ospa users forum year-end users forum november 16, 2007

OSPA USER’S OSPA USER’S FORUMFORUM

Year-End User’s ForumYear-End User’s Forum

November 16, 2007November 16, 2007

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AgendaAgenda

►Introductions – Katherine BremserIntroductions – Katherine Bremser►Year End Dates – Allison AbsherYear End Dates – Allison Absher►Overpayments – Kathyron Parsons Overpayments – Kathyron Parsons

/Pauline Lewis/Pauline Lewis►Check Reversals – Maria StalikCheck Reversals – Maria Stalik►Fringe Benefits – Sharon McKeehan / Fringe Benefits – Sharon McKeehan /

Katherine BremserKatherine Bremser►Year-end Timeline – Cheryll LuthYear-end Timeline – Cheryll Luth

It’s All About the It’s All About the Date!Date!

At Year End,At Year End,

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I went to this charming I went to this charming restaurant with a guy last night restaurant with a guy last night

…. ….

►Oh wait, not that Oh wait, not that kind of date! kind of date!

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Three Kinds of Dates:Three Kinds of Dates:

►Constructive Receipt Constructive Receipt

►P010 Dates P010 Dates

►P370 Check Dates P370 Check Dates

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Constructive ReceiptConstructive Receipt

►What is It?What is It?► Simply put, Simply put,

Constructive Receipt is Constructive Receipt is the day the employee the day the employee will have monies will have monies available to her.available to her.

► This can mean a This can mean a physical check that physical check that was mailed, ACH was mailed, ACH deposit that was sent, deposit that was sent, or fringe benefit that or fringe benefit that was received.was received.

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Here’s another way to look Here’s another way to look at it: at it:

Check the calendar – when should the Check the calendar – when should the employee receive her pay?employee receive her pay?

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If you answered “2007” to any of the above, If you answered “2007” to any of the above, then Constructive Receipt is in 2007.then Constructive Receipt is in 2007.

If you answered “2008” to any of the above, If you answered “2008” to any of the above,

then Constructive Receipt is in 2008.then Constructive Receipt is in 2008.

► If a deposit was sent ACH, will the settlement If a deposit was sent ACH, will the settlement date be in 2007 or 2008? (Hint: December’s date be in 2007 or 2008? (Hint: December’s ACH settlement date is 1/2/08)ACH settlement date is 1/2/08)

► If a physical check is mailed or delivered, is it If a physical check is mailed or delivered, is it reasonably expected to reach the employee in reasonably expected to reach the employee in 2007 or in 2008?2007 or in 2008?

► If the employee received a fringe benefit such If the employee received a fringe benefit such as meals, clothing allowance, etc. – did they as meals, clothing allowance, etc. – did they have the use of that benefit in 2007 or in 2008?have the use of that benefit in 2007 or in 2008?

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Constructive Receipt Constructive Receipt SummarySummary

►Money expected to be available to Money expected to be available to employee or fringe benefits used in employee or fringe benefits used in 2007 have Constructive Receipt of 2007 have Constructive Receipt of 2007.2007.


The Great Date MateThe Great Date Mate

Or, P010 Final Check Dates Or, P010 Final Check Dates – Why They Matter, When to – Why They Matter, When to

Set Them, and When to Set Them, and When to Leave Them Alone. Leave Them Alone.

Remember how to Remember how to figure out figure out

Constructive Constructive Receipt? Receipt?

Now how do you make sure Now how do you make sure OSPA dates the employee’s OSPA dates the employee’s

check to reflect that check to reflect that Constructive Receipt date? Constructive Receipt date?

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The Great Date Mate, of The Great Date Mate, of course! course!

Also known as P010 Final Dates Also known as P010 Final Dates

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So what makes the Great Date So what makes the Great Date Mate so special?Mate so special?

►The Great Date Mate holds enormous The Great Date Mate holds enormous power over managing Constructive power over managing Constructive Receipt at year end.Receipt at year end.

►This tool tells OSPA what date to print This tool tells OSPA what date to print on paychecks –on paychecks –

But only if you tell it to.But only if you tell it to.

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Before we get into year-end Before we get into year-end specifics, let’s review how the specifics, let’s review how the

Great Date Mate works.Great Date Mate works.

► This means, “What This means, “What date do you want OSPA date do you want OSPA to print on the check?”to print on the check?”

► This means, “For the This means, “For the check date above, check date above, which pay period are which pay period are you using?” you using?”

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Let’s take a quick look at a Let’s take a quick look at a sample. sample.

