CAR Newsletter - October 2015

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Deadlines for November Payrolls

Don't Forget

In planning your work for November, it is important to remember that Veterans Day is Wednesday, Nov. 11.  Thanksgiving is recognized on Thursday, Nov. 26, and Friday, Nov. 27 is also a state holiday.  November biweekly payroll for state agencies (“B” or “C” biweekly schedules) will be paid on Friday Nov. 13 and Wednesday Nov. 25. November monthly payrolls will be paid on the last working day of the month, Monday, Nov. 30.

With these dates in mind, agency staff should plan their work accordingly for the deadlines: 

SUPPLEMENTAL:  PeopleSoft supplemental payrolls will be set to pay on Thursday Nov. 12.  Agencies should have these payrolls processed and paperwork forwarded to OMES by Wed., Nov. 4. 

BIWEEKLY:  “B” and “C” biweekly payrolls are scheduled to pay on Fri., Nov. 13.  Agencies should have these payrolls processed and paperwork forwarded to OMES by Thurs., Nov. 5.  The next biweekly for “B” and “C” biweekly schedule agencies will be Wed. Nov. 25.  Agencies should have these payrolls processed and paperwork forwarded to OMES by Wed., Nov. 18. 

MONTHLY: Monthly payrolls will be set to pay on Mon. Nov. 30.  Agencies should have these payrolls processed and paperwork forwarded to OMES by Thurs., Nov. 19.


Review 1099 Reportable Transactions Report

Each agency should review their 1099 reportable transactions for the first three quarters of the calendar year 2015. Agencies should run and print the 1099 Transaction Report in the PeopleSoft system. The report path is:
Accounts Payable --> Reports --> Payments --> Misc. Tax Information Report
Specify your agency number and select the date range as 01/01/2015 through 09/30/2016. 

As you review this report, pay particular attention to the IRS Name, TIN, 1099 Address, and the 1099 Flag.  All vendors that need to receive a 1099 should have a ‘Y’ in the 1099 Flag column. If that field shows an ‘N’ and the vendor needs a 1099 please indicate the change with your corrections. If a 1099 Flag is 'N,' there is no need to submit a change of address since the vendor will not receive a 1099.  If 'Y' please verify the 1099 address.  Return the report and all available W-9s to document your changes (even if it is only an address change) to the Office of Management and Enterprise Services on or before Friday, Oct. 30, 2015.   Your timely review and response to this report will allow us to update the vendor file in order to have the best information possible for the final report which will need to be reviewed the first week of January 2016.

The preferred way of submitting any corrections to our office is to print the report and write the corrections on the report using a color of ink other than black.  Please send comments and corrections by mail or interagency mail, or if there are just a few corrections, they may be sent via e-mail to or by fax to 405-522-2186.  Any other questions or comments regarding this matter should be directed to Beth Brox at 405-522-1099.

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October Biweekly Benefit Allowance and Benefit Deductions Reminder

House Bill 1107, of the 1st Session of the 54th Legislature, 2013, mandated the payment of the flexible benefit allowance for employees on biweekly payroll to be credited annually over 24 pay periods and the benefit deductions to occur over the same 24 pay periods.

Beginning with the first paycheck of 2015, employees on biweekly payroll with a benefit allowance and benefit deductions were transitioned to a 24 period benefits plan.  This only affected state agencies; institutions of Higher Education were not affected.  This only affected state agency employees paid on a biweekly basis (26 pay periods).

As a reminder, two months during the year there will be a third paycheck with no benefit allowance and no benefit deductions. The third paycheck in these ‘three-payday months’ may be larger or smaller than the previous two checks that month. Employees may also see a difference in the amount of taxes withheld for Social Security, Medicare, or federal and state withholding thereby increasing or decreasing the amount of net pay.

October is the second ‘three-payday month’ for 2015.  The third check to pay on October 30, 2015, will not have the benefit allowance and will not have any benefit deductions. Benefit deductions only include deductions for health, vision, dental, life options, disability, health savings accounts and flexible spending accounts (health care and dependent care). Other deductions such as retirement, garnishments, child support, taxes or voluntary payroll deductions (i.e.: banks, employee associations, college savings plan) will be withheld as required on the third check.

