FY 2009

DATE:	July 30 , 2008
SUBJECT:	Change in Organization Dues Deduction for Pittsburg State University – Kansas National Education Association #30
EFFECTIVE DATE:	Payroll Period Ending August 23, 2008
CONTACT:	Janice Wolfley	(785) 296-3699	janice.wolfley@da.ks.gov
APPROVAL:
SUMMARY:	Organization Dues Changes for ORG030

The organization dues for members of the Pittsburg State University, Kansas National Education Association, deduction code ‘ORG030’, will change from $26.85 to $27.45 per biweekly payroll period. The new rate will become effective with the payroll period beginning August 10, 2008 and ending August 23, 2008, paid September 5, 2008.

The Division of Accounts and Reports, Payroll Systems Team is responsible for making this change in the SHARP system. Regent’s institutions are responsible for ensuring this change is reflected in their individual systems and is effective for paychecks issued on or after September 5, 2008.

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DATE:	August 20 , 2008
SUBJECT:	Addition of Earnings Codes for Kansas Mentors Program
EFFECTIVE DATE:	August 24, 2008
CONTACT:	Earl Brynds	(785) 296-5375	earl.brynds@da.ks.gov
APPROVAL:
SUMMARY:	Addition of Earnings Codes ‘KMP’ and ‘KME’

Executive Order 08-10 establishes the Kansas Mentors Program which provides a way for interested State of Kansas employees to volunteer their time as a mentor to help Kansas children.
All full-time, classified and unclassified employees in the Executive Branch are eligible to spend up to 90 minutes of regularly scheduled work time per pay period for the purpose of working with any program which is part of the Kansas Mentors Gold Star program.

To administer the Kansas Mentors Program, two new earnings codes will be established in the SHARP system effective August 24, 2008. The following earnings codes are eligible to be used starting with the pay period beginning August 24, 2008 through September 6, 2008 paid September 19, 2008.

KMP should be used for Hourly employees and counts toward FLSA/Overtime. KME should be used for salaried employees. Both earnings codes count toward leave accrual (hours in pay status for leave accrual purposes).

The Division of Accounts and Reports, Payroll Systems Team, is responsible for adding these new earnings codes in the SHARP system. Regents’ institutions are responsible for implementing the new earnings codes in their payroll systems.

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DATE:	August 27, 2008
SUBJECT:	SHARP Bi-Weekly Payroll Schedule for 2009
EFFECTIVE DATE:	Calendar Year 2009
CONTACT:	Earl Brynds	(785) 296-5375	earl.brynds@da.ks.gov
APPROVAL:
SUMMARY:	SHARP On-cycle and Off-cycle Payroll Processing Schedules for 2009

Attached are the finalized SHARP bi-weekly on-cycle and off-cycle schedules for calendar year 2009. The attached schedules provide important information regarding the critical payroll processing deadlines for each bi-weekly payroll period. Agency personnel responsible for payroll processing will need to ensure that all appropriate information is entered or submitted by the cutoff dates indicated on the schedules to ensure timely issuance of pay for their employees.

SHARP off-cycle payrolls will generally be processed each Monday and every other Wednesday night and will include all activity entered into SHARP since the last off-cycle payroll. If a holiday occurs on a Monday or Wednesday, the off-cycle payroll will normally be rescheduled to occur on the following business day. Payroll payments resulting from the first off-cycle for the payroll period (Run ‘A’) will normally be issued with the same paycheck/direct deposit date as the on-cycle pay date for the payroll period. Payroll payments resulting from the remaining off-cycles (Runs ‘B’ and ‘C’) will normally be dated three working days from the date the off-cycle is processed. SHARP agencies generally have until 6:00 p.m. on Mondays and every other Wednesday to enter adjustments and/or supplemental data into SHARP for processing in that night’s off-cycle payroll.

Off-cycle payrolls for Regents’ institutions are also normally scheduled for each Monday and every other Wednesday night. Regents’ institutions generally have until 5:00 p.m. on Fridays and every other Tuesday to submit off-cycle payroll interface files. The Division of Accounts and Reports must approve all interface files for processing by 5:00 p.m. on the following Monday or every other Wednesday for the files to be processed in that night’s off-cycle payroll. Regents’ off-cycle payrolls will be issued with the same check/advice date as the SHARP off-cycle processed the same night.

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Attachment: Bi-Weekly Payroll Schedule for ON-cycle Calendar Year 2009 (pdf)

                    Bi-Weekly Payroll Schedule for OFF-cycle Calendar Year 2009 (pdf)

DATE:	September 24, 2008
SUBJECT:	KOSE Enrollment/Cancellation Processing
EFFECTIVE DATE:	Immediately
CONTACT:	John Yeary Lori Kitch	(785) 296-2033 (785) 354-1174	john.yeary@da.ks.gov lkitch@koseunion.org
APPROVAL:
SUMMARY:	Enrollment and Cancellation Processing for KOSE Members

The Kansas Organization of State Employees (KOSE) conducts membership drives throughout the year. Normally, enrollment forms are completed and submitted directly to KOSE by the employee. KOSE then forwards copies of the enrollment forms to John Yeary in the Labor Relations office of the Department of Administration for entry into SHARP. Under normal processing procedures for KOSE enrollment forms, agencies will not receive copies of the authorization/cancellation forms.

