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Mileage Reimbursement Rate Decreases for 2014
The Internal Revenue Service has announced a decrease in the mileage reimbursement rate, effective Jan. 1, 2014, to $0.56 per mile. This is a decrease from the $0.565 rate for 2013. (See Internal Revenue Procedure IR-2013-95, dated Dec. 6, 2013.) The new rate is for travel incurred on and after Jan. 1, 2014, not your 2013 travel reimbursement claim vouchers submitted after Jan. 1.
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PAYROLL
All Agency Payroll Coordinators/Payroll Enrollment Specialists should have received details on the Payroll Card Transition from Money Network to Chase Bank. All payroll card recipients should be enrolled by the end of December. Additional detailed fee information and procedures for enrolling employees for the Chase Payroll Card are available at www.treasurer.ok.gov. If you have not been contacted, please call Carole Bailey, Banking Services Director, (405) 522-4216 or contact her via email at carole.bailey@treasurer.ok.gov.
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Due to a change in banks utilized for pay cards, the OMES Human Capital Management Division has updated the Automatic Deposit Transmittal Form (HCM-73) for employees.
Please visit the OMES HCM website to download the updated form. Agencies will be able to update agency names and provide contact information for direct deposit on the Word document.
If there are questions or if assistance is needed with the form, please contact the OMES Payroll Team at Payroll.Service@omes.ok.gov.
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OMES will have W-2s and 1099s ready for release on Jan. 16, 2014. Agencies may pick up the forms from OMES, Room 122, at the State Capitol Building beginning at 10 a.m. If an express mail service or courier is to be used, please notify OMES with the necessary information. If the forms are not picked up by 3 p.m., Jan. 21, 2014, 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 2012 PeopleSoft W-2 forms should fit the 2013 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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2013 – 1099 Report
A 1099 Report is available for agencies to run in the PeopleSoft system any time. 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. This report should be reviewed and corrections submitted to OMES as soon as possible. A final report should be processed by agencies by Jan. 2, 2014, or possibly prior to Dec. 31 if the agency will not be making any more 1099 reportable payments. All corrections must be returned to Beth Brox at OMES by Jan. 7, 2014.
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 beth.brox@omes.ok.gov.
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, 2300 N. Lincoln Blvd., Room 122. Agencies can submit a test file at anytime. Final information is due Jan. 7, 2014.
The file instructions and format can be found on the DCAR forms page of the OMES website:
- 1099 Detail File Format – Outside Agencies
- 1099 Outside Agency Cross-Reference
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1099 Instructions – Detail File Format
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Listed below is contact information for OMES personnel working on the IRS reporting project for tax year 2013. The fax number is (405) 521-3902.
- Lisa Raihl, Accounting and Reporting Analyst – (405) 521-3258; lisa.raihl@omes.ok.gov
- Jean Hayes, Payroll Compliance Officer – (405) 522-6300; jean.hayes@omes.ok.gov
- Beth Brox, Administrative Officer – (405) 522-1099; beth.brox@omes.ok.gov
- Jennie Pratt, Accounting and Reporting Supervisor – (405) 521-6160; jennie.pratt@omes.ok.gov
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PeopleSoft employee W-2s are processed and printed in MailDrop order. Please ensure this field is properly used for employees.
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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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Dec. 20, 2013 – Last day refund of taxes due to overpayments can be returned to agencies (See article below)
Dec. 27, 2013 – Last day OMES will process payrolls for calendar year 2013. PeopleSoft payrolls must be delivered to OMES by 3 p.m. on this date. Any delays must be communicated immediately to OMES otherwise payrolls may not process to pay timely.
Dec. 30, 2013 – Backup withholding payments from agencies must be received by OMES (See article below)
Jan. 7, 2014 – Payroll warrant cancellations, OMES Form 94Ps, and earning adjustments for calendar year 2013 must be received at OMES by 5 p.m. on Jan. 7, 2013. Any 2013 payroll information received after Jan. 7, 2014, will require a corrected W-2.
Jan. 31, 2014 – Deadline for delivering W-2 forms to employees
Feb. 17, 2014 – Form W-4 with exemption expires (See article below)
Feb. 22, 2014– Last date to submit corrected W-2 forms (See article below)
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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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Agencies need to review all outstanding employee overpayments and collect required amounts from employees. After collection, please submit OMES Form 94P. Agencies will be entitled to receive refunds for all forms submitted by Dec. 20, 2013. 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 W-2 information for requests submitted through Jan. 7, 2014.
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Agencies that have collected backup withholding on miscellaneous claims need to submit payment to be received by OMES prior to Dec. 30, 2013. Make interagency wires payable to the State Contribution Fund (Vendor 0000000467, ADDR # 002, LOC # 0002)
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Corrected W-2 forms must be delivered to OMES by Feb. 21, 2014. Please send the original W-2, a copy of the corrected form, and a letter 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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Year 2013 rates are provided for comparison purposes. In order to view the table, select the link.