►In October, Taylor Smith will be In October, Taylor Smith will be terminating employment on 10/12/07.terminating employment on 10/12/07. Final cutoff for Sept Run 2 is 10/9/07; Final cutoff for Sept Run 2 is 10/9/07;

normal check date is 10/15/07.normal check date is 10/15/07. Final cutoff for October Run 1 is Final cutoff for October Run 1 is

10/26/07; normal check date is 11/1/07.10/26/07; normal check date is 11/1/07.

►You know about this on 10/4/07 so you You know about this on 10/4/07 so you go ahead and process the final payroll go ahead and process the final payroll entries that day.entries that day.

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If you do nothing to the Great Date If you do nothing to the Great Date Mate, what date will print on Mate, what date will print on October’s final system check?October’s final system check?

11/1/0711/1/07

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Now then, if you want the final Now then, if you want the final system check to be dated system check to be dated

10/12/07:10/12/07:► Set the Great Date Set the Great Date

Mate to date the Mate to date the check 10/12/07:check 10/12/07:

► And tell OSPA And tell OSPA which pay period which pay period you’re using:you’re using:

FINAL CHECK ISSUED: 101207 FINAL CHECK PERIOD ENDING: 103107

Easy, right?Easy, right?

Uh Oh . . .Uh Oh . . .

What if this employee has a What if this employee has a timesheet correction from timesheet correction from

September that still needs to September that still needs to be paid? be paid?

It needs to have the same It needs to have the same check date. check date.

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You already set the Great Date You already set the Great Date Mate to date the final check Mate to date the final check

10/12/07 10/12/07 Will these entries:Will these entries:

give you a September system check give you a September system check dated 10/12/07?dated 10/12/07?


Why or Why not?Why or Why not?

The Answer:The Answer:

NONO

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So how do you get the 9/30/07 pay period So how do you get the 9/30/07 pay period check to print with the 10/12/07 check check to print with the 10/12/07 check

date?date?

► You’ve told the You’ve told the Great Date Mate Great Date Mate that you want OSPA that you want OSPA to date the final to date the final check 10/12/07 check 10/12/07

► but you’ve specified but you’ve specified that the check will that the check will be coming from the be coming from the 10/31/07 pay period 10/31/07 pay period

Change the Change the date to date to 093007.093007.


FINAL CHECK PERIOD ENDING

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►Now what happens when October runs for Now what happens when October runs for this employee? this employee?

►Will October have a 10/12/07 check date? Will October have a 10/12/07 check date?

►Not if you leave the Not if you leave the

date at 093007.date at 093007.

►You’ll need to change it back to 103107 You’ll need to change it back to 103107 after September Run 2 has completed. after September Run 2 has completed.

NOTE: You probably requested a manual check for NOTE: You probably requested a manual check for this way back on 10/4. Setting the October P010 this way back on 10/4. Setting the October P010 dates simply matches the system date to the dates simply matches the system date to the manual check date.manual check date.


So how does the So how does the Great Date Mate Great Date Mate

apply at year end?apply at year end?

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Remember that Constructive Remember that Constructive Receipt exercise? Receipt exercise?

►Money expected to be available to Money expected to be available to employee or fringe benefits used in 2007 employee or fringe benefits used in 2007 have Constructive Receipt of 2007.have Constructive Receipt of 2007.

►Money expected to be available to Money expected to be available to employee or fringe benefits used in 2008 employee or fringe benefits used in 2008 have Constructive Receipt of 2008.have Constructive Receipt of 2008.

How do you make sure How do you make sure the paycheck you give the paycheck you give your employee has the your employee has the

right date on it so it right date on it so it corresponds with the corresponds with the date of Constructive date of Constructive

Receipt?Receipt?

Yep, the Great Date Yep, the Great Date Mate.Mate.

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If your employee will have If your employee will have constructive receipt of her constructive receipt of her

paycheck in 2007, the Great paycheck in 2007, the Great Date Mate should reflect that.Date Mate should reflect that.

►Namely, the Namely, the field would field would show a 2007 check date, show a 2007 check date,

►and the and the field will field will tell OSPA to use either November or tell OSPA to use either November or December to do it. December to do it.

►Let’s take a look at a quick sample.Let’s take a look at a quick sample.

FINAL CHECK ISSUED


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Taylor Smith is retiring at the end Taylor Smith is retiring at the end of December, and you’re lucky of December, and you’re lucky enough to know about it before enough to know about it before

December Run 1 final.December Run 1 final.

and will date the final check with the other check and will date the final check with the other check dates on 1/1/2008.dates on 1/1/2008.

