CAR Newsletter - December 2020
Deadlines for December payrolls
In planning your work for December, it is important to remember that the state holidays for Christmas this year are Thursday and Friday, Dec. 24 and 25, and the New Year holiday is Friday, Jan. 1, 2021.
Remaining December biweekly payroll for state agencies (B or C biweekly schedules) will be paid on Friday, Dec. 18 and Thursday, Dec. 31. December monthly payrolls will be paid on the last working day of the month, Thursday, Dec. 31. With these dates in mind, staff should plan their work accordingly for the holiday deadlines:
B and C biweekly: The last biweekly payroll for B and C biweekly schedule agencies will be Thursday, Dec. 31. Agencies should have these payrolls processed and paperwork forwarded to OMES by Tuesday, Dec. 22.
Monthly: Monthly payrolls will be set to pay on Thursday, Dec. 31. Agencies should have these payrolls processed and paperwork forwarded to OMES by Tuesday, Dec. 22.
OMES contact information for tax year 2020 reporting
Listed below is contact information for OMES personnel working on the IRS reporting project for tax year 2020. The fax number is 405-522-2186.
- Jean Hayes, payroll compliance officer – 405-522-6300; firstname.lastname@example.org
- Alicia Reel, payroll specialist – 405-522-9479; email@example.com
- Lisa Raihl, state payroll manager – 405-521-3258; firstname.lastname@example.org
- Beth Brox, senior vendor registration specialist – 405-522-1099; email@example.com
- Jennie Pratt, director of Statewide Accounting – 405-521-6160; firstname.lastname@example.org
- LaCree Austin, classification and compensation analyst – 405-521-6337; email@example.com
W-2 reporting of Families First Coronavirus Response Act wages
The IRS requires W-2 form reporting for qualified sick and family leave wages paid to employees under the Families First Coronavirus Response Act. All agencies must report the Emergency Paid Sick Leave and Extended Family Medical Leave wages through the HCM system with the correct earnings codes. Please be sure to report all wages correctly before the end of the calendar year. This required reporting provides employees who are also self-employed with information necessary for properly claiming qualified sick leave equivalent or qualified family leave equivalent credits under the Families First Act.
Agency payroll corrections – year-end review
Agencies should review all employee corrections for the year to ensure they have been processed by OMES CAR as requested. This includes cancellation of payroll warrants, overpayment refund requests, Social Security number changes and any other requests that affect W-2 reporting. For any requests identified as not yet processed, please contact Jean Hayes or Alicia Reel for a status update.
Agencies should 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, 2020.
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 be posted to the employee’s 2020 W-2 for requests submitted through Wednesday, Jan. 6, 2021. Any corrections submitted after Jan. 6 will require a corrected W-2 or W-2C as applicable.
Employee overpayments and OMES Form 94P submission
State agencies are encouraged to review employee overpayments as soon as possible. Overpayments may be due to incorrect hours paid, wage amounts or benefit allowance payments. Timely calculation and recovery of overpayments allows for the OMES Form 94P to be submitted for adjustments to be reported in the quarter in which the overpayment occurred. In addition, overpayments not reported to the retirement systems in a timely manner may result in less than a full recovery of funds for the agency due to employee payouts being processed prior to notification of the overpaid amount.
Delays in notifying the retirement systems may also cause employee retirement calculations to be incorrect.
When submitting the Form 94P, please do not provide copies of personal checks. The form allows the agency to enter the amount recovered. Additional backup data is not required. Please do not submit the form with the Social Security number. Instead, the employee ID (EmplID) should be entered.
If an agency has questions, needs assistance or would like the form reviewed prior to requesting the overpayment from the employee, please email firstname.lastname@example.org. The final form is to be submitted only after the agency has recovered the overpaid amount.
Taxable fringe benefits
Any taxable fringe benefits not yet recorded and reported this year must be included in the December payroll. 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:
- Employee use of state of state vehicles.
- Maintenance, car and housing allowances.
- Additional non-cash 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 may 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 depositing the taxes. Any taxes associated with items not run through the payroll system must 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.
Please refer to the W-2 instructions and Publication 15A, Employer’s Supplemental Tax Guide, for additional information. Also, refer to OMES Human Capital Management rules to determine whether these payments are a valid pay plan for a particular agency.
Employee overpayments collected after year end
he collection of any outstanding overpayments is especially important at year end. Employees who owe any monies back to the agency must reimburse the agency by Dec. 31 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.
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 and should discuss with their tax advisor.
