2.10   Service Agent Processing

[ 2.10.1 - Service Agent Processing Procedures ]

The ADP and Audit Unit reviews information received leading to allocation of wage amounts paid by Service Agents.

A "Service Agent" is described as an agent of an employing unit, who, files employer quarterly reports, and pays taxes to the Texas Workforce Commission in their clients' behalf. Written authorization is required for staff to provide information to the service agent but is not required for the service agent to file reports or pay taxes on behalf of a Texas employer.

TWC Rule 815.107 states, employers who have to file a report on 10 or more employees in any one calendar quarter; and other entities, including agents reporting on behalf of multiple employers, who have to file reports on a cumulative total of 10 or more employees in any one calendar quarter must file their quarterly wages on magnetic media .

The employer is required to follow the Magnetic Media filing rules and the format prescribed by this agency. Employers may elect to use electronic media, although they may not have 10 or more employees. The TWC Quickfile program is an alternative method of filing, which allows the employer to comply with Rule 815.107. The Quickfile program is available for download, free of charge, from the TWC web site.

Magnetic media reports are identified on the Transaction Log (TDO) screen in the "DLN" (document locator number) column as those documents, which begin, with 99999.

Rule 815.109(d) states in part, an employer or other entity, including agents paying on behalf of multiple employers, which paid contributions in the preceding state fiscal year of $250,000 or more, and which is reasonably anticipated to do the same in the current fiscal year, is required to transfer payment amounts of contributions by electronic funds transfer…

Service Agents will make this transfer on or before the date the taxes are due. A filer can elect to remit tax payments with the Texas Workforce Commission, using electronic fund transfer, although the criteria is not met.

Additionally, Rule 815.109(f) states that an agent making a payment on behalf of 20 or more employers must furnish an allocation list on Magnetic Media using a format prescribed by this agency.

Service Agents make payments to the Texas Workforce Commission, for allocation to their client accounts, according to the client's tax liability.

The Controller Department posts the remittance to the Service Agent account, and a schedule of monetary transfers are listed on the Service Agent Audit Report to apply the remittance. The ADP & Audit Unit uses this report produced in the Data Processing Department for reconciliation.

Listed on the Service Agent Audit Report header line is the Service Agent TWC account number, remittance postmark date, remittance number, and remittance amount. The sum of the individual account tax liabilities should equal the service agent's remittance sent to the Texas Workforce Commission.

Amounts that post are listed as Valid Transactions. When amounts transmitted do not match with the client account as intended by Service Agent they will be on the edit portion of the report as Invalid Transactions.

Invalid account numbers will be resolved to apply the original remittance amount to the correct accounts. Conditions that produce an invalid transaction are:

the Service Agent is using an unidentifiable account number, or

the requested transfer amount is greater than the funds available for transfer.

When there are Service Agent Transfer account balance errors, feedback will originate from the Service Agent, employers, or through Field or State Office Tax personnel, regarding balance or adjusted amounts.

2.10.1    Service Agent Processing Procedures

Review the client list submitted by the Service Agent. This lists remittances paid, taxable wages reported, and the name of employers, in ascending account number order.





Review the edit produced in the Data Processing Department Possible Problem Accounts Reporting C-4 Wages For a Batch (report WBO18X). This report provides final wages date, inactive status of an account, or an account not on the Employer Master File (EMF) screen, i.e., no such account number exists. Often, this report will explain the basis for the discrepancy posted as an invalid transaction on the report.





If the reason for an invalid transaction is not apparent, conduct an in-depth search to determine the reason. This will include contacting the Service Agent or the employer in order to resolve the discrepancy, by phone or correspondence.





Use the Employer Tax System Service Agent Transfer (QSA) screen to debit the Service Agent account and credit the client account. The QSA screen is a controlled screen, limited in the Tax Department use to the ADP & Audit Unit supervisor or designee.





Contact the Service Agent to obtain additional funds to balance the transfer amounts requested by the Service Agent. Immediate contact by telephone is preferred, however, e-mail or letter are options if the Accounts Examiner cannot reach the Service Agent by telephone.





Document all actions taken on the ENTITY COMMENTS screen (FTC) or DELINQUENCY COMMENTS screen (CDC).