► Since the employee’s last day is December 31, putting Since the employee’s last day is December 31, putting Constructive Receipt into 2007, that’s not what you want Constructive Receipt into 2007, that’s not what you want to happen.to happen.

► If you leave the Great Date Mate alone, it looks like this: If you leave the Great Date Mate alone, it looks like this:

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Now you’ve told OSPA to date the check Now you’ve told OSPA to date the check that comes for December as 12/31/07.that comes for December as 12/31/07.

Instead, you’ll need the Great Date Mate to show this:Instead, you’ll need the Great Date Mate to show this:

That’s more like itThat’s more like it!!

►Now let’s add another wrinkle.Now let’s add another wrinkle.

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This retiring employee has This retiring employee has timesheet corrections from timesheet corrections from September, October, and September, October, and November. November.

►Why do you think you cannot Why do you think you cannot simply set a corrective for those simply set a corrective for those months?months?

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What date do you think will print on the What date do you think will print on the corrected checks from September, October corrected checks from September, October and November?and November?

If you did set the corrective, and the Great Date If you did set the corrective, and the Great Date Mate is set up to date December’s check 12/31/07: Mate is set up to date December’s check 12/31/07:

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Did you tell OSPA to put a different date Did you tell OSPA to put a different date on the checks for PPE 093007, 103107, on the checks for PPE 093007, 103107,

or 113007?or 113007? ►Nope: Nope:

►So since you didn’t tell it to date those pay So since you didn’t tell it to date those pay periods differently, what check date gets used?periods differently, what check date gets used?

►That’s right, the regular check date – That’s right, the regular check date – which in this case would be 1/1/2008. which in this case would be 1/1/2008.

FINAL CHECK PERIOD ENDING: 123107

►Uh oh – constructive receipt is in 2007 Uh oh – constructive receipt is in 2007 (12/31/07 to be exact). (12/31/07 to be exact). Okay, but so what?Okay, but so what?

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Having the corrective checks Having the corrective checks dated 1/1/2008 does what?dated 1/1/2008 does what?

►Calculates September, October, and Calculates September, October, and November wages into 2008November wages into 2008

►Double-pays the employeeDouble-pays the employee►Gives you a headache when you try to fix Gives you a headache when you try to fix

itit

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So how do you get those So how do you get those timesheet corrections to timesheet corrections to

calculate into 2007?calculate into 2007? You can’t set the final check period You can’t set the final check period

ending date to anything other than ending date to anything other than December, because then December will December, because then December will calculate into 2008.calculate into 2008.

►Make P050 and related P070 Make P050 and related P070 adjustments on the December screens adjustments on the December screens so it all comes on one check.so it all comes on one check.

Okay, one more thing to Okay, one more thing to consider about the consider about the

Great Date Mate when Great Date Mate when it comes to timesheet it comes to timesheet

corrections in prior pay corrections in prior pay periods.periods.

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If your employee is NOT terminating in If your employee is NOT terminating in December and will have constructive December and will have constructive receipt of their money in 2007, you receipt of their money in 2007, you have the option of setting the Great have the option of setting the Great Date Mate to look at November and Date Mate to look at November and

date the resulting check (even if it isn’t date the resulting check (even if it isn’t a final check) in 2007.a final check) in 2007. Any guesses how? Any guesses how?

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Now, why would you use Now, why would you use 113007 in the 113007 in the field? field?

►Because OSPA does not allow Because OSPA does not allow agencies to add, change, or delete agencies to add, change, or delete December dates on this screen at any December dates on this screen at any time.time.

Side note: This screen must contain Side note: This screen must contain November dates in order to set the November dates in order to set the November corrective on the P190 screen.November corrective on the P190 screen.

FINAL CHECK ISSUED

One More ThingOne More ThingP190 will show months other P190 will show months other than November.than November.

However, the only month that is However, the only month that is open for correction is November. open for correction is November.

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There are two reasons that only There are two reasons that only November can have a November can have a

corrective setcorrective set►The Great Date Mate can look at only one The Great Date Mate can look at only one

pay period at a timepay period at a time►Once November Run 2 has closed, OSPA Once November Run 2 has closed, OSPA

has to be programmed for the upcoming has to be programmed for the upcoming year with period end dates, pay dates, and year with period end dates, pay dates, and cutoff dates. This overrides 2007 for 2008 cutoff dates. This overrides 2007 for 2008 info.info.