If, for any reason, agency personnel receive a KOSE enrollment/cancellation form directly from an employee, the agency should forward the form to the KOSE office at the following address:

KOSE
1301 SW Topeka Boulevard
Topeka, KS 66612

KOSE will then forward the form to Labor Relations for SHARP entry.

Questions regarding an employee’s payroll deduction for KOSE should be directed to John Yeary using the contact information noted above.

The enrollment/cancellation procedures outlined above apply only to enrollment/cancellation forms for KOSE. The procedures for enrollment/cancellation forms for all other employee organizations remain unchanged.

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DATE:	September 29, 2008
SUBJECT:	Gift Card Interface File and FBN Processing
EFFECTIVE DATE:	Immediately
CONTACTS:	Eric Strate, KHPA Joyce Dickerson, A&R	(785) 291-3546 (785) 296-3979	eric.strate@khpa.ks.gov joyce.dickerson@da.ks.gov
APPROVAL:
SUMMARY:	Interface File and Fringe Benefit Income Processing for the HealthQuest Personal Health Assessment Gift Cards

Kansas Health Policy Authority (KHPA) HealthQuest implemented a program for plan year 2008 that included the incentive of a $50 Gift Card for completing the HealthQuest Personal Health Assessment (PHA). As noted in previous communications from KHPA, if participating employees do not select a gift card of their choice by October 31, 2008, a gift card will be chosen for them.

The Gift Card Award is a taxable fringe benefit to the plan participant for the total of all gift cards selected by or for the plan participant and their eligible dependent(s). For State employees and their eligible dependents, the taxes on the fringe benefit income will be deducted from the participating employee’s paycheck. Fringe Benefit Income is added to, and reported in, gross wages on the W-2.

For active State employees paid through SHARP, an interface will be processed to generate the necessary fringe benefit income (‘FBN’) earnings for inclusion on the employee’s 11/14/08 paycheck. Each agency will receive a report in their agency mailbox on the MVS which lists all employees in the agency who had ‘FBN’ earnings added to their 10/19/08 – 11/01/08 timesheet.

The following procedures will be used for State employees paid through SHARP who have left State employment since the completion of the gift card requirements:

1.  KHPA will receive an error listing of all fringe benefit income earnings that could not be     updated to employee time records through the interface process (employee termed/retired, incorrect data, etc.)

2.  KHPA will contact individual agencies to resolve all errors generated due to retired/terminated employees, incomplete data, etc.

3.  For terminated/retired employees, agency personnel must complete the following steps:

• • Agency personnel must complete a pay affecting adjustment to the employee’s most current paycheck in the current calendar year that has not been previously adjusted and does not contain a garnishment or specific earnings codes (see further information regarding Agency Payroll Adjustment here.)

• • If agency personnel are unable to perform the adjustment due to garnishments or previous adjustments to the paycheck, the agency must submit a completed form DA-180, Paycheck Reversal/Adjustment/Supplemental for central processing by the Division of Accounts and Reports Payroll Services Team. Instructions for requesting a Centrally Entered Adjustment can be found here.

Once entered, processing the adjustment to create the Fringe Benefit Income for a retired or terminated employee will create an employee arrearage for the amount of the employee tax liability on the fringe benefit income. It is at the agency’s discretion to either work to recover the amount of this arrearage from the individual employee, or to write-off the amount of the employee arrearage. Further information on the policies and procedures regarding uncollectible arrearages can be located at: : Info Circ 00-p-020 - Salary Overpayments and Outstanding Arrearages.

The HealthQuest Personal Health Assessment (PHA) program with the gift card incentive is scheduled to be offered again by Kansas Health Policy Authority (KHPA) HealthQuest in Plan Year 2009. Currently, a bi-weekly interface process has been proposed to provide the data necessary for SHARP and Regent agencies to generate the necessary fringe benefit income (‘FBN’) earnings for calendar year 2009 on a regular basis.

All questions regarding the gift card program and interfaces should be directed to Eric Strate, Kansas Health Policy Authority at (785) 291-3546. The Division of Accounts and Reports will be responsible for processing the interface file to update time sheets with the fringe benefit income earnings for active State employees and for processing DA-180 forms submitted by agencies for entry of adjustments which could not be processed by the agency. Questions regarding the processing of adjustments can be directed to Joyce Dickerson, Division of Accounts and Reports, Payroll Services at (785) 296-3979. Regent institutions will be provided an interface file from KHPA for their agency and are responsible for the generation of the necessary fringe benefit income transactions for their employees as well as any adjustment transactions for terminated or retired employees.

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DATE:	October 3, 2008
SUBJECT:	Addition of New Health Savings Accounts/Plan Carriers and Non- Tobacco User Discount
EFFECTIVE DATE:	Pay Period Beginning December 14, 2008; Ending December 27, 2008; Paid January 9, 2009
CONTACT:	Earl Brynds	(785) 296-5376	earl.brynds@da.ks.gov
APPROVAL:
SUMMARY:	Addition of New Health Savings Accounts/Plan Carriers and Non- Tobacco User Discount for Group Health Insurance Plan Year 2009

For Plan Year 2009, the Health Care Commission approved the addition of two new Health Savings Account (HSA) benefit options for each employee participating through the State of Kansas health insurance program in a Qualified High Deductible Health Plan (QHDHP) and making the required employee contribution to a Health Savings Account. In addition to the current QHDHP offered through Coventry Healthcare, employees will be eligible to enroll in a QHDHP offered through Preferred Health Systems and United Healthcare. American Chartered Bank is the custodian for United Healthcare participants and HealthEquity is the custodian for Preferred Health Systems participants.

