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CAR Newsletter - May 2022

Volume 32 |Number 11 | Fiscal Year | May 9, 2022

In This Issue ...


Payroll Deduction Register must accompany payments

Agencies are responsible for sending vendors the Payroll Deduction Register page(s) for payments processed to ensure proper credit to employees’ accounts. When contacted by a vendor or the central payroll team to provide missing information, a prompt response is required due to time sensitivity of some payments. Without this information, the vendor cannot timely credit an employee’s account; and if the payment is for a garnishment or lien, penalties and/or interest may be added to the account in error. When mailing warrants, please ensure all documentation related to the payment is included. When the payment is processed as an Electronic Funds Transfer or Interagency WIR, please ensure that the proper documentation is submitted by either email, fax or mail to allow for proper credit to the employee’s account. Vendors may have a specific method for receiving the detail related to the electronic payment and their instructions should be followed.

Federal (IRS) W-4 entries in PeopleSoft HCM

Employees should only be providing the 2022 IRS W-4 form to update withholding elections on the Federal Tax Data page in the PS HCM system. Any other version of the form should be disregarded and returned to the employee, with no changes made in the system.

Agency personnel must use care when entering employee federal W-4 changes. You must select the 2020 or Later button so that the appropriate Federal Withholding Elements are visible for data entry. If the information is not entered correctly, employees may have more or less withholding than desired which could impact them at year-end. In addition, not entering the information correctly based on the actual W-4 form would be an audit finding by the IRS and could result in penalties and/or interest being assessed to the agency. To refresh your knowledge of the W-4 form, view the IRS' training video, Understanding the 2020 Form W – 4 and How to Use it to Calculate Withholding.

Employee direct deposit verification of bank routing number

Employee bank deposit slips should NOT be used to get the bank routing/transit number for setting up direct deposit information. A voided check from the employee is the most reliable method. If the employee does not have a voided check or wants to deposit into another type of account, have the employee call the bank directly to get the routing/transit number. A bank routing/transit number should never start with the digit 5, which indicates a branch of the bank and will cause the direct deposit to fail. A failed direct deposit means the OST will not be paid and an additional processing will be required of the agency.

Using state vehicles to commute

O.S. 47 § 156.1, as amended, prohibits the personal use of state-owned motor vehicles but permits the use of the vehicles for commuting in very specific situations. 2007 OK AG Opinion 18 also addresses this issue.

When a state employee is allowed to commute in accordance with the statute or the attorney general opinion, the agency must notify the governor, the president pro tempore of the Senate, and the speaker of the House of Representatives. In addition, when an employee is using a vehicle from OMES Fleet Management, the agency must complete OMES CAM/FLEET MGMT FORM 022 Authorization for Commuting in State Vehicle.

The IRS considers commuting to be a noncash taxable benefit to the employee even when the use of the vehicle is for the benefit of the employer. There are very few exceptions to the taxability of commuting. Exceptions are for certain vehicles that are not likely to be used for personal use because of their design. These vehicles are listed in IRS Publication 15-B.

  • The method of calculating the taxable fringe benefit is dependent on the employee’s status.
  • Commuting Rule: Most state employees may use the Commuting Rule. Under this rule, the value of a vehicle provided to an employee for commuting is computed by multiplying each one-way commute by $1.50. If more than one employee commutes in the vehicle, this value applies to each employee. This amount must be included in the employee’s wages or reimbursed by the employee.
  • Cents per mile: A cents-per-mile method may also be used by most state employees.
  • Automobile Lease Valuation Rule: Elected officials or employees whose compensation is at least as great as a federal government employee at Executive Level V (for 2022, $165,300) are not allowed to compute taxable income under the Commuting Rule; must use the Automobile Lease Valuation Rule to compute taxable income.
  • All valuation methods are described in detail in IRS Publication 15-B.

The employee may choose to have the value included as taxable income or pay the employer for personal use rather than having it treated as wages. When treating the value as wages, the imputed income is subject to FICA and income tax withholding. The taxable amount, if not paid by the employee, must be processed through payroll so that taxes are calculated and amounts are reported on the employees’ W-2.

Process the taxable amount through the PS HCM system using the TRC code of CAR, which will show as earnings code CAR. The amount will be included as taxable income and will be taxed on the paycheck.