You should put any adjustments for other You should put any adjustments for other months on the November screens for a months on the November screens for a continuing employee, or on December continuing employee, or on December screens for a terminating employee.screens for a terminating employee.

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At Year End,At Year End,

P370 Check Dates can P370 Check Dates can be Tricky Devilsbe Tricky Devils

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P370 Sample for 2007P370 Sample for 2007

► When using a check date in 2007, the net pay is $6,105.98.When using a check date in 2007, the net pay is $6,105.98.

P370 OR9999999,99900,123106,123107,O CALCULATION OF CURRENT PAYOFF 370EMPLOYEE, JOSEPHINEINCOME TYPE RATE UNITS AMOUNT TAX /RET AMOUNT DEDUCTIONS AMOUNT TOTAL-R T 8766.66 168.00 8766.66 FIT 1331.09 AHNN001 LONG 55.23AEXCESS O 24.08 SIT 685.00 KDNNAAA KAIS FICA 395.70 KMNNAAA KAIS MEDR 127.46 LCNN UN L 10.00 WCD 2.40 SLYJ001 JUDI STNN001 SHOR 52.60 U3NN020 EMP 1.20

GROSS 8766.66 TX/RT 2541.65 DED 119.03 NET/ACH 6105.98 / .00CALC YTD? N PRINT CHECK? N CORRECTIVE? N SEPARATION CHECK? N CHECK FEE: _3.98COMMENT: ________________________________________ ACCT: 105477 5 15010000850232

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P370 Sample for 2008P370 Sample for 2008

► When using a check date in 2008, the net pay is $5,956.64.When using a check date in 2008, the net pay is $5,956.64.

P370 OR9999999,99900,123106,010208,O CALCULATION OF CURRENT PAYOFF 370EMPLOYEE, JOSEPHINEINCOME TYPE RATE UNITS AMOUNT TAX /RET AMOUNT DEDUCTIONS AMOUNT TOTAL-R T 8766.66 168.00 8766.66 FIT 1331.09 AHNN001 LONG 55.23AEXCESS O 24.08 SIT 685.00 KDNNAAA KAIS FICA 545.03 KMNNAAA KAIS MEDR 127.47 LCNN UN L 10.00 WCD 2.40 SLYJ001 JUDI STNN001 SHOR 52.60 U3NN020 EMP 1.20

GROSS 8766.66 TX/RT 2690.99 DED 119.03 NET/ACH 5956.64 / .00CALC YTD? N PRINT CHECK? N CORRECTIVE? N SEPARATION CHECK? N CHECK FEE: _3.98COMMENT: ________________________________________ ACCT: 105477 5 15010000850232

The difference here is the FICA subject wages. 2007 already reached the maximum, but 2008 has not.

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P370 Date SummaryP370 Date Summary

►Watch check dates. You may get Watch check dates. You may get different calculations depending on different calculations depending on which year you use.which year you use.

►Manual check date should reflect Manual check date should reflect Constructive Receipt dateConstructive Receipt date

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Constructive Receipt Constructive Receipt SummarySummary



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The Great Date Mate The Great Date Mate SummarySummary

► overrides the default overrides the default check date to this datecheck date to this date

►For this pay period only:For this pay period only:►Can override only one pay period at a Can override only one pay period at a

timetime►Allows you to control the Constructive Allows you to control the Constructive

Receipt date printed on a system Receipt date printed on a system checkcheck

FINAL CHECK ISSUED


Questions?Questions?

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OverpaymentsOverpayments

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When/Why Overpayment When/Why Overpayment OccursOccurs

► Late reporting of LWOPLate reporting of LWOP Run 1, employee paid with ‘forecast’ hoursRun 1, employee paid with ‘forecast’ hours Run 2, after ‘actual’ time worked is entered in the system.Run 2, after ‘actual’ time worked is entered in the system.

The employee’s pay is recomputed for the entire The employee’s pay is recomputed for the entire month to determine whether or not there is a month to determine whether or not there is a difference between ‘forecasted’ and ‘actual’ pay. difference between ‘forecasted’ and ‘actual’ pay. (Possibly a terminated employee or employee on (Possibly a terminated employee or employee on LWOP.)LWOP.)

► Delayed pay-related personnel actions.Delayed pay-related personnel actions. Pay-related information (reduced wages, removed lead Pay-related information (reduced wages, removed lead

work, removed work-out-of class, etc.)work, removed work-out-of class, etc.) not entered in the not entered in the PPDB to meet payroll timelines.PPDB to meet payroll timelines.