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OPERS – New Defined Contribution Plan

HB 2630 of the 2nd Session of the 54th Legislature 2014 directed OPERS to establish a tax-qualified defined contribution retirement system for those members who join the system on or after November 1, 2015, including statewide elected officials and legislators. House Bill 1376 of the 1st Session of the 55th Legislature 2015 further clarifies and defines aspects of the new Defined Contribution (DC) plan set forth in HB 2630.  To meet this requirement, new plans have been set up in the HCM system for employee enrollment. The OPERS Retirement Coordinator training will have pertinent information on the implementation of this new defined contribution plan, please see the training section of this newsletter for date and times. For additional information on the new defined contribution plan, please go to:

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Taxable Fringe Benefits

As we approach the end of the calendar year, be reminded that the payroll system has been structured to accommodate the reporting of non-cash, taxable fringe benefits. Of specific concern to state employees, the following benefits should be reviewed to determine if W-2 wage adjustments are necessary:

    Group Term Life Insurance

    Employee Use of State Vehicles

    Maintenance, Car and Housing


    Additional non-cash benefits

Reporting of these benefits is required by state and federal law, and it is the responsibility of the individual agency to ensure compliance. If the item is not run through the payroll system in the current year, the employer can deduct the taxes associated with the wage item on a following paycheck in the next year, as a miscellaneous deduction.  The state is responsible for timely depositing the taxes. Any taxes associated with items not run through the payroll system will need to be sent to OMES in a timely manner so the tax deposits can be made and the items posted to the employee’s earnings record.

Under IRS rules, an employer can choose to pay the employee’s share of taxes on group term life, auto fringe, and other non-cash benefits. If the employer pays these taxes without deducting them from the individual, those taxes must be included as wages for federal, state, social security and Medicare wages (boxes 1, 3, 5, and 16). This increase in the employee’s wages is also subject to employee social security and Medicare taxes. This again increases the amount of additional taxes the employer must pay.

Example: Tom received a non-cash benefit valued at $100.00. The agency decides to pay the employee’s taxes on all non-cash benefits. The employee’s taxes would be $7.65 [(100 * 6.2%) + (100 * 1.45%)]. This amount that the employer is paying for the employee is another benefit to the employee and must be taxed [(7.65 * 6.2%) + (7.65 * 1.45%)] = $0.58. This additional $0.58 is again taxable to the employee [(0.58 * 6.2%) + (0.58 * 1.45%)] = $0.05. Total taxes to the employee are $8.28, for total wages of $108.28. An easier way to calculate, is to “gross up” the benefit. The benefit amount is divided by 92.35% (100% - 6.2% - 1.45%) and the outcome is the gross wages to report. From this amount, the social security and Medicare taxes are calculated. 100.00/92.35% = $108.28 (the taxable wage amount). [(108.28 * 6.2%) + (105.28 * 1.45%)] = $8.28 (taxes).

Under IRS rules, an employer can also choose to pay the retiree’s share of taxes on group term life insurance or collect them from the retiree. If the agency pays these taxes without deducting them from the individual, those taxes must be included as wages for federal, state, social security, and Medicare wages (boxes 1, 3, 5, and 16). The calculation is the same as the above example. If federal and state withholdings are required, this must also be taken into consideration for the calculations. Please refer to the W-2 instructions and Publication 15A, Employer’s Supplemental Tax Guide for additional information if needed. Also, please refer to OMES Human Capital Management Division rules to determine whether these payments are a valid pay plan for a particular agency.

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Employee Overpayments Collected After Year End

Employee overpayments that are collected in the next calendar year are to be repaid at the gross overpayment amount in accordance with Internal Revenue Service regulations. If an employee owes the agency, please be certain to let the employee know if the amount is not paid in full by Dec. 31, 2015, the amount they owe will increase to the gross amount.

