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CAR Newsletter - October 2022

Volume 33 | Number 4 | Fiscal Year 2023 | Oct. 21, 2022

In This Issue ...


PAYROLL

Employees Remote or Teleworking – Primary Location Outside of Oklahoma

As a result of the COVID-19 pandemic, many state employees are working remotely. If employees work remotely outside of Oklahoma, this requires the state, as the employer, to withhold income taxes for that state, as applicable. Several states have issued guidance or passed temporary laws relaxing this requirement, but not all have taken this approach. If an agency has employees working outside of Oklahoma, please contact the OMES Central Accounting and Reporting group at payrollreporting@omes.ok.gov so that we can determine the required withholding and reporting for those employees. Once reporting requirements have been determined, the work location will need to be where the employee is physically located.

Payroll Deadlines Reminder

Agencies are required to have payroll documents to OMES no later than 12 p.m. five business days before the pay date. All necessary documents must be submitted by the deadline to ensure adequate time for audit and processing. The following documents are required to be submitted by state agencies: 1) the final budget checking report showing no budget deficit and 2) the signed payroll claim document. You must submit the paperwork with your read receipt to payrolltransprocess@omes.ok.gov.

For all payrolls processed and paperwork submitted by 12 p.m., the payroll will be released that day if all similar pay groups are received. If the paperwork is not received by 12 p.m., the payroll for similar pay groups will hold ALL agencies until the paperwork is submitted.

Payrolls submitted after 12 p.m. will process the following business day once the paperwork has been received. If an agency is late submitting payroll and needs the payroll to process that day in order to pay timely, the agency must notify us as soon as the delay is known by contacting Elsa Kunnel at 405-521-6178 or Jean Hayes at 405-522-6300 or payrolltransprocess@omes.ok.gov

Institutions of higher education have different document requirements. The following is required from the institutions: 1) the Validate PFT Funding report showing no budget deficit and 2) the signed payroll claim document. Agencies are required to have payroll documents to OMES by 3 p.m. five business days before the pay date.

Deadlines for November Payrolls

In planning your work for November, remember Veterans Day is Friday, Nov. 11. The Thanksgiving holiday is recognized on Thursday and Friday, Nov. 24-25. November biweekly payroll for state agencies on biweekly schedules will be paid on Friday, Nov. 4, and Friday, Nov. 18. November monthly payrolls will be paid on the last working day of the month, Wednesday, Nov. 30.

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

SUPPLEMENTAL: Workday supplemental payrolls are set to pay on Thursday, Nov. 10. Agencies should have these payrolls processed and paperwork forwarded to OMES by Thursday, Nov. 3.

BIWEEKLY: Biweekly payrolls are set to pay on Friday, Nov. 4. Agencies should have these payrolls processed and paperwork forwarded to OMES by Friday, Oct. 28.

The next biweekly pay date will be Friday, Nov. 18. Agencies should have these payrolls processed and paperwork forwarded to OMES by Thursday, Nov. 10.

For the Friday, Dec. 2, biweekly pay date, agencies should have these payrolls processed and paperwork forwarded to OMES by Wednesday, Nov. 23.

MONTHLY: Monthly payrolls will be set to pay on Wednesday, Nov. 30. Agencies should have these payrolls processed and paperwork forwarded to OMES by Wednesday, Nov. 23.

Submission of OMES Form 94P

When an employee reimburses a payroll overpayment, please complete and submit the OMES Form 94P as soon as the reimbursement is made. Timely submission helps ensure corrections are reflected in the quarter in which they occurred for proper reporting and also helps in the full recovery of OPERS retirement amounts. If the retirement system is unaware of an overpayment and the pending overpayment refund request, payouts to former employees may be wrong, resulting in a loss to the agency. In addition, retirement calculations may be wrong if the overpayment is not reported timely.

Please do not provide copies of personal checks. The form allows the agency to enter the amount reimbursed. Additional backup data is not required. 

The form requires the state employee ID be entered. Please do not submit with the Social Security number or any other number.

Employee Moving Expense Payments are Taxable

The 2017 Tax Cuts and Jobs Act suspends the tax-free exclusion of qualified moving expenses paid to or on behalf of an employee by an employer. The suspension period is for tax years beginning Jan. 1, 2018, through Dec. 31, 2025.

Authorized moving expenses paid directly or indirectly to or for an employee will be taxable as wages and must be processed through the payroll system. This includes payments made with the P-card and those processed through accounts payable.

If paying the employee directly (through accounts payable) or a third party for moving expenses, the agency must notify its payroll department of the amount paid. The amount must process through the payroll system as nonpaying, taxable earnings so the amount will be taxed and properly reported on the employee’s W-2. We recommend the amount be processed through payroll on the employee’s next paycheck. Delaying until the end of the year can cause a hardship for the employee by taking the taxes out during the holidays and can also cause issues with collecting the employee taxes if the employee has terminated employment.

For any amounts paid directly to the employee through the Workday system, taxes will be withheld from the gross amount and the employee will receive the net payment.

Payroll Warrant Reversals

When a payroll warrant is reversed in workday, any payable time associated with that warrant will need to be paid using the on-demand process. Workday does not return those hours to the time sheet. For a replacement check to be issued before the reversal is complete, it requires entering time upon which to be paid. Completion of the reversal after the replacement check results in duplication of the time worked in the system and potentially a duplicate payment to the employee if not reviewed and corrected.

Agencies should not issue a replacement until the reversal is complete to mitigate any wage and tax balance discrepancies.