Employee’s termination date not entered in the PPDBEmployee’s termination date not entered in the PPDB

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When/Why cont’dWhen/Why cont’d

►Administrative errorAdministrative error Deductions not entered until after payroll runs. Deductions not entered until after payroll runs.

(optional insurances; garnishments, etc.)(optional insurances; garnishments, etc.) Vendor deductions removed between Run 1 and Vendor deductions removed between Run 1 and

Run 2 (Do not remove vendor amounts after Run Run 2 (Do not remove vendor amounts after Run 1 on the P070. If you still have possession of 1 on the P070. If you still have possession of vendor check, request a check rewrite to the vendor check, request a check rewrite to the vendor/employee for correct amounts. If the vendor/employee for correct amounts. If the check has already been released, work with check has already been released, work with vendor to send check back or repayment of the vendor to send check back or repayment of the

overpayment to themoverpayment to them..

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Notification to EmployeeNotification to Employee

►An earnings statement that reflects An earnings statement that reflects overpayment is generated which serves overpayment is generated which serves as notice of the overpayment. (Check as notice of the overpayment. (Check stub)stub)

►Agency may have standard letters.Agency may have standard letters.►OSPS web site: OSPS web site:

http://tinyurl.com/298s64http://tinyurl.com/298s64, , slides 63 & slides 63 & 64, gives suggested contents for 64, gives suggested contents for notification.notification.

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Collection of OverpaymentCollection of Overpayment► OAM 45.20.00.POOAM 45.20.00.PO – “Overpayment returns are due and payable – “Overpayment returns are due and payable

on discovery of the overpayment.”on discovery of the overpayment.” Net pay negatives generally are collected from the following Run 1 Net pay negatives generally are collected from the following Run 1

payroll.payroll. When they are not collected on the following Run 1, the Agency must When they are not collected on the following Run 1, the Agency must

reimburse the Joint Payroll Account.reimburse the Joint Payroll Account.► Overpayment example:Overpayment example:

The employee on Run1 ‘forecast’ was paid $1,200.00. On Run The employee on Run1 ‘forecast’ was paid $1,200.00. On Run 2, ‘actual’ hours were entered. The employee’s pay is 2, ‘actual’ hours were entered. The employee’s pay is recomputed for the entire month to determine they had only recomputed for the entire month to determine they had only earned $1,000.00. The Agency is credited with the earned $1,000.00. The Agency is credited with the overpayment of $200.00.overpayment of $200.00.

If the employee has or will repay an overpayment by the end of If the employee has or will repay an overpayment by the end of the year (December 31the year (December 31stst) in which it occurred and this net pay ) in which it occurred and this net pay negative is in negative is in November,November, OSPA will automatically reduce the OSPA will automatically reduce the employee’s December wages. You do not need to make any employee’s December wages. You do not need to make any adjustments.adjustments.

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Collection of Overpayment Collection of Overpayment cont’dcont’d

If the employee is not expected to work/earn enough If the employee is not expected to work/earn enough hours on the next pay period to re-pay this through a hours on the next pay period to re-pay this through a payroll system deduction, you will need to reverse the payroll system deduction, you will need to reverse the entries that created the net pay negative in OSPA, so entries that created the net pay negative in OSPA, so the employee’s wages/taxes are not understated for the the employee’s wages/taxes are not understated for the current year. The Agency is then responsible to collect current year. The Agency is then responsible to collect the net pay negative by working with the Agency’s the net pay negative by working with the Agency’s accounting to establish an account receivable (A/R). accounting to establish an account receivable (A/R).

When the employee does not repay all or part of the When the employee does not repay all or part of the overpayment in the same year it is still taxable for that overpayment in the same year it is still taxable for that year. The employee received and used the funds during year. The employee received and used the funds during the year. When the employee has repaid the full the year. When the employee has repaid the full amount, request a corrected W-2 for the year in which amount, request a corrected W-2 for the year in which the overpayment occurred from the OSPS Accountant the overpayment occurred from the OSPS Accountant (Kathyron Parsons). (Kathyron Parsons).

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Collection of Overpayment Collection of Overpayment cont’dcont’d

Do not make negative P050 entries to Do not make negative P050 entries to correct prior year overpayments; prior correct prior year overpayments; prior year negative entries will understate year negative entries will understate wages for the current tax year. Work wages for the current tax year. Work with your Agency’s accounting staff to with your Agency’s accounting staff to set-up an A/R and request a corrected W-set-up an A/R and request a corrected W-2 when the employee repays the full 2 when the employee repays the full amount. amount.

