CAR Newsletter February 2024

Volume 34, Number 8 | Fiscal Year 2024 | Feb. 13, 2024

• Clearing and Special Account Reconciliations

• INT035a Financial Budget Data Load
• IRS Form W-4 Exemption Renewal
• State Form W-4 Exemption Renewal
• Annual Withholding Tax Exemption Certification for Military Spouse
• Employees Remote or Teleworking - Primary Location Outside of Oklahoma
• Reporting Requirements for Repayments of Prior Year Wage Amounts
• Reduction of Annual Leave Hours for Overpayments
• Outstanding Wages Beneficiary Designation Option
• OMES Form PWC, Payroll Warrant Cancellation
• Compensation to Current and Former Employees, Including Settlements

1099 INFORMATION

• 1099 Corrections
• Agency 1099 Report

HIGHER EDUCATION

• PFT Processing for Cancellations and Adjustments

AGENCY NEWS

• OMES PeopleSoft Financials Single User ID and Single Sign-On
• Update to PeopleSoft Requisition Functions Processing Guide

TRAINING

• Statewide Finance Policy Training Videos Now Available
• Form I-9 and E-Verify webinars
• OKC Chapter - American Payroll Association

Reminder: Agencies and Higher Education entities are required by statute to reconcile clearing and special accounts on a monthly basis. These reconciliations are due to OMES by the 20th of the following month. This activity is an important internal control and is the method of posting disbursements for these accounts. A Form 11 reconciliation should not contain plug numbers or ongoing unreconciled differences. If there has been turnover in your agency and training is needed on the process, please contact accounting@omes.ok.gov.

Process overview

Integration INT035a is run to pull budget data from PeopleSoft Financials into Workday@OK. The data is stored and used in the budget check report for the payroll in progress. There is a launch component that tells the system to begin the process of running INT035a. The controller integration process puts the request in a queue, which organizes the various launch requests statewide, processing one at a time. The INT035a Financials Budget Data Load MAIN (3) is the actual process that populates the budget table and readies the budget check report. Lastly, another INT035a Controller Integration (2) runs telling the process to stop running.

Running INT035a

To run the integration:

• Type Launch in the search bar.
• Select Launch / Schedule Integration.
• In the Integration box, select INT035a Financials Budget Data Load (Launch).
• Enter the applicable information and select OK to begin the process.
• After starting the integration, agencies should run the INT035a Integration Events - Audit Report to gauge the progress of the MAIN (3) process. This process must be completed prior to running the budget check report.

Verifying INT035a status

• Type INT035a Integration Events - Audit Report in the search bar and select the link.
• On the next screen, change the date/time as needed and select OK. The process will enter a queue first, and it may not immediately appear. When the MAIN (3) process begins, it will appear and show with a status of Processing.
• Continue to refresh your browser until it says that the process is complete. Once complete, the budget check report can be run. If the process completes with errors, the budget check report may have deficits or may not have the correct balances pulled in from PeopleSoft Financials. If this occurs, you will need to submit a Service Desk ticket; request it to be assigned to Workday-PATT & Benefits, for the error to be reviewed and corrected. Once corrected, the INT035a process can be run again, and once successfully completed without errors, a new budget report will be complete.

Agencies are reminded to review and ensure employees have a valid federal income tax withholding exemption election on file for 2024. The current exemption expires on Feb. 15, 2024, and employees must enter a new tax election to continue exemptions for 2024. If you receive an exempt W-4 after Feb. 15, 2024, do not process a tax refund to the employee or submit one to OMES for processing. The W-4 will take effect on the next pay cycle; it is not retroactive to the beginning of the year.

The Workday@OK report, Expiring Exempt Tax Elections, can be run to identify employees in the agency who claim exempt. When running the report, use the current date as the Exempt Election As of Date, enter 000 State of Oklahoma as the Company and choose Federal for the Tax Authority. Unselect the Include Terminated Workers box. This will provide a list of all agency employees claiming exempt from federal income tax withholding. The Effective Date on the report should be reviewed and if prior to the begin date of the first payroll that paid in 2024, the employees will need to be notified to update their tax election. If employees do not update their tax election by Feb. 15, 2024, they must be changed back to the last valid W-4 on file prior to the exemption; or if none on file, set the Marial Status to Single with no other entries.

Some states require employees to renew their exemption annually. Oklahoma currently does not.