We recommend the vehicle usage be included in the employee’s payroll each pay period to prevent a large sum being included in the employee’s last pay of the calendar year, resulting in a higher than normal amount of taxes withheld. Additionally, up-to-date reporting of vehicle usage will benefit the agency should the employee terminate during the year.

For more information, please email the central payroll team at

Processing of taxable fringe benefits with payable wages

When processing nonpaying taxable fringe benefits for employees through payroll, only include the amount when processing payable wages. Nonpaying taxable fringe benefits such as vehicle usage (CAR/VEH), and miscellaneous (MIS) are subject to taxes and require payable wages in order to collect the employee share of taxes. Questions may be directed to the central payroll team at

Military differential wage payments – taxation and reporting

Military differential wage payments are payments made to an employee during the time the individual is on active duty for a period of more than 30 days and represents all or a portion of the wages an employee would have received from the employer if the individual was performing services for the employer.

Military differential pay is includible as wages for income tax purposes on Form W-2 but is excludible from Social Security and Medicare taxes. To correctly report military differential wage payments, Time Reporting Code MILDF (earnings code MLD) must be used.

The military differential pay is also included in wages for OPERS, OLERS and URSJJ retirement contributions and must be correctly coded in order for the information to be sent to the retirement systems correctly.

Please refer to O.S. 72 § 48 and OAC 260:25-15-44 for additional information related to leave of absence due to military service.



BrightPath Parallel Payroll Testing continues this month with a move from Cycle 1 testing to Cycle 2. Thank you to all agencies for your excellent work and partnership throughout this process. Moving to Cycle 2 allows agencies to compare another month of payroll data and continue adjusting Workday to ensure payroll runs correctly. Payroll testers have a reprieve for the week as the project team enters catch-up transactions.

This break in testing is a great time for agencies to begin planning for go-live. We highly recommend agencies (especially larger agencies) consider staffing up your payroll team in time for Workday training later this summer. According to a 2009 Willis Company survey, a rule of thumb is to have one payroll team member for every 250 employees.

OMES Central Purchasing

The Statewide eProcurement Solution Project officially kicked off on Jan. 11 this year.   

The project includes new functionality in PeopleSoft with the addition of three new modules: eSupplier and Supplier Portal, Strategic Sourcing, and Supplier Contracts. Watch for more details on the project along with ongoing updates in the coming weeks.  

Statewide program enhancements

In the past, many agencies have not been able to identify a statewide program that accurately described their contribution to statewide goals and instead coded budget and expenditures to NP000 - No Program.

To remedy this situation, four new statewide programs are now available for agencies to choose from:

Number Name Description
B0003 Legal & Judicial Administer justice and provide required legal services.
D0001 Administration &d Pensions Administer pensions, insurance systems and state financial services, and provide statutory administratvie services.
D0101 Licensing & Regulation Provide efficient licensing and regulation for jobs and economic sectors.
E0204 Tourism, Arts & Heritage

Support tourism, arts and the heritage of our state


Administration & Pensions replaces the former program, Performance Results; Licensing & Regulation replaces Energy Usage; and Tourism, Arts & Heritage replaces Transportation & Distribution. Legal & Judicial is a new program.

OMES expects that most agencies will be able to eliminate their use of NP000 by coding to these new programs. The new programs will be used in the FY 2023 Budget Work Program and will take effect for expenditures as of July 1, 2022.

As a reminder, statewide program expenditures are reported to the public on

Please contact:


AGA OKC Chapter Professional Development Training

AGA OKC Chapter invites you to the next Spring Professional Development Training: Women in the Workforce.

Scheduled speakers:

Elena Tercero, AGA
Deborah Senner, Allied Arts  
Sarah Penn & Dawn Sullivan, ODOT   
Shelley Zumwalt, OESC 
Kim Sheppard, FAA       

When: May 20, 2022
Where: ODOT Building Commission Room
Cost: $85 for 6 hours of CPE

Visit the AGA OKC website to register.

American Payroll Association monthly Lunch & Learn – OKC Chapter meeting

Topic: IRS Update
Speaker: Mercean Lam, Sr.
When: May 20, 2022
Time: Noon-1 p.m.
Cost: Member $10
Seminars via Zoom
For more information, visit the 
APA website.

Payroll Law

Live Online Seminars
Presented by Fred Pryor Seminars
For more information, visit the 
Pryor website.

Form W-4 and other payroll updates

Live Online Webinar
Presented by myCPE
For more information, visit the 
myCPE website.

Last Modified on May 19, 2022
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