DCAR Newsletter's New Look!!
Welcome to the new DCAR Newsletter!! Please take a moment to enjoy our fresh new view!! We hope that this change is more appealing for you our viewers as well as more user-friendly with the use of the various links that have been inserted throughout the newsletter. If you are having any problems viewing the newsletter, you can choose to view it in your browser as well, or you may contact Stephanie Langs @ stephanie.langs@omes.ok.gov for further assistance.
Top Story
The Oklahoma Financial Managers Association is planning its next quarterly meeting. Seminars are provided free of charge. To ensure an adequate number of training materials and refreshments are available, please register at: www.okfma.com
The conference will be held from 1:30 - 4 p.m. July 25, 2013, at the Business Conference Center Auditorium of the MetroTech Springlake Campus. The physical address is 1900 Springlake Drive, Oklahoma City, OK 73111.
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PAYROLL
Now that the first two quarters of the 2011 tax year are complete, it is time for ALL agencies to run the Miscellaneous 1099 Tax Information Report which will include all transactions from January 1, 2013, through June 30, 2013. The path for this report in PeopleSoft Financials is: Accounts Payable>Reports> Payments> Misc Tax Information Report. With this report please review the following:
- The Name and Tax ID number (TIN) must match the information on the vendor’s W-9, which designates the way the vendor reports their taxes to the state and IRS.
- Pay attention to the 1099 Flag: Y means the vendor should receive a 1099, and N means the vendor should not receive a 1099. A vendor does not need a 1099 if it is registered as a corporation, non-profit or government entity (the exception to this is when the payment is for a legal or medical payment).
- Please note that address 1 in the vendor file is the designated address for 1099 reporting. If the 1099 Flag is N, any new addresses provided will be added to the end of the list, but Address 1 will not change.
- Review all warrants processed for each vendor to ensure that all are accounted for the proper vendor and correct amount. (All warrant corrections need to be made at the agency level.)
Please send any corrections on this report to the Office of Management & Enterprise Services (OMES) by Friday, July 26, 2013. If you have any questions contact Beth Brox at (405) 522-1099 or by e-mail at Beth.Brox@omes.ok.gov.
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The OMES Form PWC should only be used when an employee is not entitled, in part or whole, to the funds. All PWC forms received by OMES will begin the process to retrieve the funds, if direct deposit, and cancel the warrant in the payroll system. It is imperative that agencies identify payroll errors and process the Form PWC immediately upon discovery.
Paper Warrant Cancellations:
The original warrant must be marked “Void”, attached to the completed PWC form, and then sent to OMES Transaction Processing. These requests cannot be processed by fax.
Direct Deposit Cancellations:
Fax OMES Form PWC (06/13) to (405) 521-3902. Verify the fax was successful. After faxing the request to OMES, mail the original PWC to OMES Transaction Processing.
Requests for cancellation of direct deposits must be made by completing the PWC form and faxing it to OMES to initiate the cancellation procedures. To ensure that direct deposit funds are returned, the PWC request must be received by 12 noon three business days prior to the effective pay date. Any faxed request for cancellation of direct deposits after that cutoff will be subject to recall or reversal procedures which are subject to denial by the employee’s bank.
Once the funds have been returned to the State, OMES will process a cancellation in the payroll system which returns the funds to the agency. If the funds cannot be recovered from the bank, the agency will be notified and must follow the existing overpayment procedures.
PWC forms received for direct deposit items that are more than business five days past the effective date will no longer be processed in accordance with NACHA rules. Please see the article "EFT Stop Payments, Reversals and Reclaims" published from the Treasurer’s Office.
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All payroll costs are required to be included in the payroll claim; this includes all employer paid benefits such as retirement, health, dental, vision, etc. Earnings and deduction codes are set up in the system to allow for the proper reporting and the transfer of information correctly to the general ledger. If an agency has payroll costs that are currently not going through payroll, please contact the OMES HelpDesk. A case will be created and the CORE Payroll Team will be assigned to help set up the items so that they are included in future payroll claims.
