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On yesterday's SIG call, I heard about Doc ID 2726203.1 which describes what you need to do to get the Covid-19 pay amounts to print in box 14 on the W-2's. One thing that it says is that you need to change the basis of calculation on all of your pre-tax deductions so the Covid-19 pay types are listed separately rather than in a range. That's a large undertaking, so I started looking into why this is necessary. After looking at the code, I opened an SR with the following text. I'll update this post when I get a response but thought I might be able to save us all some time if this isn't necessary.
Bug in N0700636 causes it to use last Basis of Calculation record to determine if a DBA is pretax
I took the payroll year-end update this week (JN18550). Then I read Doc ID 2726203.1 which explains the setup necessary for getting the Covid-19 pay into box 14 on the W-2. It explains that you need to change the basis of calculation on all of your pre-tax deductions so the Covid-19 pay types are not part of a range. I was curious how the programs are going to use the basis of calculation, so I looked at the objects in the ESU and saw N0700636 - Determine PDBA Type for Pretax. When I looked at the event rules for this business function, I noticed 2 things.
1 - This business function is looking to see if the pay type is within the range specified on each of the Basis of Calculation records for the deduction in F069036 to determine if it is a pretax deduction for the pay type. So if this is the only code that is determining whether the DBA is a pretax deduction for the pay type, then I don't think we would need to go through the tedious effort of changing the basis of calculation for every pre-tax deduction because it should find it in the existing ranges. Can you verify that this is really necessary before we start that process?
2 - There appears to be a bug in N0700636. The code is reading every Basis of Calculation record in F069036 for the DBA to determine if the pay type is in the range, but it doesn't stop when it finds a record that contains it. It keeps reading the rest of the records, so the DBA will only get flagged as a pre-tax deduction for the pay type if the pay type is found in the last basis of calculation record for the deduction. The While statement needs to be changed so it stops when BF cPreTaxDedYOrN = "Y".
UPDATE - After I took the ESU that was released on 12/24/20, I confirmed that Oracle fixed the problems. Document 2726203.1 still stated that you needed to list all of the Covid pay types separately in the basis of calculation for all of the pre-tax adjustments. However, Oracle updated that document today (1/4/21) after they ran a test confirming that this is not necessary.
On the December 15 HCM call, Oracle said that they are changing the functionality and will have an update coming in an ESU on Dec. 24. There will be some processing options to specify how you want to handle pre-tax deductions that are on checks with both Covid pay and non-Covid pay. It is unclear yet if this update will also eliminate the need to list the pay types separately in the basis of calculation of the pre-tax deductions. Oracle will update the documentation to update or replace Doc ID 2726203.1.
I'm not satisfied with the response that I got from Oracle, so I sent a follow-up. I don't see anywhere in the code where it is looking for the pay types to be listed separately in the basis of calculation. They mentioned that it is looking at tax exemptions, and I haven't seen any code looking at tax exemptions that relates to the basis of calculation on the pre-tax deductions, so it is possible that there is some code that I haven't found yet. I asked if they would let me know which program contains such code.
I also questioned whether the code in N0700635/N0700636 calculates the taxable Covid-19 pay accurately. The code is finding checks with Covid-19 pay and then subtracting the pre-tax deductions on those checks that are based on the Covid-19 pay. The problem is that those pre-tax deductions are based on Covid-19 pay types and regular pay types. So if a check had both regular pay and Covid-19 pay, it is subtracting the entire deduction amount from the Covid-19 pay to get the taxable Covid-19 pay. I don't know if this was an oversight or a decision that Oracle made.
I got the following response from Oracle to my SR.
For item #1, the program will look at basis of calculation but also at the tax exemptions for the covid pay types. You do need to go through the basis of calculation for the covid pay types and make sure they are entered individually and not in a range.
For item #2, I will test this and let you know my results.
Also, make sure that all of your pre-tax deductions are set up correctly on the US Leg/Reg screen. We had an HSA deduction that was not flagged as an HSA pre-tax deduction but was rather entered as a regular deduction using tax exemptions. The code in N0700636 will not process such deductions as pre-tax deductions.