CAR Newsletter December 2023
Volume 34, Number 6 | Fiscal Year 2024 | Dec. 12, 2024
In This Issue ...
- HCM Central Payroll is on the Move
- 2023 1095-C and W-2 Electronic Option in Workday@OK
- Deadlines for December Payrolls
- OMES Contact Information for Tax Year 2023 Reporting
- Agency Payroll Corrections – Year-End Review
- Employee Overpayments and OMES Form 94P Submission
- Taxable Fringe Benefits
- Employee Overpayments Collected After Year End
- Agency Address Verification
- State HCM System Use of Addresses for Year-End Tax Reporting Forms
- W-2 Instructions
- Payroll – End of Calendar Year 2023
- Correcting W-2s
- Federal Income Tax Withholding
- 2024 Rates and Maximums for FICA and Unemployment
- Social Security Administration Notification of Name/SSN Errors
- IRS Information Reporting Penalties
- Employee Name and Social Security Number Entries in HCM
- 2023 – 1099 Report
- 1099 File Format – Outside Agencies
- 2023 – 1099 NEC and 1099 MISC Forms
- 1099 Envelopes
- 2023 1099 Distribution
- IRS Reporting – Form 1098-F Fines, Penalties and Other Amounts
- 2023 Backup Withholding
Statewide Accounting Manual Update
The updated Statewide Accounting Manual is now available on the OMES CAR website. These updates reflect key changes with Workday@OK and e-supplier.
HCM Central Payroll is on the Move
On Dec. 11, 2023, OMES HCM Central Payroll will move to the Lincoln Data Center (LDC). The new address is:
3115 N. Lincoln Blvd., Suite 2059
Oklahoma City, OK 73105-5400
Staff phone and fax numbers and email addresses will remain the same.
2023 1095-C and W-2 Electronic Option in Workday@OK
Agencies are encouraged to promote electronic-only access to year-end forms. The following information is provided to distribute to employees:
To avoid waiting for your 2023 Form 1095-C or your 2023 W-2 to arrive by mail, you can opt to go paperless only. When you choose to go paperless only, you will receive an electronic copy of the documents (to download and print) earlier than if electing both paper and electronic. Once you select to receive an electronic-only copy, you do not need to make the selection again in the future.
A 1095-C user guide and a W-2 user guide have been created to assist you in opting out of receiving the documents by mail. Those who have elected to receive both electronic and paper copies for their year-end documents will have them mailed by the required deadlines. Electronic versions will also be available by the deadlines. W-2s are due to employees by Jan. 31, 2024. 1095-C forms vary in the due date and may be between Jan. 31 - April 1, 2024.
Deadlines for December Payrolls
In planning your work for December, it is important to remember that the state holidays for Christmas this year are Monday and Tuesday, Dec. 25 and 26. Additionally, the New Year’s holiday is observed on Monday, Jan 1, 2024. The remaining December biweekly payroll for state agencies will be paid on Friday, Dec. 15, and Friday, Dec. 29. December monthly payrolls will be paid on the last working day of the month, Friday, Dec. 29. With these dates in mind, staff should plan their work accordingly for the holiday deadlines:
Biweekly: The last biweekly payroll will be Friday, Dec. 29. Agencies must have these payrolls processed and paperwork forwarded to OMES by noon on Wednesday, Dec. 20.
Monthly: Monthly payrolls will be set to pay on Friday, Dec. 29. Agencies must have these payrolls processed and paperwork forwarded to OMES by noon on Wednesday, Dec. 20.
OMES Contact Information for Tax Year 2023 Reporting
Listed below is contact information for OMES personnel working on the IRS reporting project for tax year 2023. The fax number is 405-522-2186.