For agencies with employees in other states, the Workday@OK report, Expiring Exempt Tax Elections, can be run to identify employees in the agency who claim exempt in those specific states. Agency personnel must be familiar with the W-4 requirements for states in which they have employees. When running the report, use today as the Exempt Election As of Date, enter 000 State of Oklahoma as the Company and choose the applicable state as the Tax Authority. Unselect the Include Terminated Workers box. This will provide a list of all agency employees claiming exempt from state income tax withholding. The Effective Date on the report should be reviewed and if prior to the begin date of the first payroll that paid in 2024, the employees will need to be notified to update their tax election. If employees do not update their tax election by the date specified by the state, they must be changed back to the last valid W-4 on file prior to the exemption or if none on file, set the Marital Status to Single with no other entries.

For employees claiming exemption from Oklahoma’s income tax withholding under the Military Spouses Residency Relief Act, a new valid OTC Form OW-9-MSE (Annual Withholding Tax Exemption Certification for Military Spouses) is required to continue the exemption for 2024. This form must be completed annually. If a new exemption form has not been submitted for 2024, the employee’s withholding status must go back to the last valid Form W-4 on file. When an employee submits the Form OW-9-MSE, they must also submit a completed Form OK-W-4. If you receive an exempt Form OK-W-4 with Form OW-9-MSE after processing a payroll, do not process a tax refund to the employee or submit one to OMES for processing. The new exemption form will take effect on the next pay cycle; it is not retroactive to the beginning of the year.

As a reminder, a nonresident spouse of a nonresident service member may be exempt from Oklahoma income tax on income from services performed in Oklahoma. OTC Form OW-9-MSE must be completed and returned to the employer with the required documentation, along with Form OK-W-4. The instructions contain a list of requirements the employer must meet before the withholding exemption will be allowed. The forms must be completed each year the exemption is to be claimed. When entered in Workday@OK, the process will prompt the employee to submit the required documentation.

The Workday@OK report, PY/Payroll State Tax elections, can be run to identify employees in the agency claiming the military spousal exemption. When running the report, enter the company name in Company and the current date as the Effective as of Date. This will provide a list of all employees’ state tax elections. Filter on the MSRR Exempt column with the Value equal to Yes. The list will show all employees with the exemption and the effective date. The Effective Date on the report should be reviewed and if prior to the begin date of the first payroll that paid in 2024, the employees will need to be notified to update their MSRR exemption. If employees do not update their MSRR exemption by the date specified by the state, they must be changed back to the last valid W-4 on file prior to the exemption.

For agencies with employees in other states, the report can be run to identify employees claiming the military spousal exemption in those specific states. Agency personnel must be familiar with the military spousal exemption requirements for states in which they have employees. The procedures detailed above will need to be followed as required for the specific states.

Agencies continue to increase the number of state employees who work remotely and need to be cognizant of withholding and reporting requirements for these employees. For employees working remotely outside of Oklahoma, the state, as the employer, is required to withhold and submit income taxes to that state and report unemployment and other applicable wages and taxes. If an agency has employees working outside of Oklahoma, the work location must be updated to the state where the employee is physically working. The employee tax elections must be timely updated to reflect the new tax jurisdication for income tax and unemployment withholding/reporting purposes.

Please help communicate these requirements to agency HR, recruiting and onboarding personnel as many tasks are performed or initiated by them. Although OMES Central Payroll processes the actual  payments and reports to the other states, agency personnel must be familiar with the requirements for any state in which employees are hired. Please email OMES Central Payroll at payrollreporting@omes.ok.gov with any questions concerning employees working out of state.

Repayments from employees made in the current year (2024) that are for overpayments of wages in a prior year (2023 or earlier) must be repaid at the gross overpayment amount in accordance with IRS regulations. A W-2C must be completed and sent to OMES. Only Social Security and Medicare wages and taxes are corrected on the W-2C.

Do NOT correct federal or state taxable wages or income taxes. The employee received and had use of the funds during the year of overpayment; thus, the amounts are taxable for federal and state purposes. The employee may be able to consider such repayments on their current year (2024) income tax return. Please advise the employee to speak to a tax accountant.

Additional instructions for Form W-2C are available on the IRS website. For assistance, contact Jean Hayes at 405-522-6300 or payrollreporting@omes.ok.gov.

When an employee chooses to reimburse an overpayment of salary or wages using annual leave, the amount of annual leave reduced should equal the gross amount of the overpayment.

If an employee reimburses an overpayment using terminal leave, an OMES Form 94P must be submitted to correct the retirement amounts reported on the check which included the overpayment. Terminal leave is not included in retirement wage calculations; therefore, a payroll correction is required. For assistance, contact Jean Hayes at 405-522-6300 or payrollreporting@omes.ok.gov.