For all three QHDHP benefit options, the HSA annual employer contribution amounts for full-time employees will be $900 for single coverage and $1350 for dependent coverage. For part-time employees, they will be $675 for single coverage and $1012.56 for dependent coverage.

For all employees except 9-month paid employees at Regents Institutions, the agency GHI composite rate cost for the QHDHP benefit options will be reduced by the amount of the HSA employer contribution and the HSA employer contribution will be added as a flat employer contribution to the HSA benefit setup tables in SHARP. Both GHI and HSA employer contributions will be charged to Object Code 1950.

For 9-month paid Regent employees (16 deductions), the HSA employer contribution cost will be paid by the agency in addition to the full agency GHI composite rate cost. Regent agencies will then request a journal voucher reimbursement of the amount of their agency HSA employer contributions from the Kansas Health Policy Authority on a monthly, quarterly, or annual basis.

To accommodate the new HSA plans, new deduction codes will be added in SHARP effective for the payroll period beginning December 14 and ending December 27, 2008, paid January 9, 2009.

The new deduction codes for Preferred Health Systems are:

All employees except Regent 9-month:

Regent 9-month (16deductions):

The Division of Accounts and Reports, Payroll Services Section will remit the employee and employer monies to HealthEquity for all agencies.

The new deduction codes for United Healthcare are below.

All employees except Regent 9-month:

Regent 9-month (16deductions):

The Division of Accounts and Reports, Payroll Services Section will remit the employee and employer monies to American Chartered Bank for all agencies. The KPAYHSA2 remittance report for all three Health Savings Accounts is available in the agency MVS directories.

Effective 12/14/08, the following additions to the Fund/Index combination will be completed for the Department of Administration clearing fund for the new Health Savings Account Deductions:

In addition, index code 9666 has been added to the STARS system for United Healthcare and index code 9667 has been added to the STARS system for Preferred Health Systems for each of the Regent’s Payroll Funds (98XX) to record the receipt of the new HSA options’ employer contribution by the individual Regent’s institutions. Attached is an updated copy of the “Index Codes for Agency and DOA Clearing Funds”. This document has been updated for the changes noted above and replaces the document issued with Informational Circular 08-P-031 dated May 7, 2008.

NEW CARRIER/PLAN ADDITIONS

For Plan Year 2009, the Health Care Commission approved United Healthcare as a new medical provider. Employees are eligible to enroll in United Healthcare for Plan A, Plan B and the QHDP. In addition, employees are eligible to enroll in the new QHDP now offered by Preferred Health Systems.

Effective 12/14/08, the following additions to the Fund/Index combination will be completed for the Department of Administration clearing fund for the new carrier and plans:

The attached document “Index Codes for Agency and DOA Clearing Funds” has also been updated for the new index codes noted above. In addition, new deduction codes will be added in SHARP effective for the payroll period beginning December 14 and ending December 27, 2008, paid January 9, 2009. Attached is document “Deduction Codes for Group Health Insurance Plan Year 2009” showing the deduction codes established in SHARP for the new carrier and plans.

NON-TOBACCO USER DISCOUNT

For Plan Year 2009, the Health Care Commission approved a $ 20.00 per pay period non-tobacco user discount for all medical plans. Employees must complete a tobacco certification during Open Enrollment to receive the discount. To implement this discount, new deduction codes will be added in SHARP effective for the payroll period beginning December 14 and ending December 27, 2008, paid January 9, 2009. Attached is document “Deduction Codes for Group Health Insurance Plan Year 2009” showing the new deduction codes established for the non-tobacco user discount.

The Division of Accounts and Reports, Payroll Systems Team will make changes to the SHARP payroll system to implement the new Health Savings Account benefit options, new Carrier/Plans deduction codes and the new deduction codes for the Non-Tobacco User discount. Regent’s institutions are responsible for ensuring that the new Health Savings Account benefit options, new Carrier/Plan deduction codes and the new deduction codes for the Non-Tobacco User discount are available in their individual systems. In addition, Regent’s institutions should be prepared to test their benefits interface and payroll files for the new deductions by November 1, 2008.

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Attachments:

Index Codes for Agency and DOA Clearing Funds

Deduction Codes for Group Health Insurance Plan Year 2009

DATE:	October 8, 2008
SUBJECT:	Key Payroll Processing Dates in November 2008
EFFECTIVE DATE:	November 2008
CONTACT:	Joyce Dickerson	(785) 296-3979	joyce.dickerson@da.ks.gov
APPROVAL:
SUMMARY:	Payroll processing schedule changes due to the November 2008 holidays.

Tuesday, November 11, 2008 (Veterans' Day), Thursday, November 27, 2008 and Friday, November 28, 2008 (Thanksgiving Holiday) are designated holidays for state service in 2008.

