03-P-023 2002 Calendar Year-End Processing (Supersedes 02-P-017 & 02-P-026)
|DATE:||November 25, 2002|
|SUBJECT:||2002 Calendar Year-End Processing|
|CONTACT:||Roger Basinger||(785) email@example.com|
|SUMMARY:||Schedule for Processing Transactions During 2002 Calendar Year-End|
As 2002 calendar year-end approaches, the Division of Accounts and Reports is making preparations for the issuance of calendar year 2002 Wage and Tax Statements (Forms W-2) and Non-Resident Alien Compensation Statements (1042-S). Any 2002 paycheck adjustments processed after the established cut-off dates will update the employee's calendar year 2003 balances; a corrected W-2 (Form W-2C) for 2002 will not be issued for the employee involved.
FINAL 2002 PAYCHECK
The final on-cycle paychecks for calendar year 2002 will be issued December 20, 2002. Paychecks will be mailed on December 19, 2002 and advices will be mailed on December 18, 2002. The final off-cycle paychecks for calendar year 2002 will be issued on December 27, 2002 for the off-cycle processed on December 23, 2002.
Any 2002 paychecks that are undeliverable should be reversed as soon as possible. After proper authorization SHARP agencies have until 6:00 p.m. on December 23, 2002 to enter paycheck reversals; paper user agencies should submit Form DA-180, 'SHARP Paycheck Reversal/Adjustment/Supplemental', for any paycheck reversals by 12:00 noon on December 23, 2002. Any reversal requests entered/received after the 6:00 p.m./12:00 noon deadline on December 23, 2002 will update calendar year 2003 balances and will not be reflected in the employee's 2002 W-2.
PAYCHECK ADJUSTMENTS AND SUPPLEMENTALS
SHARP agencies have until 6:00 p.m. on December 23, 2002 to enter paycheck adjustment requests for any 2002 paychecks. Adjustments processed in the December 23, 2002 off-cycle payroll will be reflected on the employee's 2002 Form W-2. Please remember that only one adjustment can be processed per employee per off-cycle; this applies to agency entered adjustments, supplementals and centrally entered adjustments. If a 2002 paycheck has been previously adjusted and requires additional adjustment, form DA-180, 'SHARP Paycheck Reversal/Adjustment/Supplemental', should be submitted to the Division of Accounts and Reports, Payroll Section by 5:00 p.m. on Monday, December 16, 2002. The December 16, 2002 deadline for submitting Form DA-180 also applies to all adjustment requests for paper user agencies.
Payroll Services staff will make every effort to process all DA-180 forms submitted by 5:00 p.m. on December 16, 2002 for inclusion in the December 23, 2002 off-cycle. However, if a large volume of DA-180 forms is received on the December 16, 2002 cut-off date, Payroll Services cannot guarantee that all forms will be processed as calendar year 2002 business. Agencies can assist in the processing effort by submitting any DA-180 forms and the completed attachment as soon as you become aware a centrally entered adjustment is needed.
Adjustment requests entered after December 23, 2002 which are adjusting paychecks issued prior to January 1, 2003 will not result in a W-2C; the adjustment will update the employee's 2003 payroll balances regardless of the reason the paycheck is being adjusted. Likewise, any supplemental requests that are entered either by agencies or centrally by Payroll Services after December 23, 2002 will update the employee's 2003 payroll balances.
REGENTS' INSTITUTIONS: ON-CYCLE FILES
Regent on-cycle files for the pay period ending December 7, 2002, paid December 20, 2002 are due to the Department of Administration by 6:00 am on December 13, 2002.
REGENTS' INSTITUTIONS: OFF-CYCLE FILES
2002 Paycheck Reversals
Regent Institutions must submit all transmittals for 2002 paycheck reversals by 5:00 p.m. on Friday, December 20, 2002 in order to update the employee's 2002 W-2. These files should contain a 'C' indicating current year business and the pay adjust check date field should contain the original check issue date for the paycheck being reversed. Any paycheck reversals submitted after this date will update the employee's calendar year 2003 payroll balances regardless of the paycheck issue date of the paycheck being reversed. Reversals for paychecks issued prior to January 1, 2003 submitted after 5:00 pm on December 20, 2002 should default the pay adjust check date to January 1, 2003.
2002 Adjustments and Supplementals
In order to update employee balances for 2002, any paycheck adjustments and supplementals must be submitted no later than 5:00 p.m. on Friday, December 20, 2002. The off-cycle for the pay period ending December 7, 2002 generated on the night of Monday, December 23, 2002 will have a check issue date of December 27, 2002; all activity for this off-cycle will be reflected in the employees' 2002 W-2. These files should contain a 'C' indicating current year business. For supplementals and salary underpayments, the pay adjust check date should be blank; for all other adjustment types, the pay adjust check date field should contain the original paycheck issue date of the paycheck being adjusted and the date must be a 2002 date.
