For businesses, complying with employment taxes requires completion and filing of numerous and often redundant forms with multiple agencies, including the Internal Revenue Service, the Social Security Administration, most State Revenue and Labor agencies and even some Cities. This replication increases the cost of doing business and the opportunity for taxpayer errors. In addition to the burden on taxpayers, State and Local agencies are responsible for employment tax processing, depositing of payments, and enforcing compliance. Agencies must capture and process large volumes of employer reports and payments in both paper and various electronic formats, as well as determine compliance with new-hire reporting, unemployment and withholding thresholds. All this while adjusting and adapting systems and processes to legislative changes.
A secure standardized process that reduced or eliminated redundancies, for both taxpayers and agencies, with the ability to meet the unique obligations and requirements of varying jurisdictions was needed to ensure accurate reporting and to support downstream compliance efforts. The process had to simplify submission of state and federal employment reports and payments.
RSI has the Solution
The FSET (Federal/State Employment Taxes) solution is a software application that provides a common framework, complies with IRS E-commerce Requirements Standardization, is secure and easy to use and reduces the expense and complexity of filing, paying and processing employment taxes while increasing the usability of the data for compliance purposes.
The FSET program reduces the filing burden on businesses, including payroll providers, by simplifying the process and eliminating multiple redundant filings. The FSET program standards facilitate the development of commercial software applications for single point electronic transmission of employer tax and wage reports to satisfy a business’s state reporting obligations.
Submission Summary and Payment Options
Similar to the IRS Modernized e-File (MeF) program, FSET provides states, employers and payroll providers a common framework for reporting employment taxes. The FSET program provides schemas for tax withholding and unemployment insurance filings, payments and annual reconciliations. It also supports enrollment of employers by payroll service providers, and data exchanges between payroll service providers and state agencies. New employee and new contractor reporting by employers to states are also supported.
RSI’s FSET Solution
As a mission-critical application, any FSET solution must be secure, reliable and solve the real-world problems that employment tax reporting and processing pose. The best FSET solution provider for any state is one with extensive Tax and Revenue experience, intimate knowledge of the IRS Standards Committee (formerly TIGERS) FSET guidelines, and a proven track record of successful delivery on similar engagements involving integration with existing tax systems.
RSI has the software and the experience, having implemented tax solutions for multiple federal and state tax agencies and through active participation with the IRS Standards Committee. RSI’s complete end-to-end revenue management system, Revenue Premier®, includes a State Gateway component that supports FSET and can be implemented alongside any existing tax system.
Benefits to Businesses and States Implementing RSI's FSET Solution
Once implemented, businesses, both large and small, and payroll providers will use FSET to securely and efficiently file and pay all State employment taxes and unemployment insurance in a single submission, using a uniform format through a generic web services gateway, available 24/7/365. Other benefits of implementing RSI’s FSET Solution include the following:
- Improved security, data handling and flexibility
- Fully compliant with IRS Publication 1075 and NIST security publications and directives
- Supports strong authentication
- Gateway Plug-In architecture allows States to extend the solution to address future business needs without requiring modifications to the core application
- Opportunities to utilize data to improve compliance
- Clean, uniform, “matchable” data simplifies processing and is available much sooner for conducting compliance-related programs
- Accepting both withholding and unemployment insurance information in the combined filing enables agencies to develop compliance programs and achieve improved fraud detection and prevention using wage to withholding comparisons
- Standardization of incoming data simplifies systems for business and states
- Data is electronically submitted and received following a standard format established by the IRS Standards Committee (formerly TIGERS)
- Cost of data capture and correction of errors is reduced
- Simplification of the payment process allows one payment to be accurately distributed to the appropriate agencies based on the filing information
- Viewer capability presents data and any attachments in native format or familiar, simple to read form-based layouts
- Processing efficiency achieved by handling
- State Withholding tax filings (Monthly, Quarterly, Annual Reconciliation)
- State Unemployment tax and insurance filings
- Payments associated with Withholding and Unemployment taxes
Please contact Brian Ridderbush at ext. 400, or via email at BRidderbush@RSImail.com, to see how RSI’s FSET solution can help your agency comply with the latest IRS e-File standards and requirements.