- Jean Hayes, Payroll Compliance Officer: 405-522-6300; email@example.com
- Alicia Reel, Payroll Specialist: 405-522-1099; firstname.lastname@example.org
- Lisa Raihl, Director of Payroll: 405-521-3258; email@example.com
- Felicia Clark, State Comptroller: 405-717-8865; firstname.lastname@example.org
- Sharon Saunders, Benefits Supervisor: 405-522-1181; email@example.com
Agency Payroll Corrections – Year-End Review
Agencies should review all employee corrections for the year to ensure they have been processed by OMES HCM 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 are entitled to receive refunds for all forms submitted by Friday, Dec. 15, 2023. 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 2023 W-2 for requests submitted through Friday, Jan. 5, 2024. Any corrections submitted after Jan. 5 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 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; the worker 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 to us only after the agency has recovered the overpaid amount. Please sign the completed form acknowledging receipt of employee repayment and accuracy of the form.
Taxable Fringe Benefits
Any taxable fringe benefits not yet recorded and reported this year must be included in the December payroll. The HCM 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 vehicles.
- Maintenance, car and housing allowances.
- Additional non-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 HCM Central Payroll 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
The 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 2023 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 2023 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) occurred.
- Lump-sum cash repayment.
- 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) occurred.
- Any combination of the above options.
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 in Workday@OK. The agency address can be found on the Employee’s Earnings Statement. Please contact the OMES Service Desk at 405-521-2444 or email@example.com to have the agency’s address updated PeopleSoft Financials, which will then flow over to Workday@OK.
State HCM System Use of Addresses for Year-End Tax Reporting Forms
Workday@OK uses the first address it finds for an employee based on the following order:
|Payroll Tax Form
|Payroll Tax Form
Please communicate to employees the need for an updated address in the system as this will be used on the file to the IRS.
OMES will have W-2s ready electronically by Jan 19, 2024. For employees who do not elect to receive theirs electronic only, W-2s will be printed and mailed on Jan. 31, 2024.
Payroll – End of Calendar Year 2023
Dec. 15, 2023 – Last day that a refund of taxes due to overpayments can be returned to agencies (see above article).
Dec. 27, 2023 – Last day OMES will process payrolls for calendar year 2023. Payrolls must be received by noon on this date. Any payrolls received after this deadline will not process to pay in 2023.
Jan. 5, 2024 – Payroll warrant cancellations, OMES Form 94Ps and earning adjustments for calendar year 2023 must be received by OMES no later than 5 p.m. Any 2023 payroll information received after this date will require a corrected W-2 from the agency.
Jan. 19, 2024 - W2 forms will be available to employees electronically (see article above).
Jan. 24, 2024 – Last date to submit corrected W-2 forms for file submission (see article below).
Jan 31, 2024 - Printed W2 forms will be mailed to employees (see articles above).
Jan. 31, 2024 – Deadline for delivering forms to employees.
Feb. 15, 2024 – Form W-4 with exemption expires (see article below).
Corrected W-2 forms must be delivered to OMES HCM Central Payroll by Jan. 24, 2024, for the corrections to be in the submission file. The due date for submission of form W-2 information to the IRS is Jan. 31, 2024.
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.
Exempt from withholding: An employee who certified to his or her employer on the 2023 Form W-4 that the employee had no income tax liability for 2022 and anticipated no income tax liability for 2023 was entitled to an exemption from withholding for 2023. This exemption expires on Feb. 15, 2024, and must be renewed if conditions remain the same. To claim exempt status, the employee must complete only steps 1 and 5 and write ‘Exempt’ in the space below Step 4(c). 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. 15, 2024, do not process a tax refund to the employee or submit a request to OMES HCM Central Payroll. They will not be processed. If you receive an exempt W-4 after Feb. 15, 2024, 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 been issuing Letter 2800C, WHC Lock-in Letter to Employer (lock-in letter) with the permitted filing status and withholding instructions based on the new W-4 which is no longer using withholding allowances. Follow all instructions in the letter as you enter the information into Workday@OK and select the Lock-in Letter field. 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.
