CAR Newsletter - December 2015

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Deadlines for December Payrolls

Holiday Upgrade

In planning your work for December, it is important to remember that the state holidays for Christmas this year are Thursday and Friday De. 24 and 25.  December biweekly payroll for state agencies (“B” or “C” biweekly schedules) will be paid on Friday Dec. 11 and Wednesday Dec. 23. December monthly payrolls will be paid on the last working day of the month, Thursday, Dec. 31. Additionally, those institutions of higher education on the “A” biweekly schedule will have the Friday Jan. 1, 2016 payroll scheduled to pay on Thursday, Dec. 31 due to Jan. 1 being an observed holiday.

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

“B” and “C” BIWEEKLY: The biweekly payroll for “B” and “C” biweekly schedule agencies will be Wed., Dec. 23.  Agencies should have these payrolls processed and paperwork forwarded to OMES by Wed., Dec. 16. 

MONTHLY: Monthly payrolls will be set to pay on Thurs., Dec. 31.  Agencies should have these payrolls processed and paperwork forwarded to OMES by Tues., Dec. 22.

“A” BIWEEKLY: The biweekly payroll for “A” biweekly institutions will be Thurs., Dec. 31.  Institutions should have these payrolls processed and paperwork forwarded to OMES by Tues., Dec. 22.


OMES Contact Information for Tax Year 2015 Reporting

Listed below is contact information for OMES personnel working on the IRS reporting project for tax year 2015. The fax number is 405-522-2186.

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New Affordable Care Act (ACA) Reporting Requirement beginning 2015

Pursuant to Internal Revenue Code Section 6056 of the Patient Protection and Affordable Care Act (“PPACA”), as a large employer, we are required to file an informational return with the IRS related to the offer of health coverage to employees. Additionally, we must provide employees with a statement that includes the information we will be providing in our IRS filing. This “Employee Statement” is the IRS Form 1095-C which includes information about the health insurance coverage offered to state employees, their spouse, and dependent(s).

For employees that have worked in multiple agencies during the year, only one 1095-C form will be produced. This combined 1095-C form will include information related to the employee across the multiple agencies. The agency on record as the Primary agency as of 12/31 will receive the 1095-C to distribute.

NOTE: Only employees eligible for an offer of health coverage or those in a stability period with an offer of coverage will receive a 1095-C form for 2015. Not all employees will receive a 1095-C form.

For questions related to ACA reporting, please contact Kristen Elsenbeck, Human Resources Coordinator – 405-521-3947;

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W-2, 1099 Pick-up Instructions

OMES will have W-2s, 1099s, and 1095s ready for release on Jan. 19, 2016.  Agencies may pick up the forms from our new location at 5005 N Lincoln Blvd. Suite 100 beginning at 10 a.m.  You may park in front of our building in the visitor parking which faces Lincoln Blvd. As you enter the building, ring the buzzer to the door at the right where you will be directed to the room where the forms will be distributed. If an express mail service or courier is to be used, please notify Beth Brox with the necessary information.  If the forms are not picked up by 3 p.m., Jan. 21, 2016, OMES will ship them at the agency’s expense.

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All W-2 forms will be printed from the PeopleSoft HCM System. The format for the W-2 forms will be the same as that used last year. Envelopes that fit the 2014 PeopleSoft W-2 forms should fit the 2015 W-2 forms. 

The format for the 1099 MISC forms is the same as last year.  The forms will have three sections with the top 1/3 and the middle 1/3 of the page containing the 2 copies of the form. The bottom 1/3 of the page will include instructions and a mailing address. To view the 1099 forms and envelope information, go to the 1099 express website. Click on View for 1099 Misc on blank letter size paper.  This is an example of the 1099 form and can be printed directly from there for measuring your envelopes. The vendor also specifies that either the standard No. 9 or No. 10 envelopes will work. 

Sample printed forms of the PeopleSoft W-2 and 1099 MISC can be provided if requested.

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Agency Address Verification

Please verify the correct agency address is being used in the HCM 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 Help Desk to have the agency’s address updated in the payroll system.

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State HCM System Use of Employee Addresses on W-2s

Please instruct employees to update their address if there has been a change during 2015.  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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PeopleSoft MailDrop for Year End W-2 Processing

PeopleSoft employee W-2s are processed and printed in Mail Drop order. Please ensure this field is properly used for employees. The W-2s will print in the same order as checks and advices sort, which is based on each agency’s needs.

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Refunds of Taxes for Overpayments to Employees (Form 94P)

Agencies need to review all outstanding employee overpayments and collect required amounts from employees. After collection, please submit OMES Form 94P as applicable. Agencies will be entitled to receive refunds for all forms submitted by Friday, Dec. 18 2015. After this date, refunds cannot be returned to the agencies; however, agencies are still required to submit the form after this date for employee wage corrections. Corrections due to overpayments will still be posted to the employee’s 2015 W-2 for requests submitted through Friday Jan. 8, 2016.