In accordance with 74 O.S. § 840-2.19, the agency must send a notice to the employee within 10 days of identifying an overpayment.  The employee then has 30 days to respond to this notification.  Employees have several options for repaying overpaid payroll amounts:

  • reduction of annual leave (for the gross overpaid),
  • reduction of current gross salary (for the gross overpaid) in a lump sum or installments over a term not to exceed the term in which the overpayment(s) occurred,
  • lump-sum cash repayment,
  • miscellaneous payroll deduction (for the net overpaid) in a lump sum or installments over a term not to exceed the term in which the overpayment(s) occurred,
  • any combination of the above options.

With the calendar year end so close, the collection of any outstanding overpayments is especially important and must be conveyed to employees who owe any monies back to the agency. When an overpayment is paid back in a subsequent year, IRS rules state that the employee must pay back at the gross amount because they had use of the funds in the prior year and as such, they are taxable to that year. Additionally, federal and state wages and taxes cannot be reduced for prior years when repayments are done after the end of that calendar year.

For example, John Doe was overpaid in September by $1,000.00 regular wages. This was discovered in October and the agency calculated what the correct payroll should have been. The net check difference is $743.50; the amount the employee owes the agency if paying back by personal check or miscellaneous deduction in the current year. If the employee does not pay this net amount back by Dec. 31, 2015, the employee owes the agency the full $1,000.00 gross overpayment.

The applicable W-2, Corrected W-2, or W-2C will only reflect a change in the Social Security and Medicare wages and taxes. Since the employee received and had use of the funds during the year of overpayment, the amount is still taxable for federal and state purposes. The W-2 form will not correct Federal or State taxable wages or income taxes. The employee may be entitled to either a deduction or credit on their current year Form 1040, please advise the employee to speak to their tax accountant.

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Reduction of Annual Leave Hours for Overpayments

When an employee chooses to pay back an overpayment using annual leave, the amount of annual leave reduced should equal the gross amount of overpayment. In the past there have been instances where agencies have incorrectly reduced the annual leave by the net amount of the overpayment.

If an employee pays back an overpayment using terminal leave, an OSF Form 94P must be submitted to correct the retirement amounts reported on the check which included the overpayment. Terminal leave is not included in retirement wage calculations; therefore, a payroll earnings adjustment is required.

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State HCM System Use of Addresses on W-2s

As a reminder, in the PeopleSoft HCM system, the W-2 process loads the employee’s mailing address for IRS Form W-2 reporting.  If there is no value in the mailing address field, then the employee’s home address will be used on the W-2.  If there is a value in the mailing address field that is not to be used on the Form W-2, it will need to be updated or inactivated.

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Agency Address Verification

Please verify the correct agency address is being used on the payroll system. The agency address can be found on the Employee’s Earnings Statement. If the address is not correct for the agency, this will need to be corrected before year end processing of tax forms. Please contact the OMES Service Desk at (405) 521-2444 to have the agency’s address updated in the payroll system.

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Use of EmplID in Place of Social Security Number

When submitting employee payroll corrections (94P, Form 3, adjustment memo, etc.), please use the employee’s State EmplID along with the employee’s name. To protect the privacy of employees, use of social security numbers is no longer required unless specifically asked for on a form.

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Project Website Updated

Information continues to be added to the higher education separation project website.  All webinars through September 16th and the notes have been added along with documents discussed during the sessions. All information that has been published can be found in one area on the OMES CIO website.

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Higher Education Notification Subscription Topic Reminder

OMES created subscription topic designated specifically for the higher education separation project. To receive updates, click Subscription Update to subscribe to the topic Higher Education Payroll Processing & Reporting.  Once on the subscription page, select Subscription Type "Email", enter your email address and click the "Submit" button.  At the top of the subscription page, select the "Higher Education Payroll Processing and Reporting" topic. Other topics are available and can be subscribed to as desired. When finished, select “Submit” at the bottom of the page and your preferences will be saved.

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Project Testing Coming Soon

OMES programming is coming along and soon institutions will be able to start testing. User testing is projected to being on Monday October 26th and run through Wednesday November 25th.

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OPERS Defined Contribution Plan – new account codes

To facilitate reporting of the OPERS new defined contribution plan, new account codes have been created and added to the object of expenditure codes list as follows:


Payments for the state’s match under the Defined Contribution Plan.  This will also include the administration fee to the Oklahoma Public Employee’s Retirement System for administering the program.


