Confused about a specific term or acronym? Solve the mysteries of terminology with this informative resource. Updated regularly with industry-specific vocabulary and concepts, the Glossary provides easy-to-understand definitions of tax-related terms.
Earned Income Credit (EIC) A special federal program that allows low-income employees to be reimbursed by their employers for a portion of their Federal Income Tax (FIT) withholdings. Employer can then claim those reimbursements as credits on Form 941 (Quarterly Federal Return).
Earnings Allowance The amount prescribed by State unemployment compensation laws that a claimant may earn without any reduction in the weekly benefit amount for a week of total unemployment
Easy Pay ADP payroll solutions for companies with 1 to 99 Employees.
EBS See Emerging Business Servicessm.
EBTS See Electronic Business Tax Service.
EEO EEO - Equal Employment Opportunity
EFT See Electronic Funds Transfer.
EFTPS See Electronic Federal Tax Payment System.
EIC See Earned Income Credit.
EIN See Employer Tax Identification Number.
ELECTRONIC BUSINESS TAX SERVICE Electronic Business Tax Service (EBTS) An added-value ADP service that enables clients to use a touch-tone telephone system to deposit business income and excise tax payments electronically as required by the Electronic Federal Tax Payment System (EFTPS).
ELECTRONIC FEDERAL TAX PAYMENT SYSTEM Electronic Federal Tax Payment System (EFTPS) An electronic system for reporting and paying federal taxes. Typically refers to an Internal Revenue Service (IRS) regulation requiring that taxpayers within a specific threshold for federal employment tax deposits make all of their business tax payments electronically. For more information visit this www.eftps.gov
Electronic Funds Transfer (EFT) Some states and federal agencies require employers to pay unemployment taxes by electronic funds transfer. There are several regulations for electronic funds transfer.
Eligibility Determination A determination as to whether a claimant meets all of the eligibility conditions prescribed by law.
Emerging Business Services ® A division of ADP serving employers with less than 100 employees.
Employee An individual performing services for an employing unit, as defined by state law, under a master/servant or employer/employee relationship.
Employee Contributions The unemployment compensation taxes required by a very few State unemployment compensation laws to be deducted by the employer from an employee's pay and paid with the employer's contribution to the State agency.
Employee Leasing Company (PEO) A company that leases employees, to another business, on a contract basis. They handle all personnel matters and are generally considered the employer of the leased employees.
Employer An employing unit, as defined, subject under State or Federal unemployment compensation laws.
Employer-Allowed Fee An administrative fee collected by an employer from an employee for processing a lien. The legality, amount, and collection frequency vary by state
Employer Contributions See Contributions - Employer
Employer Services The business unit of ADP engaged in providing clients with employer-related services, including human resource management and payroll processing.
Employer Tax Identification Number (EIN) A 9-digit state identification number, e.g., 12-3456789, assigned to each employer by the Internal Revenue Service (IRS). This number must be used on all documentation submitted to the agency. In some states, the EIN is the same as the Federal Employer Identification Number (FEIN).
Employer with Majority of Wages An unemployment insurance charging method, in which the employer that paid the largest amount of wages during the base period is charged for all benefits paid.
Enforcement The act of obtaining payment of a child support or medical support obligation.
ERISA The main purpose of the Employee Retirement Income Security Act (ERISA) is to ensure that employees receive the pension and other benefits promised by their employers. ERISA also incorporates and is tied to provisions of the Internal Revenue Code (IRC) that were enacted to encourage employers to provide retirement benefits to their employees.
Escheat The legal process followed to turn over unclaimed client funds (e.g., uncashed refund checks) to the state government. The state then attempts to contact the property holder to return their funds to them. ADP client checks are only relinquished to the state where the business is located.
ETT Employment Training Tax
EVS Employee Verification Service (EVS). The service will match your record of employee names and Social Security numbers (SSN) with SSAs records before you prepare and submit Forms W-2 (Wage and Tax Statements). Making sure names and SSNs entered on the W-2 match the Social Security Administrations records is important because unmatched records can result in additional processing costs for you and uncredited earnings for your employees. Uncredited earnings can affect future eligibility to (and amounts paid under) SSAs retirement, disability and survivors program. EVS can help eliminate this common reporting error. For more information click here.
Excludable Deductions Scheduled deductions that are subtracted from an employee’s gross pay before a lien deduction is calculated. Deductions that should be excluded vary by tax jurisdiction and lien type and must be indicated on the lien notification
Excludable Earnings Earnings that are subtracted from an employee’s gross pay before a lien deduction is calculated.
Exempt from Withholding An employee who claims free from withholding from Federal, state or local taxes. A person must meet certain income, tax liability, and dependency criteria. This does not exempt a person from other kinds of tax withholding, such as the Social Security tax.
Exempt Status Employee Employees with "exempt" status are exempt from the protections of the wage and hour laws of their state, or of the Federal government (Fair Labor Standards Act). Examples of "exempt" employees under Federal law are "executives," "professionals" and full-time students, as defined under the Fair Labor Standards Act. "Exempt" employees must always be paid on a salary basis, not subject to reduction based on the quality or quantity of work performed.
Experience A record of an employer's state unemployment insurance (SUI) account detailing charges, taxable wages and/or quarterly and other contributions. Experience is used to calculate the employer SUI tax rate.
Experience Rate The state unemployment insurance tax rate that is based on the amount of unemployment benefits paid out as a percent of total wages. The experience rate has been calculated to ensure that an employer has sufficient funds to cover future unemployment disbursements.
Experience Rating The calculation of an employer SUI tax rate, based on its ability to maintain a stable work force through a positive payroll history and minimizing benefit charges against its account. SIC codes are often utilized as a factor in the determination of an employer experience rate. (Also see: SUI,SIC)
Experience Rating Record The account maintained by the Agency on each employer and containing all the elements for the computation of the employer's tax rate.
Experience Tax Rate A method for determining the contribution rates of individual employers according to the factors specified in the State unemployment compensation code for measuring an employer's experience with respect to unemployment. After an employer has met the state's merit rating requirements an experience rate is assigned. Depending on the State, an employers eligibility for experience rating is based on the number of years it has been chargeable for unemployment benefits and/or liable for unemployment taxes. Most states will wait to assign the experience rate until the beginning of the next rate year; however, a few will assign a new rate as soon as the employer is eligible. (Also see: Benefit Ratio Formula, Benefit Wage Formula, Reserve Ratio Formula)
Extended Benefits (EB) The supplemental program that pays extended compensation during periods of specified high unemployment to individuals for weeks of unemployment after (1) they draw the maximum potential entitlement to regular compensation within their benefit year or (2) after their benefit year ends while they are in continued unemployment status and have insufficient wage credits to establish a new claim provided, however, that the extended benefit period in the State began prior to the end of their benefit year. Extended benefits paid to claimants under State unemployment compensation law are jointly financed on a 50-50 basis by State and Federal funds; extended benefits paid to UCFE are totally financed by Federal funds.
Extended Unemployment Compensation Account (EUCA) An account in the Unemployment Trust Fund from which the Federal portion of shareable extended benefits and Emergency Compensation authorized by the Congress are paid to State agencies.