2003 Adjustments and Supplementals
With the exception of arrearages or refunds for OASDI and or Medicare for tax years prior to 2003, any adjustments or supplementals submitted after 5:00 p.m. on Friday, December 20, 2002, will be considered to be 2003 business regardless of the pay period end date to which the pay is related. Since this activity will be considered calendar year 2003 business, the employee's 2003 balances will be updated. These files should contain a 'C' indicating current year business and the pay adjust check date should be a 2003 date (regardless of the original paycheck issue date of the paycheck being adjusted -- if the original check date was prior to January 1, 2003, agencies should default the pay adjust check date to January 1, 2003).
With the exception of OASDI and/or Medicare tax refunds or arrearages for tax years prior to 2003, Regents institutions may continue to submit adjustments and supplementals throughout the month of January 2003 regardless of the original pay period ending date of the paycheck being adjusted. The activity will be processed on the regular Monday and every other Wednesday off-cycle schedule and will update 2003 payroll balances.
Arrearages or refunds for OASDI and or Medicare taxes for prior calendar years and limited to those adjustments resulting from a change in Social Security status must be submitted on separate payroll interface files. These files should contain a 'P' indicating prior year business and the pay adjust check date field should contain the original check issue date of the paycheck being adjusted. Prior year OASDI and/or Medicare arrearages/refunds are the only situations in which a prior year indicator of 'P' should be used; payroll interface files for any other type of adjustments which contain a prior year indicator of 'P' will be rejected and will not be processed.
Any prior year OASDI and/or Medicare refunds/arrearages identified after the December 23, 2002 deadline will not be processed until the January 27, 2003 off-cycle payroll. Since the files will be held, please do not begin submitting those files for processing until the week of January 20, 2003. The deadline for submitting payroll interface files for the January 27, 2003 off-cycle is 5:00 p.m. on January 24, 2003.
The deduction END date on the general deduction panel for 2002 United Way contributions should be dated between December 8, 2002 and December 21, 2002 in order for the last 2002 deduction to be taken on the paycheck issued December 20, 2002. Agencies should verify the deduction end date for all employees enrolled in United Way to ensure deductions are taken correctly. For calendar year 2003, agencies can enter a new row effective-dated between December 8, 2002 and December 21, 2002 in order for the first deduction for 2003 to be taken on the January 3, 2003 paycheck. If the 2003 deduction is to be taken over 26 pay periods, a deduction end date of December 7, 2003 should be entered.
The Department of Administration will be updating the SHARP federal and state tax data records on December 16, 2002, for all employees currently claiming exemption from withholding; the tax data record updates will be effective January 1, 2003. On-line agencies must enter a new effective-dated row into SHARP for employees who wish to claim exemption from withholding for calendar year 2003. Paper user agencies should submit an employee data sheet to the Division of Personnel Services for employees who wish to claim exemption from withholding in 2003. The new tax data row should be effective January 2, 2003. To ensure that no federal tax withholding occurs on the January 3, 2003 paycheck, the tax data row dated January 2, 2003 should be entered between December 16, 2002 and December 27, 2002. The Division of Accounts and Reports will provide a listing to agencies which will identify all employees whose withholding tax status was updated on December 16, 2002. The listing will include the department, employee ID, name, SSN, and withholding exempt status.
A new-effective dated row will also be added in the SHARP federal tax data records on December 16, 2002 for employees with a special tax withholding status of 'Non-Resident Alien' to reflect that no 8233 form has yet been submitted for calendar year 2003. The new tax data row will be dated January 1, 2003. Payroll Services will update the 8233 indicator on the tax data records once a form 8233 for calendar year 2003 has been submitted. A listing will not be provided for the 'Non-Resident Alien' updates, since reports are generated periodically throughout the calendar year to identify employees who have had non-resident alien earnings reported but who do not have a current 8233 form on file in Payroll Services.
The Department of Administration will also update existing SHARP federal tax data records on December 16, 2002 for all employees claiming the Earned Income Credit in 2002 to reflect the Earned Income Credit status of 'Not applicable'. The tax record updates are effective January 1, 2003. On-line agencies must enter a new effective-dated row into SHARP for employees who wish to claim the Earned Income Credit in calendar year 2003; paper agencies should submit an employee data sheet to the Division of Personnel Services for employees who wish to claim the Earned Income Credit in 2003. To ensure that the Earned Income Tax Credit occurs on the January 3, 2003 paycheck, the tax data row dated January 2, 2003 should be entered between December 16, 2002 and December 27, 2002. The Division of Accounts and Reports will provide a listing to agencies, which identifies all employees whose Earned Income Credit status was updated in SHARP on December 16, 2002. The listing includes department, employee ID, name, SSN, and EIC exempt status.