If an agency absolutely cannot wait for the reversal to complete before issuing a replacement, the agency is responsible for removing the payable time created by the reversal. The agency must also review employee wage balances when processing a replacement check to ensure all wage and tax balances will be correct after the reversal is completed.

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 a noncash taxable benefit to the employee even when use of the vehicle is for the employer's benefit. 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 this rule by which the value of a vehicle provided to an employee for commuting is computed by multiplying each one-way commute by $1.50. This amount must be included in the employee’s wages or reimbursed by the employee. If more than one employee commutes in the vehicle, this value applies to each employee.
  • 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 calculate taxable income under the commuting rule. These officials and employees 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 treating it as wages. The taxable amount, if not paid by the employee, must be processed through payroll, so taxes are calculated and amounts are reported on the employee's W-2. When treating the value as wages, the imputed income is subject to FICA and income tax withholding. 

Process the taxable amount through the Workday system using the correct earning code. Vehicle usage (CAR) should be used for one-time payments. Vehicle Usage – TT (VEH) should be used when entering on the time sheet. Agencies are responsible for reviewing the entries for accuracy. The amount will be included as taxable income and taxed on the paycheck.

We recommend the vehicle usage be included in the employee’s payroll each pay period to prevent a large sum from 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 contact Jean Hayes at 405-522-6300 or jean.hayes@omes.ok.gov.

Payroll Warrants Issued in Error

When an agency receives a payroll warrant issued in error, the warrant must be returned as soon as possible to OMES for cancellation. Payroll warrants must be accompanied by an OMES Form PWC.

Warrants issued by the state treasurer that remain outstanding or unpaid for a period of 90 days shall be revoked and canceled under the provisions of O.S. 62 § 34.80. Cash is transferred to the canceled warrant fund for warrants canceled by statute. Agencies will not be refunded the value of the canceled warrants.

Payroll Stat-Canceled Warrants not Eligible for Reissue

Agencies should review the PS Financials Payroll 36-Month Statutory Cancellation Report on a regular basis.

If a payroll warrant is listed and the employee is entitled to the funds, please complete OMES Form 20R and send it to OMES CAR Transaction Processing, which will allow a replacement warrant to be issued to provide the employees with their due pay.

If a payroll warrant is listed and the employee is not entitled to the funds, the issuing agency must notify OMES (O.S. 62 § 34.80). Notification should include the warrant number and date and must be signed by an agency approving authority. In addition, the amounts must be removed from the employee’s earning record. Please send notification to OMES CAR Transaction Processing stating the warrant should not be reissued. Please contact Jean Hayes at 405-522-6300 or jean.hayes@omes.ok.gov.

Agency Address Verification

Please verify the correct agency address is being used in the Workday system. The agency address can be found on the Employee’s Earnings Statement. If the agency address is incorrect, it must be updated before year-end processing of tax forms. Please call the OMES Service Desk at 405-521-2444 to have the agency’s address updated in the Workday system.

HIGHER EDUCATION PAYROLL

November Payroll Deadlines

In planning your work for November, remember Veterans Day is Friday, Nov. 11. The Thanksgiving holiday is recognized on Thursday and Friday, Nov. 24-25. Please adjust your payroll processing schedules as needed. All payroll documents must be received five business days before the actual pay date to ensure adequate time for audit and processing.

1099 INFORMATION

Review 1099 Reportable Transactions Report

Each agency should review its 1099 reportable transactions for the first three quarters of the calendar year 2022. Agencies should run and print the 1099 Transaction Report in the PeopleSoft system. The report path is:

Accounts Payable > Reports > Payments > Misc. Tax Information Report

Specify your agency number and select the date range as 01/01/2022 through 09/30/2022.

As you review this report, please note that our primary concerns are the IRS Name, TIN, 1099 address and 1099 Flag. All vendors that need to receive a 1099 should have a Y in the 1099 Flag column. If it shows an N and the vendor needs a 1099, please indicate the change with your corrections. If a 1099 Flag is N, there is no need to submit a change of address since the vendor will not receive a 1099; otherwise, please verify the address where the 1099 should be sent. The amounts are listed on the report, so as you reconcile, ensure all payments are accounted for.

Return the report and all available W-9s to document your changes (even if only for an address change) to OMES on or before Friday, Oct. 28. Your timely review and response to this report will allow us time to update the vendor file with the best information possible for the final report, which will need to be reviewed the first week of January 2023.

The 1099 report is processed in a .pdf format. Insert any changes or comments through Adobe Acrobat and save. Email the corrected report to alicia.reel@omes.ok.gov. Please password-protect the document and send the password in a separate email. If you have any questions or comments regarding this matter, please contact Alicia Reel at 405-522-1099.

TRAINING

American Payroll Association Monthly Lunch & Learn – OKC Chapter Meeting

Topic: Electronic Payroll for Today and Tomorrow
Date: Friday, Oct. 21, 2022
Time: Noon to 1 p.m. via Zoom

Visit their website for more information.

Statewide Financial Policy Training

OMES is again offering the Statewide Financial Policy Training session for state agency finance, budget, procurement personnel, P-card holders and agency directors.

The training provides a broad overview of the state’s accounting, budgeting and procurement policies and is recommended for everyone in a management position within an agency as well as for all financial and budget staff whether they are new or a veteran state employee. This is the same course that has been held for the past four years and is highly recommended for those who have not yet attended.

The class provides six hours of continuing professional education credits for CPAs, CPOs or CGFM.

Register here for the Statewide Financial Policy Training.

Statewide Financial Policy Training
9 a.m. to 4:30 p.m.
Thursday, Nov. 17, 2022
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Payroll Law

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

Last Modified on Oct 26, 2022
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