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Corrected W-2 (W-2c) Corrected W-2 (W-2c) TrainingTraining

►January 30January 30thth and February 27 and February 27thth

►1:15 to 4:15 PM1:15 to 4:15 PM►SFMS Conference Room, Executive SFMS Conference Room, Executive

Building, 155 Cottage St. NEBuilding, 155 Cottage St. NE►[email protected]@das.state.or.us with with

name, agency, phone number, e-mail name, agency, phone number, e-mail address, and manageraddress, and manager

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Check ReversalsCheck Reversals

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Canceling Checks for October Canceling Checks for October and prior PPE’sand prior PPE’s

►Some things to think about.Some things to think about.

►What pay period was the check issued for.What pay period was the check issued for. After November Run 2, checks for October and After November Run 2, checks for October and

prior cannot be canceled. prior cannot be canceled. ►So what do you do if you come across a check So what do you do if you come across a check

that needs to be canceled.that needs to be canceled. If a check for an October or prior pay period If a check for an October or prior pay period

needs to be canceled, contact OSPS to work needs to be canceled, contact OSPS to work through the steps of correcting OSPA before through the steps of correcting OSPA before December run 2.December run 2.

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November and DecemberNovember and December Check Cancellations Check Cancellations

►Thankfully these are a little easierThankfully these are a little easier

►Checks cut for November or December Checks cut for November or December that have a 2007 check date can be that have a 2007 check date can be canceled up until December run 2.canceled up until December run 2.

►If you find you do need to cancel a If you find you do need to cancel a check after December run 2 closes, you check after December run 2 closes, you will need to contact Kathyron Parsons will need to contact Kathyron Parsons to work through the process of to work through the process of creating a corrected W-2.creating a corrected W-2.

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Things to look at when Things to look at when canceling November or canceling November or

December checksDecember checks►Things you may want to considerThings you may want to consider

►Will money be rewritten to the employee?Will money be rewritten to the employee?►For November checks, if money will be rewritten to the For November checks, if money will be rewritten to the

employee, then you may want to consider the next bullet.employee, then you may want to consider the next bullet.► Is the employee terminating in December? If so, Is the employee terminating in December? If so,

are there corrections to the November pay are there corrections to the November pay period?period?

►P010 dates can only be set for one pay period. If the P010 dates can only be set for one pay period. If the employee is terminating in December, you will be setting employee is terminating in December, you will be setting December dates, so any prior corrections will need to be December dates, so any prior corrections will need to be brought forward.brought forward.

► Are there December P010 dates set?Are there December P010 dates set?►If a December check is being canceled and no money is If a December check is being canceled and no money is

to be rewritten to the employee, there may be December to be rewritten to the employee, there may be December P010 dates that need to be removed. P010 dates that need to be removed.

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Fringe Benefits / Expense Fringe Benefits / Expense ReimbursementsReimbursements

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ResourcesResources

►IRS Publications, especially:IRS Publications, especially: 15b Employer’s Tax Guide to Fringe Benefits15b Employer’s Tax Guide to Fringe Benefits FSLG Taxable Fringe Benefit GuideFSLG Taxable Fringe Benefit Guide

►Oregon Accounting ManualOregon Accounting Manual►Statewide HR Policies and Bargaining Statewide HR Policies and Bargaining

AgreementsAgreements►OSPA Reference Manual, Recommended OSPA Reference Manual, Recommended

Practices, Taxes, Reimbursements and Practices, Taxes, Reimbursements and Fringe BenefitsFringe Benefits

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Accountable PlanAccountable Plan

►Non-taxable if following conditions Non-taxable if following conditions are met:are met: Business connection or deductible for Business connection or deductible for

employeeemployee Employee required to provide accounting Employee required to provide accounting

for expensesfor expenses Employee required to return excess Employee required to return excess

allowancesallowances

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Pay TypesPay Types

►Categorized by cash and non-cash, taxable Categorized by cash and non-cash, taxable and non-taxableand non-taxable

►Cash pay types:Cash pay types: Result in a payment to the employee or a vendorResult in a payment to the employee or a vendor Record income as taxable or nontaxableRecord income as taxable or nontaxable