40 O.S. § 165.3a allows employers to provide employees the option of designating a beneficiary for wages and benefits payable upon an employee’s death. There is no requirement for an employer to allow employees to select beneficiaries, but agencies may want to consider adopting such a policy. Providing the option to employees relieves stress and anxiety on the family members and provides agencies with clear guidance on who is to receive final wage payments.

This statute does not include any longevity payment that may be due as of the date of death of an employee. 74 O.S. § 840-2.18, subsection H.2, authorizes any longevity payment to be paid to the decedent’s surviving spouse, or to the decedent’s estate if there is no surviving spouse.

For more information or sample forms and instructions, please email payrollreporting@omes.ok.gov.

The OMES Form PWC should only be used when an employee is not entitled, in part or whole, to the funds. All PWC forms OMES receives initiate the process to retrieve the funds, if direct deposit, and cancel the warrant in the payroll system. It is imperative that agencies identify payroll errors and process the form immediately upon discovery.

Paper warrant cancellations: Email Form PWC to payrolltransprocess@omes.ok.gov. Scan the original warrant (marked void) and attach to the email. However, OMES will process the cancellation without the scanned copy if the email certifies the agency has the warrant and can provide it when circumstances allow. If physically sending the paper warrant and form, the original warrant must be marked “Void” and attached to the completed Form PWC and sent to OMES Central Payroll, located in the Lincoln Data Center (LDC), 3115 N. Lincoln Blvd., Ste. 2059. These requests cannot be processed by fax.

Direct deposit cancellations: Email Form PWC to payrollreporting@omes.ok.gov. The document must be password-protected and the password should be included in a separate email or sent via another secure method. To ensure direct deposit funds are returned, the PWC request must be received by noon three business days prior to the effective pay date. Any request for cancellation of direct deposits after that cutoff will be subject to recall or reversal procedures that are subject to denial by the employee’s bank. An employee must be notified in writing of a reversing entry and its reason no later than the effective date of the reversing entry. Please notify the employee no later than the day the OMES Form PWC is submitted for processing.

Your agency can modify the statement below and use it to inform your employee of the pending reversal.

“A payroll item will be posted in error to your bank account on MM/DD/YY. A reversal has been issued and will post to your account to pull these funds back to the state. Please keep the full amount of this deposit in your account. If the state cannot retrieve the full amount of the deposit, action will be taken in accordance with applicable procedures to retrieve the funds from you.”

Once the funds have been returned to the state, OMES will process a cancellation in the payroll system, which returns the funds to the agency. If the funds cannot be recovered from the bank, the agency is responsible for recovering the funds from the employee. Please refer to 74 O.S. § 840-2.19 D for proper procedures for recovering overpayments, if needed. The agency should submit OMES Form 94P for processing if the employee reimburses the funds through a miscellaneous payroll deduction or cash.

PWC forms received for direct deposit items that are more than four business days past the effective date will not be processed pursuant to NACHA rules. If agencies encounter erroneous entries more than five business days past the effective date, please contact OMES or OST for consultation on options for recovering the funds.

All compensation to employees and former employees, no matter what form, constitutes wages unless specifically excluded by the Internal Revenue Code. This includes stipends, allowances, employee lawsuits and settlements, gifts, prizes, awards and fringe benefits, to name a few. Before compensation is given to current or former employees, agencies must determine the correct method of payment (payroll vs. accounts payable) and reporting required (W-2, 1099 or none). In an audit, the IRS will focus on the reason for the payment.

NOTE: The IRS has determined that Oklahoma public school teachers receiving payments from a state agency are to be treated as employees of the state. As such, any payments to teachers need to be evaluated to determine if the payments should be considered wages. If so, the amounts must be paid through the payroll system, not accounts payable, to be reported on Form W-2 by the paying agency.

NOTE: Attorney fees paid on a settlement are reportable to the plaintiff if the settlement is a reportable settlement. For attorney fees paid through accounts payable, the amount must be reported to payrollreporting@omes.ok.gov. The attorney will automatically receive a 1099-MISC reporting the amount in Box 10 on a 1099 MISC if the correct account code is used on the voucher payment. The plaintiff reporting requires a manual entry and must be reported to OMES.

If a payment settles a lawsuit, the auditor will focus on the basis of the lawsuit. Agency payroll, finance, human resources and legal departments should obtain the knowledge needed to accurately process compensation to employees or former employees. Agencies are responsible for complying with IRS requirements for withholding and reporting.

If the plaintiff is a current or former employee and the settlement or judgment payment is income that constitutes wages, the payment is reportable as compensation and included on the W-2 and all applicable taxes and deductions must be withheld. For any payment that is income but doesn’t constitute wages, the payment will be subject to reporting on Form 1099-MISC to the plaintiff in Box 3, Other Income.