Payments for deposit to the Oklahoma Public Employee’s Retirement System for employer retirement savings made pursuant to the Retirement Freedom Act (74 O.S. § 935.10).

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Audit Report Deadline – Pensions/Component Units/College & Universities

Now that business has closed for Fiscal Year 2015, all pension trusts and component units (with a fiscal year of June 30) should be working with their auditors to complete financial statements. The deadline for submitting these, and any necessary Financial Reporting packages, to the OMES Financial Reporting Unit is Oct. 31. Failure to complete these statements in a timely manner jeopardizes the state’s ability to complete the audit of the CAFR in time to meet disclosure requirements set forth by bond issuers and the GFOA. A potential risk of missing the deadline includes a downgraded bond rating for the state.  All component units are expected to ensure their auditors are aware of the deadline and complete their final reports in time for you to provide it to OMES no later than Oct. 31.

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Affordable Care Act (ACA) reminders from Human Capital Management (HCM)

The ACA has been in full swing, effective Jan. 1, 2015.  OMES HCM is working hard to keep you informed on updates as they are developing new processes to accommodate the provisions of ACA.  A refresher on the ACA was provided during the Benefit Coordinator Training. If you have any questions about the ACA or the ACA Eligibility page in PeopleSoft, please submit to and an HR representative will contact you.

Each October, agencies must run the Annual ACA Eligibility report which contains a listing of the current employees measured during the 12-month look back period.  The report is available within PeopleSoft HCM at OK Custom Reports/OK Reports/HR/ACA Eligibility Hrs Rpt (0666) and should be run after all October 2015 payrolls are confirmed.

Here are a few reminders to help ensure that your agency is in compliance with the ACA:

  • All current employees should have an initial 1/1/2015 effective dated row, or a row effective their hire date if hired after 1/1/2015.  You can run the GO_HR_ACA_HIRE_NO_ACA_STATUS query to ensure your compliance.
  • You should be running the ACA Monthly Hours Report 0668 each month to determine eligibility for variable hour employees.  Variable hour employees will then need an updated ACA Eligibility row.
  • Employees who have terminated since 1/1/2015 should have a Termination row on the ACA Eligibility page.  The effective date should be the same effective date reflected on Job Data.  You can run the GO_HR_ACA_TERMS_NO_ACA_STATUS query to ensure your compliance.
  • Any employee that terminated or who has not received pay prior to 1/1/2015 should be terminated in Job Data with the appropriate retroactive effective date.  You can run the GO_PY_NOT_PAID_SINCE_PROMT query using the 1/1/2015 prompt date to ensure your compliance. (NOTE: There may be extenuating circumstances for an unpaid employee to remain on payroll, such as an employee who is on workers compensation TTD.  If your agency has an employee who will remain active in an unpaid status, you must enter a row to reflect their current ACA Status on the ACA Eligibility page.  It would be advisable to utilize the “Remarks” field.)
  • To determine that you have accurate data for your employees, run the GO_HR_ACA_EMPL_LIST to view the current ACA status for all employees.

Please review the attached information regarding the Affordable Care Act that was presented at the 2015 Benefit Coordinator training. Contact information is available within the document if HCM can be of additional assistance.  HCM has created an ACA page that can be found here contains helpful information and resources.


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Volume 26, Number 4
Fiscal Year-2016
October 13, 2015

In This Issue ...


2015 OPERS Retirement Coordinator Training

The 2015 OPERS Retirement Coordinator training is coming soon! This year, we encourage all state agency employers to attend either the morning or afternoon session in Oklahoma City on October 16th. These training sessions are offered annually to provide you with new information, important updates, and time to ask questions. This year the primary topic will be the implementation of the new defined contribution plan. To attend, you will need to register. For more information and to register, visit the website.