►Non-cash pay types:Non-cash pay types: Record income as taxable or nontaxableRecord income as taxable or nontaxable If taxable, increase withholding without If taxable, increase withholding without

increasing payment to employeeincreasing payment to employee May be required when employee was paid May be required when employee was paid

through accounts payable rather than OSPA through accounts payable rather than OSPA

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Moving Expense Moving Expense ReimbursementReimbursement

►OAM 50.200.00.PO and PR require OAM 50.200.00.PO and PR require payments through OSPApayments through OSPA

►MVN = nontaxable (moving goods and MVN = nontaxable (moving goods and personal effects and traveling)personal effects and traveling)

►MVT = taxable (meals, other expenses)MVT = taxable (meals, other expenses)►May request manual check to pay May request manual check to pay

vendorvendor►If not through OSPA, make P050 entries If not through OSPA, make P050 entries

and a MOVE P070 entryand a MOVE P070 entry

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Personal Use of State Personal Use of State Vehicle Garaged at HomeVehicle Garaged at Home

►OAM 50.30.00.PR requires payment OAM 50.30.00.PR requires payment through OSPAthrough OSPA

►SMN = non-cash taxable value using SMN = non-cash taxable value using cents-per-mile rulecents-per-mile rule

►SVN = non-cash taxable value using SVN = non-cash taxable value using the commuting valuation rulethe commuting valuation rule

►Taxable value included in Box 1 Taxable value included in Box 1 earnings on the W-2 form.earnings on the W-2 form.

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Meal ReimbursementsMeal Reimbursements

►Generally taxable unless provided as part Generally taxable unless provided as part of an overnight stay or: of an overnight stay or: De Minimis (doughnuts, pizza, infrequent)De Minimis (doughnuts, pizza, infrequent) Provided for the convenience of the employerProvided for the convenience of the employer Part of professional organizationPart of professional organization

►Pay types:Pay types: MS = non-cash, taxableMS = non-cash, taxable MSN = cash, non-taxableMSN = cash, non-taxable MST = cash, taxableMST = cash, taxable

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Education ReimbursementsEducation Reimbursements

►OAM 50.10.00.PO and 50.10.00.PR OAM 50.10.00.PO and 50.10.00.PR require payment through OSPArequire payment through OSPA

►Non-taxable if:Non-taxable if: Required by employer or law to keep salary, Required by employer or law to keep salary,

status, jobstatus, job Maintains or improves skills needed in jobMaintains or improves skills needed in job

►EDN = Nontaxable, cash, in-state EDN = Nontaxable, cash, in-state educationeducation

►EDT = Taxable, cash, in-state educationEDT = Taxable, cash, in-state education

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Clothing and ToolsClothing and Tools

►Clothing & Uniforms are non-taxable ifClothing & Uniforms are non-taxable if Condition of employmentCondition of employment Not adaptable to general useNot adaptable to general use Employee substantiates expensesEmployee substantiates expenses

►Uniform cleaning is non-taxable if uniforms Uniform cleaning is non-taxable if uniforms areare

►ANA = clothing allowance, non-cash, taxableANA = clothing allowance, non-cash, taxable►CLA = clothing allowance, cash, non-taxableCLA = clothing allowance, cash, non-taxable►CLT = clothing allowance, cash, taxableCLT = clothing allowance, cash, taxable►CLN = cleaning allowance, cash, taxableCLN = cleaning allowance, cash, taxable

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ToolsTools

► Tools are non-taxable if under an Tools are non-taxable if under an accountable planaccountable plan

► TLA = tool allowance, cash, non-taxableTLA = tool allowance, cash, non-taxable

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2007 Year-End Timeline2007 Year-End Timeline

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November 30, 2007November 30, 2007

►Last pay period for the current year Last pay period for the current year that agencies will be able to set P010 that agencies will be able to set P010 check dates for transferring check dates for transferring employees.employees.

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November Run 2 - 12/10/07November Run 2 - 12/10/07

► For the current year, this is the last date to:For the current year, this is the last date to: Set P010 check dates for months prior to NovemberSet P010 check dates for months prior to November Set correctives for September or October pay periodsSet correctives for September or October pay periods Pay-off any outstanding leave balances for separated Pay-off any outstanding leave balances for separated

employeesemployees►Report E492 Terminated Employees Having Leave BalancesReport E492 Terminated Employees Having Leave Balances►OSPS sends out monthly e-mails regarding issues with OSPS sends out monthly e-mails regarding issues with

this report that are a priority to resolve before year this report that are a priority to resolve before year end.end.