Due to the holidays in November, variations have been made to the ‘normal’ payroll processing schedule. Agencies are asked to note the payroll processing schedule due dates, some of which are occurring on a different day of the week than normally scheduled.

Monday, November 3, 2008

The Run C off-cycle for the period ending October 18, 2008 will be processed November 3, 2008. SHARP agencies have until 6:00 PM on this date to enter supplemental and/or adjustment run controls for the Run C off-cycle. Paychecks for the Run C off-cycle will be
dated November 6, 2008.

Time and leave interface agencies must have time and leave files for the period ending November 1, 2008 submitted to the Department of Administration for processing by 5:00 PM on November 3, 2008.

Tuesday, November 4, 2008

Paysheets for the on-cycle payroll for the period ending November 1, 2008 will be created on Tuesday, November 4, 2008. All job actions (i.e., promotions, terminations, new hires, leave of absences, step increases, etc.) must be entered by 6:00 PM on November 4, 2008 in order to be reflected on the paysheets for this period.

The first on-cycle preliminary pay calculation for the period ending November 1, 2008 will also occur November 4, 2008; therefore, all time and leave data should be entered into SHARP and designated ‘OK to process’ by 6:00 PM.

Wednesday, November 5, 2008

The second on-cycle preliminary pay calculation for the period ending November 1, 2008 will occur November 5, 2008.

Thursday, November 6, 2008

The third on-cycle preliminary pay calculation for the period ending November 1, 2008 will occur November 6, 2008.

Regents’ on-cycle payroll files for the period ending November 1, 2008 are also due to the Department of Administration by 6:00 AM on November 6, 2008. (These files would normally be due Friday, November 7, 2008.)

Friday, November 7, 2008

Final pay confirmation for the on-cycle payroll for the period ending November 1, 2008 will occur November 7, 2008. All employees’ time and leave records must be ‘OK to Process’ by 6:00 PM on November 7, 2008 in order for a paycheck record to be created. All deduction and tax data changes must be entered by 6:00 PM on November 7, 2008 in order to be reflected in the final paycheck created for the employee.

Regents’ Run A off-cycle payroll files for the period ending November 1, 2008 must be received by the Department of Administration by 5:00 PM on November 7, 2008.

Sunday, November 9, 2008

The Regents’ on-cycle files for the period ending November 1, 2008 will be processed.

Monday, November 10, 2008

The Run A off-cycle for the period ending November 1, 2008 will be processed November 10, 2008. Paychecks for the Run A off-cycle will be dated November 14, 2008.

Regents’ Run B off-cycle payroll files for the period ending November 1, 2008 must be received by the Department of Administration by 5:00 PM on November 10, 2008 in order to be processed on Wednesday, November 12, 2008. (These files would normally be due Tuesday, November 11, 2008)

Encumbrance transactions for the SHARP on-cycle payroll for the period ending November 1, 2008 will be posted to STARS during Monday night's STARS batch processing cycle. (This process would normally occur Tuesday, November 11, 2008.)

Tuesday, November 11, 2008
Veterans' Day Holiday

Wednesday, November 12, 2008

The Run B off-cycle for the period ending November 1, 2008 will be processed November 12, 2008. SHARP agencies have until 6:00 PM on this date to enter supplemental and/or adjustment run controls for the Run B off-cycle. Paychecks for the Run B off-cycle will be dated November 17, 2008.

Thursday, November 13, 2008

Time and leave interface agencies must have time and leave files for the period ending November 15, 2008 submitted to the Department of Administration for processing by 5:00 PM on November 13, 2008. (These files would normally be due Monday, November 17, 2008.)
 

Friday, November 14, 2008

Payday for the payroll period ending November 1, 2008.

Regents’ Run C off-cycle payroll files for the period ending November 1, 2008 must be received by the Department of Administration by 5:00 PM on November 14, 2008.

Monday, November 17, 2008

Paysheets for the on-cycle payroll for the period ending November 15, 2008 will be created on Monday, November 17, 2008. All job actions (i.e., promotions, terminations, new hires, leave of absences, step increases, etc.) must be entered by 6:00 PM on November 17, 2008 in order to be reflected on the paysheets for this period. (Paysheets would normally be created on Tuesday, November 18, 2008.)

The first on-cycle preliminary pay calculation for the period ending November 15, 2008 will also occur November 17, 2008, rather than Tuesday, November 18, 2008; therefore, all time and leave data should be entered into SHARP and designated ‘OK to process’ by 6:00 PM November 17, 2008. Please note that there will be only two SHARP on-cycle preliminary payroll calculations for the pay period ending November 15, 2008.

The Run C off-cycle for the period ending November 1, 2008 will be processed November 17, 2008. SHARP agencies have until 6:00 PM on this date to enter supplemental and/or adjustment run controls for the Run C off-cycle. Paychecks for the Run C off-cycle will be dated November 20, 2008.

Tuesday, November 18, 2008

The second on-cycle preliminary pay calculation for the period ending November 15, 2008 will occur November 18, 2008.