For example, John Deere was overpaid in September 2020 by $1,000 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 or miscellaneous deduction), 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 2020 W-2 would include the $1,000 overpayment in taxable wages.
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).
- Lump-sum cash.
- 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).
- Any combination of the above.
For amounts reimbursed 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 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.
Agency address verification
Please verify the correct agency address is being used on the Oracle PeopleSoft HCM system. The agency address can be found on the Employee’s Earnings Statement. If the address is not correct for the agency, it must be updated before year-end processing of tax forms. Please contact the OMES Service Desk at 405-521-2444 or email@example.com to have the agency’s address updated in the HCM system.
State HCM system use of addresses on W-2s
As a reminder, in the Oracle 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 must be updated or inactivated.
State HCM system use of addresses on 1095-C, ACA Reporting Form
The 1095-C form process in the Oracle PeopleSoft HCM system has been set to load the employee’s mailing address just as the W-2 process does. If there is no value in the mailing address field, then the employee’s home address will be used on the 1095-C form. If there is a value in the mailing address field that is not to be used on the 1095-C form, it must be updated or inactivated.
PeopleSoft MailDrop for year-end processing
Oracle PeopleSoft HCM system employee W-2s and 1095-C forms are processed and printed in mail drop order. Please ensure this field is properly used for employees. The forms will print in the same order as checks and advices sort, which is based on each agency’s needs.
- State agency 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 2019 PeopleSoft W-2 forms should fit the 2020 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 third and the middle third of the page containing the two copies of the form. The bottom third of the page will contain the mailing addresses. Instructions will print on the back of the form. Standard No. 9 or No. 10 envelopes with left windows should work.
Sample printed forms of the PeopleSoft W-2 and 1099 MISC can be provided if requested. Please contact Jean Hayes at 405-522-6300 or firstname.lastname@example.org, or Alicia Reel at 405-522-9479 or email@example.com.
W-2, 1095C and 1099 pick up instructions
OMES will have W-2s, 1099s and 1095 files ready for release on Tuesday, Jan. 19, 2021, beginning at 10 a.m. through Thursday Jan. 21, 2021, at 3 p.m. Agencies will pick up the forms from our temporary location at 3115 N Lincoln Blvd (OMES IS Building). You may park in front of the building in the visitor parking spots. As you enter the building, you will need to pick up the phone to check in. A team member will then bring your package to you.
Payroll – end of calendar year 2020
- Dec. 18, 2020 – Last day that a refund of taxes due to overpayments can be returned to agencies (see above article).
- Dec. 29, 2020 – Last day OMES will process payrolls for calendar year 2020. 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, 2020 – Backup withholding payments from agencies must be received by OMES (see article below).
- Jan. 6, 2021 – Payroll warrant cancellations, OMES Form 94Ps and earning adjustments for calendar year 2020 must be received by OMES no later than 5 p.m. Any 2020 payroll information received after this date will require a corrected W-2 from the agency.
- Jan. 6, 2021– Last day for state agency updates to employees' ACA Eligibility Page for the 1095-C forms to be correct. Changes to 2020 data after this date must be communicated to LaCree Austin, classification and compensation analyst, firstname.lastname@example.org, 405-521-6337, for accurate 2020 reporting.
- Jan. 19-21, 2021 – All forms are to be picked up on Jan. 19, 2021, beginning at 10 a.m. through Thursday Jan. 21, 2021, at 3 p.m. (see article above).
- Jan. 27, 2021 – Last date to submit corrected W-2 and 1099 forms for file submission (see articles below).
- Feb. 1, 2021 – Deadline for delivering forms to employees/vendors.
- Feb. 16, 2021 – Form W-4 with exemption expires (see article below).
- Feb. 26, 2021 – Last date to submit corrected 1095-C forms for file submission (see article below).
Agencies that have collected backup withholding on miscellaneous claims must submit payment to be received by OMES prior to Dec. 30, 2020. Please make interagency wires payable to the State Contribution Fund (Vendor 0000000467, ADDR # 002, LOC # 0002). After processing payment, please send details of the payment to Jean Hayes or Alicia Reel at email@example.com or firstname.lastname@example.org.
Corrected W-2 forms must be delivered to OMES by Jan. 27, 2021, for the corrections to be in the submission file. The IRS has accelerated the requirements for reporting certain year-end information. The due date for submission of form W-2 information to the IRS is Feb. 1, 2021.
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.
