Session 1: The Vertex Project - A Strategic Shift to Cloud Tax Processing

• Session 1: The Vertex Project - A Strategic Shift to Cloud Tax Processing
  • Overview
  • Why Retire PTQ?
  • Why PTX? What’s Changing?
  • Key Functional Changes
  • Customer Benefits
  • Preparing for the Transition
  • Key Takeaways

This session is also available as a PowerPoint presentation: The Vertex Project - A Strategic Shift to Cloud Tax Processing.

Overview

Payroll tax processing is entering a new era. For over three decades, CMiC relied on Vertex’s legacy on-premise engine, PTQ, to calculate payroll taxes. While it served its purpose, PTQ was built on outdated technology, required manual updates, and often struggled with complex multi-jurisdiction scenarios.

Vertex has now announced the retirement of PTQ by August 2026. Its successor, PTX, is a modern cloud-native engine powered by REST APIs and dynamic configuration. CMiC has already completed integration of PTX and delivered it in Patch 22, giving customers the opportunity to begin their transition now.

This article outlines what’s changing, why it matters, and how PTX will deliver a more accurate, secure, and scalable approach to payroll tax compliance.

Why Retire PTQ?

PTQ’s architecture revealed key limitations:

• Legacy Technology: Developed in C language and installed locally on each server, requiring manual monthly tax updates.

• Static Overrides (Quantum Array): Customers had to dictate tax rules via overrides, often leading to inaccuracies.

• Compliance Gaps: PTQ struggled in multi-state reciprocity situations, leaving customers exposed to compliance risk.

• High Maintenance: Setting up tax elements and tax-by-location rules required deep knowledge of compensation taxability and carried a high risk of error.

In short, PTQ’s tedious manual setup in CMiC, error-prone model could no longer keep pace with modern compliance requirements.

Why PTX? What’s Changing?

Vertex’s PTX is a complete rewrite:

• Cloud Native: No more local installations or manual patching. Updates are automatically pushed by Vertex, with a 15-day test window before production.

• Java-based with REST APIs: Faster, cleaner, and more scalable than the C-based PTQ.

• Dynamic Configuration: Vertex determines taxability using compensation and deduction IDs—removing the need for static tax elements or “Taxes by Location” setup.

• Improved Accuracy: PTX handles reciprocity rules, jurisdictional differences, and new legislation with far greater precision.

Customers using Patch 22 can now process payroll in both PTQ and PTX, allowing them to compare results and build confidence before fully migrating.

Key Functional Changes

1. Elimination of the Tax Elements Screen

   

   Payroll Tax Elements screen

   In PTQ, customers had to manually specify which benefits were taxable, state by state, in the Tax Elements screen. This approach was error-prone and time-consuming.

   PTX removes this step. Benefits are automatically classified using Compensation IDs, which map directly to Vertex’s taxability rules.

2. End of Taxes by Location

   

   Payroll Taxes by Location

   Previously, payroll teams had to manually assign every applicable federal, state, and local tax for each work location. Missing an assignment often meant payroll errors and costly adjustments.

   With PTX, taxes are auto-determined using Work and Residence GeoCodes. Customers simply provide where the employee lives and works, and Vertex handles the rest.

3. Compensation IDs & Deduction IDs

   

   Compensation IDs

   • Deduction IDs: Long used in CMiC, these codes tell Vertex how to treat deductions such as 401(k) or RRSP. PTX continues to support these.

   • Compensation IDs (new in PTX): Unique identifiers for earnings and benefits (e.g., bonuses, group term life, parking benefits). PTX uses these to determine taxability automatically—federal, state, or local.

   Result: No more manual overrides. Clean, accurate, and intelligent taxability logic.

4. Security & Compliance

   With PTX, data security is paramount:

   • OAuth 2.0 with Token-Based Authentication: Ensures only authorized users can connect.

   • Token Caching & Rate Limiting: Optimizes performance and protect against overuse.

     

   • Minimal Data Exposure: Only non-sensitive employee data (employee ID, GeoCodes, compensation/deduction info) is transmitted. No SSNs, banking data, or PII leave CMiC.

Customer Benefits

• Accuracy: Automated rules reduce errors and ensure compliance across jurisdictions.

• Speed: PTX delivers tax calculation results faster than PTQ’s legacy engine.

• Scalability: Cloud processing eliminates server bottlenecks.

• Reduced Technical Debt: No more manual patching or retroactive adjustments due to setup gaps.

• Future-Ready: Built to adapt quickly to legislative changes.

Preparing for the Transition

• Patch 22: Available now, includes dual PTQ/PTX processing for side-by-side testing.

• Patch 23 and Beyond: Expands PTX configuration capabilities, including deeper integration of Compensation IDs into CMiC’s Benefit Master.

• Licensing: Each enterprise customer will be issued a unique Vertex cloud credential (handled by CMiC IT/Accounting). Cloud customers share a secure tenant login managed by CMiC.

Key Takeaways

1. PTQ Retirement: Effective August 2026.

2. PTX is Live: Delivered in Patch 22, ready for testing.

3. Simplification: No more Tax Element or Taxes by Location setup.

4. Innovation: New Compensation IDs ensure accurate benefit taxation.

5. Security: Token-based authentication and minimal data exposure.