The 2002 Forms W-4 and W-5 will be posted to the Accounts and Reports website as soon as they are available from the IRS.
All deductions for calendar year 2003 are biweekly except:
- Group Health Insurance: semi-monthly, deducted on the first and second paydates of the month.
- Health Care Flexible Spending Accounts: semi-monthly, deducted on the first and second paydates of the month.
- Dependent Care Flexible Spending Accounts: semi-monthly, deducted on the first and second paydates of the month.
- Long Term Care: monthly, deducted on the first paydate of the month.
- Optional Group Life Insurance: monthly, deducted on the second paydate of the month.
Every effort should be made to collect all arrearage balances either by personal reimbursement or paycheck deduction prior to the cut-off date of December 23, 2002 (December 16, 2002 for paper user agencies). Please refer to the most recent KPAY007, 'Deductions in Arrears Report' and evaluate all existing arrearages for your agency and verify that collection will be made; agencies should continue monitoring the KPAY007 reports to determine collections will be made by calendar year-end. For sufficiently large balances that cannot be collected in one sum, agencies should establish a deduction override as soon as possible so paycheck deductions can be made and the balance collected by the cut-off date for year-end processing. Also, as adjustments are processed from now until the end of the year, please monitor any new arrearage balances and collect in an expedient manner. Any arrearage collections made by personal reimbursement that are collected after December 13, 2002, and prior to December 23, 2002, must be sent to the Division of Accounts and Reports, Payroll Section for processing in order to impact the 2002 W-2.
One of the changes implemented at the time of the v7.0 SHARP upgrade is the advance ('ADV') earnings being paid to employees in situations where the employee's earnings are not sufficient to cover certain deductions. 'ADV' earnings are taxable wages at the time the earnings are paid; taxable wages are then reduced when the advance is collected ('ADVNCE' deduction). Any 'ADV' earnings paid to an employee in calendar year 2002 will increase the employees' W-2 taxable wages if the earnings are not collected by the end of the calendar year. Agencies should collect any outstanding advances for payroll periods ending before December 7, 2002 by personal reimbursement as soon as possible. All 'ADV' earnings paid to employees on the on-cycle paychecks dated December 20, 2002 (i.e., on-cycle for the payroll period ending December 7, 2002) should be collected by personal reimbursement to avoid the advance from being included in the employee's 2002 Form W-2.
As noted in Informational Circular No. 03-P-014 dated October 3, 2002, one change that should be noted is the address that will be used for mailing the W-2 forms. If an employee has a mailing address on the SHARP panel Personal Data 1, the mailing address will be used for mailing the W-2. If the employee has no mailing address, then the home address will be used for mailing the W-2. In the past, home address was always used for the W-2 form. If a mailing address is deleted in Administer Workforce/Personal Data go to maintain Payroll Data/Payroll Data and click on the home address radio button. Since the majority of employees do not have a mailing address and the home address will continue to be used when the mailing address is blank, this change does not affect a large number of employees. Please make any name, address, or social security number changes to this panel by 5:00 pm on December 27, 2002 to guarantee the updated information is included in the W-2 data. However, since this panel is not effective dated, the information on the panel as of the day the final W-2 data is loaded will be the data reflected on the W-2 form. This final load may take place anytime between December 27, 2002 and January 15, 2003.
Regent's Institutions should make their name, address, and social security number changes by submitting them through the management reporting interface by 5:00 p.m. on December 27, 2002.
W-2 forms will be mailed on or before January 31, 2003. A message will appear on the SHARP message panel to advise agencies of the W-2 mailing date in January.
Attached is a calendar for the month of December 2002 that highlights the key payroll processing activity. This calendar does not provide the same level of detail as that provided in this informational circular or in the SHARP bi-weekly payroll schedules issued under Informational Circular No. 03-P-013, dated September 30, 2002. The attached calendar is intended for use as a supplementary reference tool to this informational circular.
Please make note of the above payroll processing dates and adjust your schedules accordingly. If, in order to ensure the timely issuance of payroll, it becomes necessary to change any of the processing dates identified above, notification of the change will be provided to all state agencies via the SHARP on-line message panel and the SHRP web site (http://www.da.ks.gov/sharp/). On-line agencies should be reviewing the SHARP message panel on a daily basis to determine if new messages have been added. Paper-user agencies will be notified of any changes to these dates via telephone.
Attachment: December 2002 Payroll Calendar (.pdf)