Federal income tax withholding
Exempt from withholding: An employee who certified to his or her employer on the 2020 Form W-4 that the employee had no income tax liability for 2019 and anticipated no income tax liability for 2020 was entitled to an exemption from withholding for 2020. This exemption expires on Feb. 16, 2021, and must be renewed if conditions remain the same. To claim exempt status, the employee must complete only steps 1 and 5. If an exempt W-4 has any information in steps 2 through 4, the form is invalid. If you receive an exempt W-4 after Feb. 16, 2021, 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, 2021, the W-4 will take effect on the next pay cycle; per IRS regulations it is not retroactive to the beginning of the year.
Lock-in letter: The IRS has started issuing Letter 2800C, WHC Lock-in Letter to Employer with the permitted filing status and withholding instructions based on the new W-4 which no longer uses withholding allowances. Follow all instructions in the letter to provide the employee their copy and begin withholding based on the date specified in the notice. If an employee has a lock-in letter in effect and submits a new W-4, you must ensure the new W-4 does not result in less being withheld than required by the IRS. If so, you cannot enter the W-4 and you must let the employee know it will not be entered in the system.
2021 rates and maximums for FICA and unemployment
Year 2020 rates are provided for comparison purposes. View the table here.
Social Security Administration notification of name/SSN errors
The Social Security Administration has started mailing educational correspondence to employers that submit Forms W-2 containing employee names and Social Security numbers that do not match SSA’s records. This letter is to provide employers with resources to help ensure accurate year-end reporting. Employers may also receive letters if there are any name/SSN errors on W-2 reporting. The letters come directly to OMES. Agencies will be notified of any name/SSN errors on the report that applies to the agency.
Internal Revenue Service information reporting penalties
Along with the SSA letters discussed in the article above, IRS information reporting penalties may apply for failure to file and failure to furnish correct information returns. A penalty for failure to file correct information returns can be up to $280 per form, indexed annually. A penalty for failure to furnish a correct information return could also apply to the same error if an employer furnished an incorrect form to an employee and failed to file a corrected Form W-2. If both penalties are assessed, the amount could be as much as $560 per Form W-2. In addition, the penalty applies to the ACA reporting Form 1095-C. For one employee with an incorrect name/SSN combination who receives both a W-2 and a 1095-C, the total penalty could be as much as $1,120. IRS enforcement of accuracy-related penalties is evolving, and penalty assessment may be increasing.
OMES verifies employee name and SSN combinations several times throughout the year through the SSA website. Agencies with mismatched results are notified and are required to provide the necessary changes to ensure year-end reporting is correct. This process helps to ensure accurate reporting and reduces the risk of information reporting penalties.
Employee name and Social Security number entries in HCM
When entering a new employee’s name and Social Security number or updating a current employee’s name, please verify the name and SSN being entered is exactly as it appears on the employee’s Social Security card.
This is critical in reporting not only the W-2 wages at year-end, but the Affordable Care Act required health offer/coverage information as well. If the name and SSN do not match the Social Security Administration records, the employee’s wages may not be credited to their Social Security account. Additionally, if the name and SSN do not match, the employee may not be reported correctly for ACA purposes which could result in an IRS letter to the employee for possible lack of health coverage or an IRS letter to the agency for not offering coverage.
Beginning Sept. 8, 2007, the Social Security Administration updated the Social Security card. The number holder’s name will always be printed on two lines with the last name printed directly below the first and middle names. If you receive a prior version from an employee and are unsure, please ask the employee to verify the first, middle and last names.
Additionally, compound names do not need to be hyphenated. If an employee provides a name with an apparent compound or multiple last names, ask the employee which name is the beginning of the last name and which (if any) is the middle name.
Please update the employee’s name in the HCM system as instructed in the COR301 Part II manual beginning on page 42 (Navigation: Workforce Administration > Personal Information > Modify a Person). You may enter the name that the employee currently uses as their paycheck name if desired so that their paycheck will continue to reflect the same name as in the past, but the employee record and W-2 information should match the Social Security card.
December payroll deadlines
In planning your work for December, it is important to remember that the state holidays for Christmas this year are Thursday and Friday, Dec. 24 and 25. Additionally, the New Year holiday is Friday, Jan. 1, 2021. With these dates in mind, please adjust your payroll processing schedules as needed. All payroll documents must be received five business days prior to the actual pay date to ensure adequate time for audit and processing.
Transparency reporting – reminders
Transparency (OpenBooks) files are due no later than the fifth business day of the following month.
Files must be sent timely in order to comply with monthly FTE reporting as well as statutory requirements for posting the data to the website. The following are specific field data reminders:
- Jobcode – This must be a valid OMES job code. Contact OMES HCM Classification and Compensation at 405-521-2177 for assistance with job codes.