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Agencies have started receiving a new report generated from the Office of the State Treasurer’s (OST) current ACH application. OST’s current ACH application automatically updates bank routing numbers based on the latest table of Federal Reserve Bank routing numbers. This update allows the items to continue processing for payment. When an update is made, a report is generated listing the employee, the incorrect bank routing number and the correct bank routing number. This report will be distributed to agencies to update employee banking information. This report will be sent out by OMES to the contact listed for the Updated Banking Information report that is currently distributed. These updates must be made now so these transactions will continue to process without interruption after migration to the new application.
If banking information is not updated before OST goes live with the new application, items with invalid routing numbers will be rejected and not processed to pay. The new application will validate the submitted information against the latest Federal Reserve Bank routing numbers table and will reject the transaction if the bank routing number is determined to be invalid. If an item is rejected, it will not leave OST to be paid and additional processing by the agency will be required to pay the employee(s). Again, it is imperative that these updates be made now so transactions will continue to process without interruption after migration to the new application.
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IRS Form W-4, Employee's Withholding Allowance Certificate, requires the Home address (number and street or rural route) be provided. When the employee signs under penalties of perjury, they are verifying all elements on the form are correct. If the employee wishes to provide an additional address for mailing purposes, agencies can collect the information on an internal employee information sheet.
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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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Beginning in 2012, the IRS mandated Box 12 reporting for the cost of employer-provided health coverage. The W-2 must show the amount in Box 12 with Code DD.
To correctly report the cost of health coverage, all payments made for health insurance must process through the payroll system. Failure to process through payroll will result in incorrect reporting on the W-2. For help establishing the appropriate deduction codes, state agencies should contact the OMES HelpDesk. Assistance will be provided by the Core HCM Payroll team. For institutions of education, please ensure payroll file information contains the total cost of health insurance (employer and employee share).
As a reminder, this reporting to employees is for their information only. The amount reported is not taxable and is only intended to inform them of the cost of their health care coverage.
For questions or more information, please contact Lisa Raihl at (405) 521-3258 or lisa.raihl@omes.ok.gov, or Jean Hayes at (405) 522-6300 or jean.hayes@omes.ok.gov.
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Giving gifts to employees is restricted and should only be given as part of a formal employee recognition program. See Oklahoma Statutes, Title 74, Sections 4121 and 4122. Furthermore, any gift cards, certificates, and coupons given to employees are to be included in the employee’s taxable income. These items are considered by the Internal Revenue Service to be cash or a cash equivalent and do not meet the requirements to be excludable as a de minimis fringe benefit.
Even when an employer provides gift cards, certificates, or coupons to purchase a turkey, ham, or other nominal value property, these are considered wages and are subject to income and employment taxes. This is true even when the card restricts the items purchased, the time to use the coupon, and any unused portion is forfeited. Cash equivalents do not meet the de minimis fringe benefit requirements.
PeopleSoft State Agencies: Process the gift card amount using the TRC Code of “GIFT,” which will show as earnings code “GFT.” The amount will be included as taxable income and will be taxed on the paycheck.
Higher Education Interface Agencies: Process the gift card amount using earnings code “GFT”. The amount will be included as taxable income and will be taxed on the paycheck.
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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 OMES 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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ACCOUNTING
In anticipation of changes OST will make to send payment files to the bank earlier in the day after migrating to the Bottomline WebSeries application, OMES will begin running the pay cycle for state agencies in the morning starting on Aug. 1, 2013. The Rush pay cycle, currently run at 4 p.m., will run at 3:30 p.m. The Alternate Agency and 7XX pay cycle will continue to run at 1:30 and 2 p.m.
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Pursuant to the National ACH Association (NACHA) Operating Rules the State Treasurer’s Office will not process a reversal on an ACH/EFT item that is more than five business days past the effective date. Furthermore, reclamations of benefit payments (pensions, annuities, etc) will only be processed if initiated within five business days of the notification of death. Stop payments on EFT items will still function as they have in the past. Items will be stopped if the request is received more than two business days prior to the effective date of the entry. If agencies encounter erroneous entries more than five business days past the effective date please contact OST for consultation on options for recovering the funds.
For questions related to this notice or other ACH processing inquiries please contact Diedra O’Neil at Diedra.oneil@treasurer.ok.gov or (405) 522-4256.
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