Wednesday, November 19, 2008

Final pay confirmation for the on-cycle payroll for the period ending November 15, 2008 will occur November 19, 2008. (Final pay confirmation would normally occur Friday, November 21, 2008). All employees’ time and leave records must be ‘OK to Process’ by 6:00 PM on November 19, 2008 in order for a paycheck record to be created. All deduction and tax data changes must be entered by 6:00 PM on November 19, 2008 in order to be reflected in the final paycheck created for the employee.

Regents’ on-cycle payroll files for the period ending November 15, 2008 are due to the Department of Administration by 6:00 AM on November 19, 2008. (These files would normally be due Friday, November 21, 2008.)

Thursday, November 20, 2008

Regents’ Run A off-cycle payroll files for the period ending November 15, 2008 must be received by the Department of Administration by 5:00 PM on November 20, 2008. (These files would normally be due Friday, November 21, 2008.) The Regents’ on-cycle files for the period ending November 15, 2008 will be processed.

Friday, November 21, 2008

The Run A off-cycle for the period ending November 15, 2008 will be processed November 21, 2008. (This off-cycle would normally be scheduled for Monday, November 24, 2008.) Paychecks for the Run A off-cycle will be dated November 26, 2008.

Monday, November 24, 2008

Encumbrance transactions for the SHARP on-cycle payroll for the period ending November 15, 2008 will be posted to STARS during Monday night's STARS batch processing cycle. (This process would normally occur Tuesday, November 25, 2008.)

Tuesday, November 25, 2008

Regents’ Run B off-cycle payroll files for the period ending November 15, 2008 must be received by the Department of Administration by 5:00 PM on November 25, 2008.

Wednesday, November 26, 2008

Payday for the payroll period ending November 15, 2008. (It would normally be Friday, November 28, 2008)

The Run B off-cycle for the period ending November 15, 2008 will be processed November 26, 2008. SHARP agencies have until 6:00 PM on this date to enter supplemental and/or adjustment run controls for the Run B off-cycle. Paychecks for the Run B off-cycle will be dated December 3, 2008. (Paychecks would normally be dated Monday, December 1, 2008.)

Regents’ Run C off-cycle payroll files for the period ending November 15, 2008 must be received by the Department of Administration by 5:00 PM on November 26, 2008. (These files would normally be due Friday, November 28, 2008.)

Thursday, November 27, 2008
Thanksgiving Holiday

Friday, November 28, 2008
Thanksgiving Holiday

Attached is a calendar for the month of November 2008, which highlights key payroll processing activity for the month. The attached calendar is intended for use as a supplementary reference tool only; it does not contain the level of detail that is included in the narrative portion of this circular.

Please note the changes to the payroll processing schedule and adjust your schedules accordingly. If it becomes necessary to change any of the payroll processing dates identified above, notification of the change will be provided to all subscribers of the SHARP Infolist. SHARP users interested in subscribing to the Infolist, but who have not yet done so, can subscribe at http://da.state.ks.us/sharp/infolist.htm.

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Attachment: November 2008 Payroll Calendar (pdf)

DATE:	October 14, 2008
SUBJECT:	Change in Organization Dues Deduction Amounts
EFFECTIVE DATE:	Payroll Period Ending October 18, 2008
CONTACT:	Janice Wolfley	(785) 296-3699	janice.wolfley@da.ks.gov
APPROVAL:
SUMMARY:	Organization Dues Changes for KAPE

The Board of Directors for the Kansas Association of Public Employees (KAPE) has advised that the regular biweekly dues for members of KAPE will be changing effective with the payroll period beginning October 5, 2008 and ending October 18, 2008, paid October 31, 2008 as follows:

The Division of Accounts and Reports, Payroll Systems Team will make the necessary updates to the payroll system to affect all SHARP employees enrolled in the above KAPE dues deductions. Regent’s institutions are responsible for ensuring that these changes are reflected on all paychecks issued on or after October 31, 2008.

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DATE:	October 20, 2008
SUBJECT:	Change in Social Security Base Rate
EFFECTIVE DATE:	January 1, 2009
CONTACT:	Sunni Zentner	(785) 296-7058	sunni.zentner@da.ks.gov
APPROVAL:
SUMMARY:	Social Security Wage Base Increase to $106,800 effective January 1, 2009

The Social Security wage base for OASDI will be $106,800 for calendar year 2009. This is a $4,800 increase from the 2008 wage base of $102,000. The OASDI tax rate remains at 6.2% for both employees and employers. The maximum OASDI employee contribution for 2009 will be $6,621.60. There continues to be no limit on wages subject to the Medicare tax in 2009. Medicare tax rates for employers and employees remain at 1.45%.

For Federal employees at Kansas State University who were hired prior to January 1, 1984, the employee contribution rate for reduced FICA remains at 1.45 % on all wages subject to the tax (there has been no maximum contribution since January 1, 1994). Federal employees hired after January 1, 1984 will have a maximum contribution of $6,621.60 for OASDI and no maximum for Medicare. The employer and employee rates continue to be the same.

For Kansas Police and Fireman’s program participants who are subject to the mandated Medicare coverage, the contribution rate remains at 1.45% on all wages subject to the tax (there has been no maximum contribution since January 1, 1994).

The Division of Accounts and Reports, Payroll Systems Team is responsible for making the necessary updates to the SHARP payroll system. Regents’ institutions are responsible for ensuring these changes are reflected in their individual systems.