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AGA Luncheons for 2015-2016

The Oklahoma City Chapter of the AGA holds CPE luncheons most months between September and April as well as two all-day CPE events.  The luncheons are held in the Burk Burnett Board Room at the Oklahoma Cowboy and Western Heritage Museum on NE 63rd Street between Kelly and Martin Luther King Boulevard.  The luncheons begin at 11:30 a.m. and end at 1 p.m.  Cost is $15 for AGA Oklahoma City Chapter members and $20 for non-members.  The luncheons are recommended for one hour of CPE.  Mark your calendar for these upcoming luncheons (no RSVP necessary):

  • Wednesday, Oct. 21 - State Auditor Gary Jones will speak about Performance Audits
  • Jan. 19 – speaker and topic to be decided
  • Feb. 17 – speaker and topic to be decided
  • March 16 – speaker and topic to be decided
  • April 27 – speaker and topic to be decided

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APA Preparing for Year End and 2016

Preparing for Year-End and 2016 brings you up to date on the latest changes in legislation and regulations that affect the close of 2015 and the beginning of 2016. Year-end processing tips, fringe benefit taxation and reporting, implementing new tax laws and regulations. Good for payroll, human resources, systems, accounting and finance professionals responsible for payroll operations and involved in year-end processing.

Friday, Oct. 30, 2015
Presented by American Payroll Association
Renaissance Tulsa Hotel & Convention Center
6808 S. 107th East Ave.
Tulsa, OK  74133

For more information, please visit:  APA website

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The Complete Guide to Payroll Taxes and 1099 Issues

Hosted by the Oklahoma Society of CPAs
Presented by Surgent McCoy, CPE LLC
Monday, Nov. 16, 2015 in Oklahoma City

Topics include payroll tax requirements for wages, employee benefits, and reimbursements, fringe benefit and special issues, gross-up calculations, tax deposits, and complying with reporting requirements. Additional information can be found on their website.

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AGA Fall Seminar

The Oklahoma City Chapter of AGA will be hosting a fall seminar on Wednesday, Nov. 18th in the Burk Burnett Board Room at the National Cowboy and Western Heritage Museum on Northeast 63rd Street between Kelly and Martin Luther King Boulevard.  Cost is $125 if reserved and paid by Oct. 30 and $150 after Oct. 30.  The training is recommended for 8 hours CPE. Registration starts at 7:30 a.m. and the first session begins at 8:10.  The day ends at 5:00.  Lunch is provided.  Speakers and topics:

  • Mike Hyde from the Arkansas Lottery – Fraud
  • Kaki Roberts from AGA – Hiring the Right People
  • Nico Gomez, CEO of the Oklahoma Healthcare Authority - Healthcare in Oklahoma
  • Frank Crawford from Crawford and Associates
    – Single Audit
    – GASB Update
    – Pension Update
  • Randy Ross, Executive Director of the Oklahoma Accountancy Board - Ethics

Space is limited.  To register contact Riley Shaull at 405-557-7210 or

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Payroll 101: Foundations of Payroll Certificate Program

Offered by the American Payroll Association
San Antonio, Texas or Las Vegas, NV
Classes are held several times throughout the year at both locations.

The class is designed to help employees understand the procedures and processes in all aspects of payroll to include new employee forms, calculating pay, withholding and paying taxes, and preparing tax returns. The classes can be found on the APA website.

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Payroll 201: Payroll Administration Certificate Program

Offered by the American Payroll Association
San Antonio, Texas or Las Vegas, NV

Classes are held several times throughout the year at both locations.

The class is designed for employees who have the fundamentals of payroll and wish to improve job performance and gain more knowledge. The class gets more in-depth in all aspects of payroll to FLSA, taxable fringe benefits, paying non-resident and resident aliens, corrections to Form W-2 and 941. The classes can be found on the APA website.

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Jennie Pratt, CPA, CGFM

General Ledger:
Dan Thomason, CPA

Lisa Raihl, CPA

Transaction Processing:
Steve Wilson

Payroll Processing:
Elsa Kunnel

AP Manager:
Patricia Garcia, CPA, CGFM

ISD Finance:
Cathy Menefee, CPA, CGFM

Vendor Maintenance:
Victoria Baker

OMES Service Desk:
(PeopleSoft questions)

Financial Reporting Unit:
Matt Clarkson, CPA

Steven Hawkins, CGFM

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