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Payroll – End of Calendar Year 2015

Dec. 18, 2015 – Last day refund of taxes due to overpayments can be returned to agencies (See above article).

Dec. 18, 2015 – Last day for state agency updates to employees' ACA Eligibility Page in order for the 1095-C forms to be correct. Changes to 2015 data after this date must be communicated to Kristin Elsenbeck, Human Resources Coordinator,, 405-521-3947, for accurate 2015 reporting.

Dec. 29, 2015 – Last day OMES will process payrolls for calendar year 2015. PeopleSoft payrolls must be delivered to OMES by 3 p.m. on this date.  Any payrolls received after this deadline may not process to pay timely. 

Dec. 30, 2015 – Backup withholding payments from agencies must be received by OMES (See article below).

Jan. 8, 2016 – Payroll warrant cancellations, OMES Form 94Ps, and earning adjustments for calendar year 2015 must be received at OMES by 5 p.m. on Jan. 8, 2016. Any 2015 payroll information received after Jan. 8, 2016, will require the agency to complete a corrected W-2. 

Feb 1, 2016 – Deadline for delivering forms to employees. With Jan. 31, 2016 falling on a Sunday, forms must be delivered no later than the next business day, Feb. 1.

Feb. 16, 2016 – Form W-4 with exemption expires (See article below).

Feb. 19, 2016– Last date to submit corrected forms (See article below).

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Backup Withholding

Agencies that have collected backup withholding on miscellaneous claims need to submit payment to be received by OMES prior to Dec. 30, 2015.  Please make interagency wires payable to the State Contribution Fund (Vendor 0000000467, ADDR # 002, LOC # 0002). After processing payment, please send detail of the payment to Lisa Raihl or Jean Hayes at OMES/DCAR 5005 N. Lincoln Blvd., Suite 100, Oklahoma City, OK 73105-3324.

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2016 Rates & Maximums

Year 2015 rates are provided for comparison purposes. In order to view the table click here.

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Correcting W-2s

Corrected W-2 forms must be delivered to OMES by Feb. 19, 2016.  Please send the original W-2, a copy of the corrected form, and a memo explaining why the correction is needed. If the correction is due to a statutory canceled warrant which is not to be replaced, please also send a letter asking that the warrant not be replaced. Note: Because a warrant has been canceled by statute is not a reason for such a W-2 correction.  If it was a valid payroll payment, the employee is still entitled to a replacement warrant; therefore, the W-2 reporting is proper.

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Correcting Other Forms (1099, 1095-C, etc.)

Other corrected forms such as 1099 series forms and 1095-C forms must be delivered to OMES by Feb. 19, 2016.  Please send the original form, a copy of the corrected form, and a memo explaining why the correction is needed.

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Federal Income Tax Withholding

IRS Publication 15 Circular E, Employer’s Tax Guide, states that any federal income tax withholding must be based on marital status and withholding allowances. Withholding cannot be based solely on a fixed dollar amount or percentage. In addition to the amount calculated on marital status and withholding allowances, an employee may specify a dollar amount to be withheld. The employee must submit a valid Form W-4 stating his or her marital status, number of allowances, and any additional withholding requested. 

Exemption from federal income tax withholding is generally claimed when an employee had no income tax liability in the prior year and expects none for the current year. Exempt W-4s are valid for one calendar year and a new W-4 must be submitted by Feb. 16, 2016 to continue exempt status. If a new W-4 is not received, withholding is based on single status with zero allowances or the last valid W-4 the agency has for the employee. To claim exempt status, the employee completes only boxes 1, 2, 3, 4, and 7 and signs the form. If an exempt W-4 has a number on line 5 (allowances) or an amount on line 6 (additional amount), you may treat the form as invalid and ask for another one. If a new W-4 is not received, withholding is based on single with zero allowances or the last valid W-4 the agency has for the employee.

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Employee’s Withholding Allowance Certificate (W-4)

An employee who certified to his or her employer on Form W-4 (Employee’s Withholding Allowance Certificate) that the employee had no income tax liability for 2014 and anticipated no income tax liability for 2015 was entitled to an exemption from withholding for 2015. This exemption expires on Feb. 16, 2016, and must be renewed if conditions remain the same. If you receive an exempt W-4 after Feb. 16, 2016, do not process a tax refund to the employee or submit a request to OMES. They will not be processed.  If you receive an exempt W-4 after Feb. 16, 2016, the W-4 will take effect on the next pay cycle; per IRS regulations it is not retroactive to the beginning of the year. 

If you have received correspondence from the IRS specifying the maximum number of withholding allowances permitted (commonly referred to as a “lock-in-letter”) and the employee submits a new W-4 claiming more allowances than the maximum allowed, you must disregard this new W-4 until the IRS notifies you to withhold tax based on the new W-4. However, the employee may furnish a new W-4 that claims fewer allowances than the maximum allowed and the employer must withhold tax based on that Form W-4. 