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DATE:	October 23, 2008
SUBJECT:	Deferred Compensation and Voluntary Tax Sheltered Annuity Limits for Calendar Year 2009
EFFECTIVE DATE:	January 1, 2009
CONTACT:	Janice Wolfley	(785) 296-3699	janice.wolfley@da.ks.gov
	Sunni Zentner	(785) 296-7058	sunni.zentner@da.ks.gov
APPROVAL:
SUMMARY:	2009 Deferred Compensation and Tax Sheltered Annuity Limits

Pursuant to the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), the annual Deferred Compensation and Tax Sheltered Annuity (TSA) limits will change effective January 1, 2009 as follows:

457(b) Deferred Compensation:

The Deferred Compensation (Benefit Plan 457DEF) annual contribution limit is increased from the lesser of $15,500 or 100% of includible compensation (2008 calendar year limit) to the lesser of $16,500 or 100% of includible compensation.

The Deferred Compensation special catch-up (Benefit Plan 457DER) limit is increased from $31,000 (2008 calendar year limit) to $33,000.  The special catch-up limit is twice the general deferral limit, and is only available to employees who are within three years of normal retirement age.

The Deferred Compensation catch-up provision for participants who are 50 years of age or older (Benefit Plan 457DEC) increases the annual contribution limit by $5,500 for 2009 to a total of $22,000.  The increase for 2008 was $ 5,000 to a total of $ 20,500.

Please note that the two different catch-up provisions cannot be used concurrently.

403(b) Tax Sheltered Annuities (TSA):

The limit on annual contributions to a TSA for 2009 is the lesser of $49,000 or 100% of compensation, increased from $46,000 for 2008.

The annual compensation limit used for calculating mandatory employee and employer contributions is increased from $230,000 (for 2008) to $245,000 (for 2009).  The $245,000 applies to the mandatory retirement plans for the School of the Blind, School for the Deaf, and Kansas Board of Regents (for employees whose participation began after 1995).  For School of the Blind and School of the Deaf employees, the maximum contribution that can be made to the plan is $24,500 ($245,000 maximum annual compensation multiplied by 10%, 5% employer contribution and 5% employee contribution).  For Board of Regents employees (participants after 1995), the maximum contribution that can be made to the plan is $34,300 ($245,000 maximum annual compensation multiplied by 14%, 8.5% employer contribution and 5.5% employee contribution).

For employees participating in the Kansas Board of Regents’ mandatory plan prior to 1996, participants are ‘grandfathered’ and use the annual compensation limit under Internal Revenue Code Section 401(a) (17).  The 401(a) (17) limit is increased from $345,000 (for 2008) to $360,000 (for 2009).  However, participants should note their maximum annual compensation limit will be $350,000, since the $350,000 annual compensation multiplied by the 14% contribution rate (8.5% for the employer and 5.5% for the employee), results in $49,000, which is the limit on annual contributions.

The limit on elective deferrals (Voluntary Tax Sheltered Annuities) is increased from $15,500 for 2008 to $16,500 for 2009.  The age 50 or older catch-up provision is increased from $5,000 for 2008 to $5,500 for 2009.  Therefore, an employee age 50 or over is eligible to increase their elective deferral and limit on an annual contribution by $5,500.   Additionally, there is a 15-year rule which may allow employees with 15 or more years of service to increase the elective deferral limit by an additional $3,000.  Employees may use both the age 50 catch-up provision and 15-year rule concurrently.  IRS regulations issued in 2003 state that when employees are eligible for both the 15-year rule and the age 50 catch-up provision, the limit on elective deferrals ($16,500 for 2009) is applied first, then the 15-year rule, and finally the age 50 catch-up provision.

Please note that the total of nonelective deferrals (the mandatory retirement plans) and elective deferral (VTSA) cannot exceed the limit on annual contributions plus the age 50 or older catch-up provision amount (if applicable).

Regents’ institutions are reminded that they are responsible for applying the maximum VTSA formulas for their employees.  Please note that this circular only provides a summary of the law in this area.  Due to the complexity of the legislation and the unique circumstances of each employee, Regents’ institutions are strongly encouraged to contact the 403(b) carriers to aid in determining limits in those cases which are outside the norm (the employee is near the limit on annual contributions, the employee is near the elective deferral limit, the employee wants to use the age 50 catch-up provision, or the employee wants to use the 15-year rule).

Finally, the EGTRRA Act of 2001 repealed the coordination requirements for employees who participate in both a 457(b) Deferred Compensation Plans and 403(b) Tax Sheltered Annuity plans.  Employees eligible for both plans continue to be able to defer the full amount to both plans.

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DATE:	November 21, 2008
SUBJECT:	Changes to the Payroll Processing Schedule for the Payroll Periods Ending December 13, 2008 and December 27, 2008
EFFECTIVE DATE:	Immediately
CONTACT:	Joyce Dickerson	(785) 296-3979	Joyce.Dickerson@da.ks.gov
APPROVAL:
SUMMARY:	Changes to the payroll processing schedule for the payroll periods ending December 13, 2008 and December 27, 2008 due to December 26, 2008 being designated a state holiday

As a result of Governor Sebelius declaring Friday, December 26, 2008 as an additional state holiday for 2008, the following changes have been made to the December payroll processing schedule for the payroll periods ending December 13, 2008 and December 27, 2008:

Friday, December 12, 2008

Payday for the payroll period ending November 29, 2008.

