a | Pre-Tax Retirement Plan. Automatically sets taxability. Sets W2 Field to 14 (Any available box 14 line). |
| 401k Loan | 401k Loan | Sets no tax overrides. No W2 Field set. |
| 401k Over | 401k Over | Sets no tax overrides. No W2 Field set. |
| 401k | 401k | Pre-Tax Retirement Plan. Automatically sets taxability. Sets W2 Field to 12D (401k). |
| 403b | 403b | Pre-Tax Retirement Plan. Automatically sets taxability. Sets W2 Field to 12E (403b). |
| 408k | 408k | Pre-Tax Retirement Plan. Automatically sets taxability. Sets W2 Field to 12F (408k). |
| 457b | 457b (see article: Annual Limitations for 457 Plans) | Pre-Tax Retirement Plan. Automatically sets taxability. Sets W2 Field to 12G (457(b)). |
| 501c | 501c | Pre-Tax Retirement Plan. Automatically sets taxability. Sets W2 Field to 12H (501c). |
| Add | Add to net | Sets no tax overrides. No W2 Field set. |
| AddExpenseReimb | Add Expenses To Net | Sets no tax overrides. No W2 Field set. |
| AddMileage | Add Mileage To Net | Sets no tax overrides. No W2 Field set. |
| AddPerDiem | Add Per Diem To Net | Sets no tax overrides. No W2 Field set. |
| AddUniformReimb | Add Uniform To Net | Sets no tax overrides. No W2 Field set. |
| BankruptcyFed | Federal Bankruptcy | Sets no tax overrides. No W2 Field set. |
| BankruptcyState | State Bankruptcy | Sets no tax overrides. No W2 Field set. |
| ChildSupport | Child Support | Sets no tax overrides. No W2 Field set. |
| ChildSupportFee | Child Support Fee | Sets no tax overrides. No W2 Field set. |
| CredGarnishment | Creditor Garnishment | Sets no tax overrides. No W2 Field set. |
| Dep Care FAM ER | Dependent Care Family Employer Contribution | Automatically sets taxability. Sets W2 Field to 10 (Dependent Care Benefits). |
| Dep Care FAM | Dependent Care Family | Automatically sets taxability. Sets W2 Field to 10 (Dependent Care Benefits). |
| Dep Care IND ER | Dependent Care Individual Employer Contribution | Automatically sets taxability. Sets W2 Field to 10 (Dependent Care Benefits). |
| Dep Care IND | Dependent Care Individual | Automatically sets taxability. Sets W2 Field to 10 (Dependent Care Benefits). |
| Dep Care Over | Dependent Care Over Limit | Sets no tax overrides. Sets W2 Field to 10 (Dependent Care Benefits). |
| FSA | Health Flexible Spending Account | Automatically sets taxability. Sets W2 Field to 14F (No description). |
| HSA FAM ER | Health Savings Account Family Employer Match (see Health Savings Account Setup Guide) | Automatically sets taxability. Sets W2 Field to 12W (ER Contributions to Health Savings Account). |
| HSA FAM | Health Savings Account Family | Automatically sets taxability. Sets W2 Field to 12W (ER Contributions to Health Savings Account). |
| HSA IND ER | Health Savings Account Individual Employer Match | Automatically sets taxability. Sets W2 Field to 12W (ER Contributions to Health Savings Account). |
| HSA IND | Health Savings Account Individual | Automatically sets taxability. Sets W2 Field to 12W (ER Contributions to Health Savings Account). |
| KJDAC | KJDAC | KY Job Development Act Deductions. |
| KJDAS | KJDAS | KY Job Development Act Deductions. |
| KREDAC | KREDAC | KY Rural Development Act Deductions. |
| KREDAS | KREDAS | KY Rural Development Act Deductions. |
| Levy | Levy | Sets no tax overrides. No W2 Field set. |
| Loan | Employee Loan (non-401k) | Sets no tax overrides. No W2 Field set. |
| Memo | Memo | Sets no tax overrides. No W2 Field set. |
| Roth 401k | Roth 401k | Post-Tax Retirement Plan. Sets no tax overrides. Sets W2 Field to 12AA (Roth 401k). |
| Roth 403b | Roth 403b | Post-Tax Retirement Plan. Sets no tax overrides. Sets W2 Field to 12AA (Roth 401k). |
| Roth 457b | Roth 457b | Post-Tax Retirement Plan. Sets no tax overrides. Sets W2 Field to 12AA (Roth 401k). |
| Roth IRA | Roth IRA | Post-Tax Retirement Plan. Sets no tax overrides. Sets W2 Field to 12AA (Roth 401k). |
| Simple 401k | Simple 401k | Pre-Tax Retirement Plan. Automatically sets taxability. Sets W2 Field to 12D (401k). |
| Simple | Simple IRA | Pre-Tax Retirement Plan. Automatically sets taxability. Sets W2 Field to 12S (SIMPLE). |
| State Levy | State Levy | Sets no tax overrides. No W2 Field set. |
| StudentLoanFed | Federal Student Loan | Sets no tax overrides. No W2 Field set. |
| StudentLoanState | State Student Loan | Sets no tax overrides. No W2 Field set. |
| Uniform | Uniform Deduction | Sets no tax overrides. No W2 Field set. |
| Union Dues | Union Dues | Sets no tax overrides. Sets W2 Field to 14Y (Union Dues). |
| WA L + I | WA L + I | Sets no tax overrides. No W2 Field set. |
| WageAgreement | Wage Agreement | Sets no tax overrides. No W2 Field set. |
| WC | WC | Sets no tax overrides. No W2 Field set. |