Enter cash payments for expense reimbursements or Enter cash payments for expense reimbursements or fringe benefitsfringe benefits

Reverse checks from pay periods prior to November Reverse checks from pay periods prior to November

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December 31, 2007December 31, 2007

►For 2007, last date to:For 2007, last date to: Pay-off leave balancesPay-off leave balances Accept return of overpaymentAccept return of overpayment Request manual check for:Request manual check for:

►Report E357-030 Separated Employees with Report E357-030 Separated Employees with Net Pay Positive Adjustments (If you get one of Net Pay Positive Adjustments (If you get one of these, the highlighted ones are the ones that these, the highlighted ones are the ones that need to be resolved)need to be resolved)

►Remember the constructive receipt rule? Remember the constructive receipt rule? These funds should be made available to the These funds should be made available to the employee in 2007.employee in 2007.

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January 2, 2008January 2, 2008

►Last date for receiving:Last date for receiving: Updated Form W-5Updated Form W-5

►Report EICRPT - Earned Income Credit Report EICRPT - Earned Income Credit for Tax Yearfor Tax Year

►If you have not received an updated form If you have not received an updated form you will need to modify the P010 screen to you will need to modify the P010 screen to reflect no EIC for the upcoming tax year.reflect no EIC for the upcoming tax year.

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January 2, 2008 (Continued)January 2, 2008 (Continued)

For an Employee Who is Not a “Lawful For an Employee Who is Not a “Lawful Permanent Resident” OSPS Form 99.01 Permanent Resident” OSPS Form 99.01 and Form 8233 or Form W-9and Form 8233 or Form W-9►The OSPS Form 99.01 is on the OSPS The OSPS Form 99.01 is on the OSPS

Forms Web Site under “We have a form Forms Web Site under “We have a form for that” section.for that” section.

►HR offices will hopefully notify the agency HR offices will hopefully notify the agency payroll offices if they have employees that payroll offices if they have employees that need to submit this information.need to submit this information.

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January 2, 2008 (Continued)January 2, 2008 (Continued)

By submitting this form each year your By submitting this form each year your agency payroll office ensures:agency payroll office ensures:►The employee’s current resident statusThe employee’s current resident status►Payroll staff have the necessary and Payroll staff have the necessary and

proper information to process the proper information to process the employee’s taxes for the upcoming tax employee’s taxes for the upcoming tax yearyear

►Prevents having to correct taxes Prevents having to correct taxes retroactive and keeps the employee happyretroactive and keeps the employee happy

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December Run 2 – 1/9/08December Run 2 – 1/9/08

► Last date for 2007 to:Last date for 2007 to: Enter check reversalsEnter check reversals Enter non-cash expense reimbursements or fringe Enter non-cash expense reimbursements or fringe

benefitsbenefits Correct negative YTD amounts from the XREF68Correct negative YTD amounts from the XREF68

► The system will not print a W-2 for an The system will not print a W-2 for an employee with a negative YTDemployee with a negative YTD

Request P060 tax adjustments for separated Request P060 tax adjustments for separated employees with net pay positive adjustmentsemployees with net pay positive adjustments

Record return of overpayment for 2007 for any Record return of overpayment for 2007 for any payment received on or prior to 12/31/07payment received on or prior to 12/31/07

Correct payments from the Nov or Dec Pay Correct payments from the Nov or Dec Pay Reported in Two Tax Years –Receive report at Reported in Two Tax Years –Receive report at year end from OSPSyear end from OSPS

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After December Run 2 – After December Run 2 – 1/11/081/11/08

(Final cutoff is on 1/10/08)(Final cutoff is on 1/10/08)►First date agencies can set P010 First date agencies can set P010

check dates for new tax year 2008check dates for new tax year 2008

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February 15, 2008February 15, 2008

►Last date for receiving updated Form Last date for receiving updated Form W-4 that claims exemption from W-4 that claims exemption from withholding :withholding : Report 370-06-01 Income Tax ExemptionsReport 370-06-01 Income Tax Exemptions If you do not receive an updated form, you If you do not receive an updated form, you

willwill to modify the P010 screen to reflect to modify the P010 screen to reflect Single and Zero (system default) or Single and Zero (system default) or

the previous non-exempt form in the the previous non-exempt form in the employee’s file. (IRS will accept either of employee’s file. (IRS will accept either of these options)these options)

ospa users forum year-end users forum november 16, 2007

Documents

normal check date

constructive receipt

settlement date

great date mate

kind of date

physical check

p010 final check dates

final check period ending