Time and leave interface agencies must have time and leave files for the period ending December 13, 2008 submitted to the Department of Administration for processing by 5:00 PM on December 12, 2008. (These files would normally be due Monday, December 15, 2008.)

Monday, December 15, 2008

The Run 'C' off-cycle for the payroll period ending November 29, 2008 continues to be scheduled for December 15, 2008. The check issue date for the Run 'C' off-cycle will remain Thursday, December 18, 2008.

Paysheets for the on-cycle payroll for the period ending December 13, 2008 will be created on Monday, December 15, 2008. All job actions (i.e. promotions, terminations, new hires, leave of absences, step increases, etc.) must be entered by 6:00 p.m. on December 15, 2008 in order to be reflected on the paysheets for this period. (Paysheets would normally be created on Tuesday, December 16, 2008.)

The first on-cycle preliminary pay calculation for the period ending December 13, 2008 will also occur December 15, 2008, rather than Tuesday, December 16, 2008; therefore, all time and leave data should be entered into SHARP and designated ‘OK to Process’ by 6:00 p.m. December 15, 2008. Please note that there will only be two SHARP on-cycle preliminary payroll calculations for the pay period ending December 13, 2008.

Tuesday, December 16, 2008

The second on-cycle preliminary pay calculation for the period ending December 13, 2008 will occur December 16, 2008.

Wednesday, December 17, 2008

Final pay confirmation for the on-cycle payroll for the period ending December 13, 2008 will occur December 17, 2008. (Final pay confirmation would normally occur Friday, December 19, 2008). All employees’ time and leave records must be ‘OK to Process’ by 6:00 PM on December 17, 2008 in order for a paycheck record to be created. All deduction and tax data changes must be entered by 6:00 PM on December 17, 2008 in order to be reflected in the final paycheck created for the employee. The check issue date for the on-cycle will be Wednesday, December 24, 2008. (It would normally be Friday, December 26, 2008.)

Regents’ on-cycle payroll files for the period ending December 13, 2008 are due to the Department of Administration by 6:00 AM on December 17, 2008. (These files would normally be due Friday, December 19, 2008.)

Thursday, December 18, 2008

The Regents’ on-cycle files for the period ending December 13, 2008 will be processed. (These files would normally be processed on Saturday, December 20, 2008.)

Regents’ Run ‘A’ off-cycle payroll files for the period ending December 13, 2008 must be received by the Department of Administration by 5:00 pm. on December 18, 2008 in order to be processed on Friday, December 19, 2008. (These files would normally be due Friday, December 19, 2008.)

Friday, December 19, 2008

The Run ‘A’ off-cycle for the period ending December 13, 2008 will be processed December 19, 2008. (This off-cycle would normally be on Monday, December 22, 2008.) SHARP agencies have until 6:00 p.m. on this date to enter supplemental and/or adjustment run controls for the Run ‘A’ off-cycle. Paychecks for the Run ‘A’ off-cycle will be dated Wednesday, December 24, 2008, rather than Friday, December 26, 2008.

Tuesday, December 23, 2008

Regents’ Run ‘B’ off-cycle payroll files for the period ending December 13, 2008 must be received by the Department of Administration by 5:00 pm. on December 23, 2008 in order to be processed on Wednesday, December 24, 2008.

Wednesday, December 24, 2008

Payday for the payroll period ending December 13, 2008. (It would normally be Friday, December 26, 2008)

The Run 'B' off-cycle for the payroll period ending December 13, 2008 continues to be scheduled for December 24, 2008. The check issue date for the Run 'B' off-cycle will be changed to Wednesday, December 31, 2008. (Checks would normally be dated Monday, December 29, 2008.)

Time and leave interface agencies must have time and leave files for the period ending December 27, 2008 submitted to the Department of Administration for processing by 5:00 PM on December 24, 2008. (The interface was originally scheduled on December 26, 2008.)

Thursday, December 25, 2008
Christmas Holiday

Friday, December 26, 2008
Christmas Holiday

Monday, December 29, 2008

Paysheets for the on-cycle payroll for the period ending December 27, 2008 will be created on Monday, December 29, 2008. All job actions (i.e. promotions, terminations, new hires, leave of absences, step increases, etc.) must be entered by 6:00 p.m. on December 29, 2008 in order to be reflected on the paysheets for this period. (Paysheets would normally be created on Tuesday, December 30, 2008.)

The first on-cycle preliminary pay calculation for the period ending December 27, 2008 will also occur December 29, 2008, rather than Tuesday, December 30, 2008; therefore, all time and leave data should be entered into SHARP and designated ‘OK to Process’ by 6:00 p.m. December 29, 2008.

The Run 'C' off-cycle for the payroll period ending December 13, 2008 continues to be scheduled for December 29, 2008. The check issue date for the Run 'C' off-cycle will remain Friday, January 2, 2009.

Attached is a revised calendar for the month of December 2008 that highlights these payroll processing schedule changes due to the December 26th additional holiday. The informational circular for key payroll processing dates in December for calendar year end activities will be released at a later date. The attached calendar is intended for use as a supplementary reference tool only; it does not contain the level of detail that is included in the narrative portion of this informational circular.