2024 Rates and Maximums for FICA and Unemployment
Year 2023 rates are provided for comparison purposes. View the table here.
Social Security Administration Notification of Name/SSN Errors
The Social Security Administration is 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.
IRS 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 $310 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 correct Form W-2. If both penalties are assessed, the amount could be as much as $620 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 $1,240. 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 correct the wrong information timely 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.
Since September 2007, when the Social Security Administration updated the Social Security card, the cardholder’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 ensure the employee completes the business process in Workday@OK in a timely manner. Not having the information entered will cause issues with year-end reporting. In addition, other required processes and reporting are delayed then this information is not timely entered and in a complete status, such as E-Verify, new hire report and retirement files.
You may enter the name that the employee currently uses as their preferred 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 for the legal name.
2023 – 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 01/01/2023–12/31/2023. This report will reflect the 1099 data from PeopleSoft vouchers. 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. 3, 2024, or preferably by Dec. 31, 2023. All corrections must be returned to Alicia Reel at OMES by Jan. 5, 2024.
1099 File Format – Outside Agencies
Any agency needing to submit an additional file for 1099-MISC reporting should use the format listed in the CAR forms page . Instructions are provided in a separate link as well as a listing of 1099 reportable account codes. Due to the sensitive nature of the data, please email your file, password protected, to firstname.lastname@example.org. It is recommended that these agencies submit a test file by Dec. 15, 2023, to have a name and TIN match done with the IRS. Final information is due Jan. 10, 2024.
The file instructions and format can be found on the OMES CAR Forms page:
- 1099 Detail File Format – Outside Agencies.
- 1099 Instructions – Detail File Format.
- 1099 Account Code Cross-Reference.
2023 – 1099 NEC and 1099 MISC Forms
Beginning with tax year 2020, the IRS has reintroduced Form 1099-NEC to report non-employee compensation (formerly Box 7 on 1099MISC). This form will only contain non-employee compensation reported in Box 1 and reporting to the IRS will be due by Jan. 31, 2024. Any corrections will be required to be returned by Jan. 26, 2024, so they can be entered in the file which is due to be filed with the IRS by Jan. 31, 2024. Any corrections needed after this date should still be sent to OMES for correction and notification to the IRS. This will ensure our reporting is as accurate and complete as possible. The IRS has revised Form 1099-MISC for reporting all other types of income.
Agencies will print all 1099 Forms on traditional 8½ x 11 white paper. The forms can be trifolded and will fit in a standard No.10 window envelope. If requested, sample printed forms can be provided. Please contact Alicia Reel at 405-522-1099 or email@example.com.
2023 1099 Distribution
All 1099 forms will be distributed as an Adobe PDF File through email, between Jan. 16-19, 2024.
Please email your agency's contact information to OMES Central Payroll with the following details for a primary and alternate contact:
- Agency number.
- Agency name.
- 1099 Contact name.
- 1099 Contact phone.
- 1099 Contact email.
NOTE: This does not apply to Higher Ed Institutions since they do their own 1099 reporting.
IRS Reporting – Form 1098-F Fines, Penalties and Other Amounts
The Tax Cuts and Jobs Act of 2017 added Internal Revenue Code (I.R.C.) Section 6050X, which imposes a reporting requirement on certain government entities involved in settlements where I.R.C. Section 162(f) applies. Section 162(f)(1) disallows any deduction for amounts paid or incurred by a taxpayer, to or at the direction of a governmental entity, for violation of a law or the investigation or inquiry by such entity into the potential violation of a law. However, Section 162(f)(2) provides exceptions for amounts related to restitution, remediation and costs incurred by a taxpayer to come into compliance with a law.
Beginning with tax year 2022, the IRS required governmental entities to file IRS Form 1098-F for amounts required to be paid pursuant to a suit, court order or agreement with respect to any violation of law or the investigation or inquiry into the potential violation of a law, if the aggregate amount involved in all suits, orders or agreements in relation to the violation of the law equals or exceeds $50,000 (threshold may change in future years).
