01-P-015 Parking Compensation Reduction Program (Supersedes 01-P-011)
|DATE:||November 22, 2000|
|SUBJECT:||Parking Compensation Reduction Program|
|EFFECTIVE DATE:||Payroll Period Beginning December 10, 2000 and Ending December 23, 2000, Paid January 5, 2001|
|CONTACT:||Elaine Harris||(785) 296-7458||(email@example.com)|
|SUMMARY:||Pre-Tax Parking Payroll Deduction (Revised to Include Impact on UCI gross)|
The State of Kansas Parking Compensation Reduction Program established pursuant to Section 132 of the Internal Revenue Code and K.S.A. 75-5535 was approved by the Secretary of Administration on July 28, 2000. The purpose of the Program is to provide a parking compensation reduction program that results in payment of parking fees by state employees for state owned or leased parking facilities (including the Signature Building) on a pre-tax basis. The Program authorizes employees to participate in a pre-tax parking payroll deduction where the amount of the parking deduction is not included in gross income. As a result, the employee does not pay employment taxes for federal withholding, state withholding, OASDI, and Medicare on the compensation reduction amount or parking fee and the unemployment compensation insurance (UCI) gross will be reduced by the compensation reduction amount or parking fee.
In addition to parking administered by the Division of Facilities Management (DFM) or leased by the Department of Administration, other state owned or leased parking facilities may be included in the Program. Regents Institutions and other state agencies interested in having their owned or leased parking facilities in the Program should address inquiries to DFM Parking Administration and submit documentation showing the ownership or lease of the parking facilities desired for inclusion in the Program. The Program requires payroll deductions pursuant to K.S.A. 75-5535. Parking deductions pursuant to state agency payroll deduction plans authorized by K.S.A. 75-5536 do not qualify for the Program.
This Program will be administered in accordance with Section 132 of the Internal Revenue Code, and any regulations promulgated thereunder, and K.S.A. 75-5535, by the Division of Facilities Management (DFM) with the advice and approval of the Director of Accounts and Reports. Savings resulting from the reduction in employer paid FICA contributions will be paid to the Department of Administration for administration of the Program. Except for parking at Board of Regents institutions, the employer contribution deduction will be distributed 4.65% for Division of Facilities Management and 3.0% for the Division of Accounts and Reports. For parking administered by Board of Regents institutions, the employer contribution will be distributed 1.0% for the Regents institution, 2.5% for the Division of Accounts and Reports and 4.15% for the Division of Facilities Management.
The Program will utilize the "negative election permitted" approach. This means that employees who have parking payroll deductions in place under K.S.A. 75-5535 will automatically be enrolled in the pretax program unless the employee elects not to participate. DFM Parking Administration is responsible for notifying such employees of the opportunity to not participate in the Program. Elections not to participate shall be effective at the beginning of the next payroll period following the date the election not to participate is received by DFM Parking Administration or received by the affected Regents institution parking administration office in the case of Regents parking.
The salary reduction is a fixed dollar amount as stated on the signed parking contract for the parking facility. In the event the rates change, advanced notice will be given to affected employees who will have the option to elect not to participate. The Program will be provided on a bi-weekly basis that coincides with payroll periods and will be automatically renewed for subsequent periods until a timely election not to participate is received. Compensation reduction amounts are not refundable unless a timely election not to participate is received.
- The following new general deduction codes will be established in SHARP to implement parking on a pre-tax basis for SHARP employees:
- The following new general deduction codes will be established in SHARP to implement the employer contribution for pre-tax parking for SHARP employees:
|PPKAD1||$0.35 ($4.62 X .0765)|
|PPKAD2||$0.74 ($9.70 X .0765)|
|PPKAD3||$0.39 ($5.08 X .0765)|
Conversion to New Codes - General deduction records for all SHARP employees currently enrolled in parking will be updated with the appropriate deduction end date and two new effective-dated rows with the new parking codes (employee and employer). The conversion to the new codes will occur in SHARP on December 18, 2000. All active SHARP employees with an existing parking deduction will be enrolled in the pre-tax parking program effective December 10, 2000.
- Future Maintenance - After the initial enrollments have been made in SHARP, the Division of Facilities Management will be responsible for adding and updating the employee and employer deduction codes for pre-tax parking for new enrollments, changes, and deletions.
- The Division of Accounts and Reports, Payroll Systems Team is responsible for making the necessary updates to the SHARP payroll system.
- The attached spreadsheet outlines the new funding that will be used for the Program.
- The following new general deduction codes will be established in SHARP to implement parking deductions for Regents on a pre-tax basis:
|Deduction Code||Regents Institution|
|PPKS01||Wichita State University|
|PPKL01||University of Kansas|
|PPKM01||Kansas State University|
|PPKE01||Emporia State University|
|PPKP01||Pittsburg State University|
|PPKK01||University of Kansas Medical Center|
|PPKH01||Fort Hays State University|
- Regents should continue to use the 'AGYPAY' deduction code to collect parking fees from their employees on an after-tax basis in the following situations:
- for those parking facilities which are not state owned or leased, or
- for employees who elect NOT to participate in the pre-tax program for those lots that are state owned or leased.
- Only one pre-tax deduction code will be established for each participating Regents institution. Regents institutions having multiple parking lots with differing rates can establish additional pre-tax parking codes as needed in their payroll system. However, the codes should be 'rolled up' and reported on the Regents paydetail file using the appropriate pre-tax parking general deduction code assigned.
- A new general deduction code PPKADR will be established in SHARP to implement the employer contribution for pre-tax parking for Regents' employees.
- The attached spreadsheet outlines the new funding that will be used for the Program
- Regents institutions are responsible for ensuring these changes are reflected in their individual systems.
For questions about business process design or to submit a test file please contact Nancy Ruoff, Payroll Services at (785) 296-5369 or firstname.lastname@example.org.
Questions about remittance or accounting information may be directed to Myrene Bears, Payroll Services at (785) 296-5368 or email@example.com.
Other questions about the Parking Compensation Reduction Program may be directed to Ken Bartel, Facilities Management at (785) 296-1318 or firstname.lastname@example.org.
Attachment: SHARP Pre-Tax Parking Funding (.pdf format)