In addition, the loss of an exemption that affects withholding at the beginning of the next taxable year, such as a divorce or the loss of a dependent should be reflected by an amended certificate on or before Dec. 1. If the change occurs in December, the new certificate must be furnished within 10 days of the day on which the change occurs.

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Employee Overpayments Collected After Year End

With the calendar year end approaching, the collection of any outstanding overpayments is especially important and must be conveyed to employees who owe any monies back to the agency if they want to repay only the net amount.  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 addition, employees who do not reimburse the overpayment in the current year are subject to taxes on the overpaid amount and later, in the year the overpayment is reimbursed, the employee may be entitled to take a deduction or credit on their current year tax form.  This may not be advantageous to the employee, and they should seek advice from their tax accountant.

For example, John Deere was overpaid in September 2015 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.  If John reimburses the overpayment before the end of the year (by personal check, miscellaneous deduction, or other reduction), he would pay $743.50 and his W-2 will correctly reflect his pay reduced by the reimbursement.  If he reimburses the agency after year-end, he must pay $1,000, and his 2015 W-2 would include the $1,000 overpayment in taxable wages.  In 2016 he may be entitled to take a deduction or credit on his personal tax return for the reimbursement, which may not be beneficial to him. 

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 during the same calendar year) 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 during the same calendar year) 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. 

For amounts paid back in subsequent years, the applicable W-2, Corrected W-2, or W-2C for the year of the overpayment 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 taxable for federal and state purposes.  Federal and state taxable wages or income taxes withheld will not be changed. 

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Taxable Fringe Benefits

As we approach the end of the calendar year, be reminded that the payroll systems have 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 allowances
  • Additional non-cash benefits 

Reporting of these, and other, benefits is required by state and federal law, and it is the responsibility of the individual agency to ensure compliance. All taxable benefits can and should be run through the payroll system.  In exception cases, where taxable benefits cannot be run through the payroll system, any taxes associated with the exception item 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. Again, these items can and should be reported through the payroll system. 

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/HCM rules to determine whether these payments are a valid pay plan for a particular agency.

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2015 – 1099 Report

The 1099 Report is available for agencies to run in the PeopleSoft Financials system any time. The path for this report is:  Accounts Payable/Reports/Payments/Misc Tax Information Report.  Make sure the dates include the whole year.  This report will reflect the 1099 data from PeopleSoft vouchers. Be advised that any vendor with a 1099 Flag of “N” on the report will Not receive a 1099 unless they are paid using a medical or legal account code.  The final report should be processed by agencies no later than Jan. 4, 2016, or possibly prior to Dec. 31, 2015 if the agency will not be making any more 1099 reportable payments. All corrections must be returned to Beth Brox at OMES by Jan. 8, 2016.

The 1099-MISC forms require an agency phone number to be printed on the form. The program will search our agency database and insert the phone number for the finance officer of the agency. If any phone number changes need to be made, please notify Beth Brox by phone at (405) 522-1099 or by e-mail at no later than Jan. 8, 2016.

1099 File Format – Outside Agencies

Any agency needing to submit an additional file for 1099M reporting should use the format listed in the link below. Instructions are provided in a separate link as well as 1099M reportable object codes. Due to the sensitive nature of the data, please hand-deliver a CD in the file format to OMES, 5005 N. Lincoln Blvd., Suite 100 or you may send your file by a password protected email to .  During December, it is recommended that these agencies submit a test file to have a Name and TIN Match done with the IRS. Final information is due Jan. 8, 2016.

The file instructions and format can be found on the CAR forms page of the OMES website:

  • 1099 Detail File Format – Outside Agencies
  • 1099 Outside Agency Cross-Reference
  • 1099 Instructions – Detail File Format

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

OMES HCM is working hard to keep you informed on updates as they are developing new processes to accommodate the provisions of the ACA. Your continued attention to this matter is appreciated.

All employees and data on the ACA Eligibility Page must be up to date and accurate so that year-end processing and reporting can begin. To ensure we are reporting correct data to the IRS, here are a few reminders to help ensure that your agency is in compliance with the ACA:

  • Agencies should have already run the ACA Eligibility Hours report to determine if variable hour employees employed from 10/16/2014 through 10/15/2015 are eligible for benefits in 2016.  Any employees that were tested on this report and do not have the ACA FT/Eligible box checked will need a new row on the ACA Eligibility Page effective 1/1/2016.
  • 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. 
  • Agencies 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.
  • Agencies should be ensuring that ACA reporting is accurate by running the following queries on a regular basis:


If you have any questions, please contact OMES Human Capital Management at or Kristin Elsenbeck, Human Resources Coordinator,, 405-521-3947.

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There are no accounting updates this month.

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Volume 26, Number 6
Fiscal Year-2016
December 9, 2015

Holly Berry

In This Issue ...


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):

  • Jan. 19 – Speaker: Andrew Messer, Office of the State Treasurer
  • 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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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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State Comptroller:
Lynne Bajema, CPA

Deputy State Comptroller:
Steve Funck, CPA

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

Holly Berry

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