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FSET BACKGROUND AND STATUS

The FedState Employment Taxes efile program, FSET, is an outgrowth of the Simplified Tax And Wage Reporting System (STAWRS) initiative of the 1990s. One goal of STAWRS was to respond to the need for employers to report essentially the same data to half a dozen different federal and state agencies. FSET addresses the state portion of that issue, and provides for the electronic filing and payment of both Withholding and Unemployment Insurance taxes, either as separate returns or as a combined filing. The technical deliverables of FSET are developed and maintained by TIGERS. The first TIGERS schema set for FSET was released in 2003.

The FSET schemas were originally modeled after the IRS 940/941 XML based efile program. This program was never expanded to include fed/state capability, so in spite of its name, FSET is currently a direct state efile program. In the meantime since 2003, IRS moved forward with the development of the Modernized eFile (MeF) platform for Corporate and Partnership returns, and will support 1040 efile under MeF in 2010. Current IRS plans are to implement MeF for 940/941, including FedState support, in 2012.

TIGERS is now nearing completion of a new Version 4 release, which is compatible with MeF. This new version adopts common components and structures that have been developed for the FedState Corporate, Partnership, and Individual programs. New schemas are being added at the request of the payroll service industry, to support automated enrollment of employers by the payroll agents, and to support taxpayer information exchange between payroll agents and revenue agencies. Schemas for new hire and new contractor reporting have been added at the request of the states. New states considering implementation of FSET are encouraged to utilize this new version.

The FSET project team within TIGERS is developing a generic web services gateway for states and industry to use with FSET. In Fed/State MeF efile, the IRS is the web service host, and both states and industry are clients. The proposed FSET gateway would support each state as a host, with industry as clients. The goal is to mimic IRS gateway methods to the extent practical, so that industry will have the same interface across states that they currently have with IRS. This will also make the transition of FSET to Fed/State MeF in 2012 comparatively transparent to the payroll service providers.

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Last modified: Wednesday, 12-Jan-2011 19:32:45 UTC