- Reporting is required for a suit, order or agreement that becomes binding on or after Jan. 1, 2023.
- The amount required to be paid includes costs to provide services or to provide property.
- A separate Form 1098-F must be filed with respect to each payer that is a party to the suit, order or agreement.
- Form 1098-F is not required for any person that doesn’t have a payment obligation or obligation for costs to provide services or to provide property.
- Forms are due to payers by Jan. 31, 2024.
Instructions for IRS Form 1098-F can be found here.
A reporting document has been created for state agencies to provide OMES with the required information to create the 1098-F forms. Please complete and email the reporting document as soon as possible but no later than Jan. 19, 2024, to firstname.lastname@example.org.
NOTE: Institutions of higher education will not submit any information to OMES for 1098-F reporting. Please consult your tax accountant if you feel reporting may be required.
2023 Backup Withholding
Agencies that have collected backup withholding on miscellaneous claims must submit payment to be received by OMES prior to Dec. 29, 2023. Please make interagency wires payable to the State Contribution Fund (Vendor 0000000467, ADDR # 002, LOC # 0002). After processing the payment, please notify OMES HCM Central Payroll at email@example.com.
December Payroll Deadlines
In planning your work for December, it is important to remember that the state holidays for Christmas this year are Monday and Tuesday, Dec. 25 and 26. Additionally, the New Year’s holiday is on Monday, Jan. 1, 2024. With these dates in mind, please adjust your payroll processing schedules as needed. All payroll documents must be received by 3 p.m. 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 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.
2024 EFT Calendar
The 2024-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 2024 holidays correspond with the federal institution/bank holidays with the exception of these four:
- Juneteenth - 6/19/2024
- Columbus Day - 10/14/2024
- Additional Thanksgiving holiday observed - 11/29/2024
- Additional Christmas holiday observed - 12/24/2024
If your agency sends EFT items effective for these dates, the Treasurer’s Office will change the date to the next valid EFT date.
Please contact Nancy Rooker, Banking and Treasury Services Manager, at 405-521-3121 or firstname.lastname@example.org, if you have questions concerning the calendar.
ACA Reporting Reminders for 2023
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 1095-C form will be produced. This combined 1095-C form includes information related to the employee across multiple agencies.
NOTE: Only employees eligible for an offer of health coverage or those in a stability period with an offer of coverage will receive a 1095-C form for 2023. Not all employees will receive a 1095-C form.
Feb. 2, 2024– Last day for agency updates to be provided to OMES Benefits for the 1095-C forms to be correct. Changes to 2023 data after this date must be communicated to Sharon Saunders, Benefits Supervisor; email@example.com, 405-522-1181, for accurate 2023 reporting.
Mar. 15, 2024 – Last date to submit corrected 1095-C forms for file submission (see article below).
OMES will have 1095-C forms ready electronically by Feb. 16, 2024. Employees that do not elect to receive electronic ONLY for their 1095-C will have their form printed and mailed on March 1, 2024.
In addition to the 1095-C form, state agency employees enrolled in health coverage will receive a 1095-B form from their insurance carrier. The 1095-B form provides information about who was covered and the periods of coverage. For questions related to ACA reporting, please contact Sharon Saunders, Benefits Supervisor, at firstname.lastname@example.org or 405-522-1181; or Ryan Barr, Central Benefits Partner, at 405-522-0112 or email@example.com.
Correcting Form 1095-C
Corrections for Form 1095-C must be submitted to OMES HCM by Mar. 15, 2024. Please send the original form, a copy of the corrected form and a memo explaining why the correction is needed. Please send corrections to Sharon Saunders, Benefits Supervisor at firstname.lastname@example.org (405-522-1181) or Ryan Barr, Central Benefit Partner, at ryan.Barr@omes.ok.gov.