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. 17, 2014 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, 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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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 2012 and anticipated no income tax liability for 2013 was entitled to an exemption from withholding for 2013. This exemption expires on Feb. 17, 2014, and must be renewed if conditions remain the same. If you receive an exempt W-4 after Feb. 17, 2014, do not process a tax refund to the employee or submit one to OMES. They will not be processed. If you receive an exempt W-4 after Feb. 17, 2014, 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 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, 2013, the amount they owe will increase to the gross amount.
Once the overpayment is identified, the agency must send a notice to the employee within 10 days of the finding. The employee then has 30 days to respond to this notification.
In accordance with O. S. Title 74 Section 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:
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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 approaching, 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 Deere 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, this is 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, 2013, 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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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. The OMES is responsible for timely depositing of all payroll taxes.
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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ACCOUNTING
The procedures for Title 62 § 34.80C, which addresses statutorily cancelled warrants that should not be replaced, are presented in OSF Procedures Manual, Chapter 600, Section 605 as follows:
If there is a warrant listed which the issuing agency knows of a reason it is not eligible for reissue or should never be reissued, it must notify the Office of Management and Enterprise within seven (7) days after notification of the cancellation (receipt of said report). Title 62, § 34.80C. However, should such determination be made at a later date, OMES should be notified then.
The AP Statutory Cancellations report (Accounts Payable > Reports > AP > Payments > AP Statutory Cancellations) was designed for agencies to run monthly to review recent stat cancelled warrants and satisfy the requirements of Title 62, § 34.80C. The report does not include the ‘replaced by’ and ‘do not reissue’ notations, so if this report has not been run routinely, begin the process by running the 36 Month Statutory Cancellation report (Accounts Payable > Reports > Payments > 36 Month Statutory Cancellations) to review stat cancelled warrants without these notations. Report warrants that should not be reissued to Steve Wilson at steve.wilson@omes.ok.gov. Then include the AP Statutory Cancellations Report on the month-end checklist.
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Agencies should also include the Month End Outstanding Warrants report (Accounts Payable > Reports > AP > Payments > Month End Outstanding Warrants) on the month-end checklist to research aging warrants and limit the occurrence of large stat cancelled warrants.
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There continues to be many aging OMES inter-unit vouchers. Please run the OCP_AP_UNPAID_VOUCHERS query to identify unprocessed vouchers. If copies of invoices are needed, or if a voucher amount is disputed, please contact the OMES Service Desk at (405) 521-2444 to begin the resolution of these issues.
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OMES inter-unit credit vouchers can be offset against the original vouchers or other OMES inter-unit vouchers if the original vouchers have already been paid. Credits should not be taken before the original invoice is paid.
If an original voucher was processed with a PO, restore the PO encumbrance using the same PO line and PO distribution line used on the original voucher. Submit the debit and credit vouchers in the same batch. The debit voucher must equal or exceed the credit voucher and ‘Separate Payment’ cannot not be marked on the Payments page of the voucher. Contact the OMES Service Desk at (405) 521-2444 if assistance is needed.
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Tax payments to the Oklahoma Tax Commission should be made using the interagency method, but OTC requests the three digit tax code be used in the invoice ID. For example, if an agency’s invoice ID policy is to use permit number for sales tax payments, the invoice ID could be formatted to be 555555STP. Agencies should include the OTC tax payment invoice ID format in the agency invoice ID policy and style guide to ensure consistency.
Tax warrant payments assigned to OTC should be paid to location 0028 using the interagency method. The vendor’s name and the tax warrant number from OTC’s authorization should be entered in the Message field on the Voucher Payments page so OTC can identify the payment. The Message field is 70 characters for agencies entering claims online. Agencies transmitting claims can enter this information in columns 301-378 in the Payee Record Layout to populate the Message field.
Motor vehicle tag payments made to the OTC and processed at the Conners Building should be made using the interagency payment method. Payments made to local tag agencies can be processed with a warrant, but an exemption should be obtained from the state treasurer for these payments.
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An Electronic Remittance Advice can be copied to a secondary e-mail address. The primary email ID is maintained in the Vendor Information Address page, and the secondary email ID is in the Vendor Information Contacts page and must be linked to an EFT address and have a Type of Accounts Payable. SETID 00000, Vendor ID 0000181645, is an example of a vendor with primary and secondary email addresses. For vendors requesting advices be sent to two e-mail addresses, please contact Julie Dvorak at vendor.eft@omes.ok.gov to provide the addresses.
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The OCP_PCARD_VCHR_STG_VALIDATIO query is now available for agencies to run and determine when the accounts payable staging tables have been loaded with the P-Card transactions. Please include this query on your P-Card checklist to run on the P-Card download date and ensure the tables are loaded with the correct amount due to the bank. Please direct any questions regarding discrepancies to patricia.garcia@omes.ok.gov.
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