If an agency has a settlement agreement that requires the payment be processed through accounts payable instead of the payroll system to expedite processing and the payment is reportable as compensation, then applicable federal, state and FICA taxes must be remitted to OMES on the same day the settlement to the individual is processed. If taxes are not withheld on the payment, the agency must gross up the amount and pay both the employee and employer share of taxes. The employee’s record will be updated for year-end reporting. If additional guidance is needed, please email payrollreporting@omes.ok.gov.

All 1099 corrections for CY 2023 or for previous years must be submitted to OMES as soon as possible. OMES will report the correction to the IRS. This includes payments reported on 1099NEC, 1099MISC, 1099INT, 1099DIV, 1099B, 1099F and 1099G. This also includes any 1099 that was not originally produced and now must be issued to the vendor. If you should have any 1099s that are returned by the vendor requiring changes, please submit those changes to OMES along with the original 1099 and any documentation to support the change. If you have any questions, please contact Alicia Reel at 405-522-1099 or alicia.reel@omes.ok.gov.

NOTE: This does not apply to Higher Ed Institutions, as those Institutions do their own 1099 reporting.

A report is available for each agency to run that will give a summary of the 1099-MISC & 1099-NEC forms that have been produced for the 2023 Reporting Year.  The report can be found in PeopleSoft Financials at: Suppliers>OCP 1099 Processes>Agency 1099 Report.  Enter the Reporting Year 2023 for the year and your Agency/Business Unit in the From and To.  If you have any questions, please contact Alicia Reel at 405-522-1099 or alicia.reel@omes.ok.gov.

As a reminder, when an MWC or EWC is submitted to cancel a payroll warrant, a corresponding PFT Reversal file must be submitted to remove the funds from the 789 class-funding and place the amount back in the originating class-funding. The amount in the PFT reversal file should be the gross-to-net amount and employer share of taxes and benefits that processed on the original warrant.

The PFT Reversal process is also used to process amounts in or out of the 789 fund based on business needs, including:

• Processing taxes which were not processed through the normal 500Misc/PFT process but must be submitted through the ACES system.
• Corrections necessary for overpayment refunds. 
• Correction of items improperly reported or omitted from the original PFT submitted.

Additional information on processing PFT Reversal files can be found on the OMES State Accounting System Information webpage. 

Effective Feb. 5, we transitioned the login process of the Production system to single sign-on (SSO). This enables you to use your email address and Windows password to log in.

Accessing Peoplesoft Financials with SSO.

The SSO sign-in page will automatically log you in if you are accessing another SSO application or you will see the page below.

For users outside of SSO or with multiple IDs:

For user IDs outside of SSO, or multi-user IDs for different roles within the system, you will still be able to log in but will use a separate URL. This login method will be similar to how you currently log in using your PeopleSoft ID and PeopleSoft password.

Accessing PeopleSoft Financials with direct log in using your PS ID and password.

When you need to log in using your additional PeopleSoft ID, you will see the page below.

If you have any issues with the new process, please reach out to the OMES Service Desk. 

A copy of the PeopleSoft Fluid Requisition Functions and Purchase Order Processing Guide V2 was recently sent out to help you navigate the new check boxes and drop-down menus for sole sources, statewide orders and exempt purchases.

An update has been made to the guide. Please begin using the PeopleSoft Fluid Requisition Functions and Purchase Order Processing Guide V2.1. 

Access Workday@OK for updated versions of the guide and related training videos when available.

For any questions, please contact the OMES Service Desk. 

The Statewide Finance Policy Training videos are now available on Workday@OK Learning.

The videos are searchable under the title [OMES-CAR] Statewide Finance Policy Training. There are a total of 13 lessons listed under this course.

Multiple webinar choices and dates:

Form I-9: An overview of the Form I-9 requirements, including step-by-step instructions on how to complete each section, acceptable documents, retention and storage.

E-Verify overview: An overview of the E-Verify program including how the program works, key features, how to enroll, employer responsibilities, program highlights and a demonstration of the program.

E-Verify in 30: A quick overview of the E-Verify program including what it is, how to enroll and key features.

E-Verify for existing users: A detailed overview of the E-Verify program specifically for existing users. Topics include Form I-9, user roles, creating a case, case alerts, how to handle a TNC and common user mistakes.

For more information on the webinars, please visit the USCIS.

Topic: Payroll and Accounting
Date: Feb. 17, 2024
Time: Noon to 1 p.m. via Zoom

Visit their website for more information.