- Hours – This must be an employee’s accurate hours. The hours reported here will also be used for FTE reporting, along with the pay frequency entered in the file.
- Warrant Number – The warrant number must contain the required leading 2. This is the actual warrant number processed through the state’s financial system and paid through the treasurer’s office.
- Pay Date – this is the actual pay date of the payroll and should not be changed to any other date.
ACA reporting reminders for 2020
Pursuant to Internal Revenue Code Section 6056 of the Patient Protection and Affordable Care Act, 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 health insurance coverage offered to state employees, their spouse and dependent(s).
For employees who have worked in multiple agencies during the year, only one Form 1095-C will be produced. This combined form includes information related to the employee across multiple agencies. The agency on record as the primary agency as of Dec. 31 receives Form 1095-C to distribute.
NOTE: The information to complete the Form 1095-C is extracted from the ACA Employee Eligibility page in the HCM system. Please ensure the data on this page correctly reflects an employee’s status for the entire calendar year. Only employees eligible for an offer of health coverage or those in a stability period with an offer of coverage will receive a Form 1095-C for 2020. Not all employees will receive the form.
Completed Forms 1095-C will be provided to agencies via a secure file. It is important that agencies print these documents and provide a copy to eligible employees. The IRS mandates this document be provided to employees by the end of January of the following year.
In addition to Form 1095-C, state agency employees enrolled in health coverage will receive Form 1095-B from their insurance carrier. This form provides information about who was covered and the periods of coverage.
Visit the OMES ACA page for additional ACA resources and helpful information. In addition, OMES HCM provides updates and information throughout the year to assist agencies with ACA compliance. To subscribe, please go to your subscriber preferences page and add their notices to your list of subscription preferences. For questions related to ACA reporting, please contact LaCree Austin, classification and compensation analyst; email@example.com, 405-521-6337.
Correcting Form 1095-C
Corrections for Form 1095-C must be submitted to OMES HCM by Feb. 26, 2021. Please send the original form, a copy of the corrected form and a memo explaining why the correction is needed. Please send corrections to LaCree Austin, classification and compensation analyst; firstname.lastname@example.org, 405-521-6337.
2020 – 1099 Report
The year-end 1099 Report is available for each agency 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 01/01/2020 – 12/31/2020. 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. If the vendor should be issued a 1099, please let OMES know so we can change the 1099 Flag to “Y.” The final report should be processed by agencies no later than Jan. 4, 2021, or preferably by Dec. 31, 2020. All corrections must be returned to Alicia Reel or Beth Brox at OMES by Jan. 6, 2021.
2020 – 1099 NEC and 1099 MISC Forms
Beginning with tax year 2020, the IRS has reintroduced Form 1099-NEC to report nonemployee compensation (formerly Box 7 on 1099MISC). This form will only contain nonemployee compensation reported in Box 1 and reporting to the IRS will be due by Jan. 31. The IRS has revised Form 1099-MISC for reporting all other types of income. All 1099 forms will be distributed with the W-2s Jan. 19-21, 2021.
Any corrections will be required to be returned by Jan. 27, 2021, so they can be entered in the file which is due to be filed with the IRS by Feb. 1, 2021. Any corrections needed after this date should still be sent to OMES for us to notify the IRS. This will ensure our reporting is as accurate and complete as possible.
NOTE: This does not apply to Higher Ed Institutions since they do their own 1099 reporting.
Update: PeopleSoft upgrade
Following the PeopleSoft upgrade, some users may have experienced longer run times when processing various jobs. To reduce the issue, please use the server PSUNX when available. This server provides better performance to users when running jobs such as Voucher Build and Scheduled Reports. Also, please do not cancel jobs while they are running as this causes information to be lost and must be retrieved via technical means, causing a delay in your processes.
2021 EFT date calendar
he 2021 – Valid EFT Date Calendar is ready for your agency to utilize in preparation for submission of your EFT transactions. Please use the calendar to ensure that your EFT items process with the effective dates intended. The letter “H” identifies holidays on the calendar. The state’s 2021 holidays correspond with the federal institution/bank holidays with the exception of these three:
- Columbus Day – Oct. 11, 2021.
- Additional Thanksgiving holiday observed – Nov. 26, 2021.
- Additional Christmas holiday observed – Dec. 23-24, 2021.
If your agency sends EFT items effective for these dates, the treasurer’s office will change the date to the next valid EFT date.
If you have questions concerning the calendar, please contact Deidra Salim at Deidra.Salim@treasurer.ok.gov or 405-522-6860.