11 code 119 missing taxable wage check
Missing Taxable Wage Check - Code 119
During the first calendar quarter, virtually all active, non-delinquent, experience-rated employers will show non-zero taxable wages, since it forms the new tax year as well, and the employers should all be liable for unemployment insurance taxation. But there is only a set amount that an employer can be taxed per employee throughout the year. This maximum tax amount is found from the equation:
TaxMax is the maximum tax (contribution) amount per employee, TWB is the State taxable wage base (amount of wages that can be taxed for an employee), and TxRt is the employer’s tax rate. By the second quarter, therefore, some employers have already paid their year’s quota of taxable wages, which exempts them from taxation through the remainder of the year.
Note: A special case exists for California. Firms there often show zero taxable wages in the early part of the year, then make up for it in the last quarters, producing a unique accounting system from other States’ procedures. Since California makes up a large segment of the U.S. economy, however, they are exempt from running this edit.
This edit is designed to identify those experience-rated employers that are missing the first-quarter taxable wages, which should presumably be present. Several conditions must be found in combination for this to be flagged. First, the type of coverage must be ‘0’ (experience-rated account), since they are the only ones subject to percentage-based taxation. Second, the processed quarter must be ‘1’. Third, as with most micro edits, the activity status code must be ‘1’ (active), since inactive accounts obviously aren’t going to be taxed. Fourth, the total wage amount must exceed the no-employment maximum total wage parameter (PK020 in the Lookup File), since an account with minimal wages is inconsequential to the edit. Finally, the taxable wages must be zero. If all of these conditions are found to exist for an account, it is flagged for missing first quarter taxable wages. The taxable wage field will also be underscored in the edit exception report. BLS classification: C.1.8. EXPO “G” code: C119.
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