Please note the changes to the payroll processing schedule and adjust your schedules accordingly. If it becomes necessary to change any of the processing dates identified above, notification of the change will be provided to all subscribers of the SHARP Infolist. SHARP users interested in subscribing to the Infolist, but who have not yet done so, can subscribe at http://da.ks.gov/sharp/infolist.htm.

Attachment: December 2008 calendar pdf

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DATE:	November 25, 2008
SUBJECT:	December 2008 Payroll Processing
EFFECTIVE DATE:	Immediately
CONTACT:	Joyce Dickerson	(785) 296-3979	Joyce.Dickerson@da.ks.gov
APPROVAL:
SUMMARY:	December 2008 Payroll Processing

As 2008 calendar year-end approaches, the Division of Accounts and Reports is making preparations for the issuance of calendar year 2008 Wage and Tax Statements (Forms W-2) and Non-Resident Alien Compensation Statements (1042-S). Any 2008 paycheck adjustments processed after the established cut-off dates will update the employee’s calendar year 2009 balances; a corrected W-2 (Form W-2C) for 2008 will not be issued for the employee involved.

FINAL 2008 PAYCHECK

The final on-cycle paychecks for calendar year 2008 will be issued December 24, 2008. Paychecks will be mailed on December 23, 2008. Encumbrances for the December 24, 2008 on-cycle paychecks will process in STARS on Monday night, December 22, 2008. The final off-cycle paychecks for calendar year 2008 will be issued on December 31, 2008 (generated from the off-cycle processed on December 24, 2008).

PAYCHECK REVERSALS

Any 2008 paychecks that are undeliverable should be reversed as soon as possible. SHARP agencies have until 6:00 p.m. on December 24, 2008 to enter paycheck reversals. Any reversals entered after the 6:00 p.m. deadline on December 24, 2008 will update calendar year 2009 balances and will not be reflected in the employee’s 2008 W-2.

PAYCHECK ADJUSTMENTS AND SUPPLEMENTALS

SHARP agencies have until 6:00 p.m. on December 24, 2008 to enter paycheck adjustment requests for any 2008 paychecks. Adjustments processed in the December 24, 2008 off-cycle payroll will be reflected on the employee’s 2008 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 2008 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 Wednesday, December 17, 2008.

Payroll Services staff will make every effort to process all DA-180 forms submitted by 5:00 p.m. on December 17, 2008 for inclusion in the December 24, 2008 off-cycle. However, if a large volume of DA-180 forms is received on the December 17, 2008 cut-off date, Payroll Services cannot guarantee that all forms will be processed as calendar year 2008 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 24, 2008 which are adjusting paychecks issued prior to January 1, 2009 will not result in a W-2C; the adjustment will update the employee’s 2009 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 24, 2008 will update the employee’s 2009 payroll balances.

REGENTS’ INSTITUTIONS: ON-CYCLE FILES

Regent on-cycle files for the pay period ending December 13, 2008, paid December 24, 2008 are due to the Department of Administration by 6:00 a.m. on December 17, 2008.

REGENTS’ INSTITUTIONS: OFF-CYCLE FILES

2008 Paycheck Reversals

Regent Institutions must submit all transmittals for 2008 paycheck reversals by 5:00 p.m. on Tuesday, December 23, 2008 in order to update the employee’s 2008 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 2009 payroll balances regardless of the paycheck issue date of the paycheck being reversed. Reversals for paychecks issued prior to January 1, 2009 submitted after 5:00 p.m. on December 23, 2008 should default the pay adjust check date to January 1, 2009.

2008 Adjustments and Supplementals

In order to update employee balances for 2008, any paycheck adjustments and supplementals must be submitted no later than 5:00 p.m. on Tuesday, December 23, 2008. The Run B off-cycle for the pay period ending December 13, 2008 generated on the night of Wednesday, December 24, 2008 will have a check issue date of December 31, 2008; all activity for this off-cycle will be reflected in the employees’ 2008 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 2008 date.

2009 Adjustments and Supplementals

With the exception of arrearages or refunds for OASDI and/or Medicare for tax years prior to 2009, any adjustments or supplementals submitted after 5:00 p.m. on Tuesday, December 23, 2008, will be considered to be 2009 business regardless of the pay period end date to which the pay is related. Since this activity will be considered calendar year 2009 business, the employee’s 2009 balances will be updated. These files should contain a ‘C’ indicating current year business and the pay adjust check date should be a 2009 date (regardless of the original paycheck issue date of the paycheck being adjusted -- if the original check date was prior to January 1, 2009, agencies should default the pay adjust check date to January 1, 2009).

With the exception of OASDI and/or Medicare tax refunds or arrearages for tax years prior to 2009, Regents institutions may continue to submit adjustments and supplementals throughout the month of January 2009 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 2009 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, 2008 deadline for the December 24, 2008 Run B’s off-cycle payroll will not be processed until the January 20, 2009 off-cycle payroll. Since the files will be held, please do not begin submitting those files for processing until the week of January 12, 2009. The deadline for submitting payroll interface files for the January 20, 2009 off-cycle is 5:00 p.m. on Friday, January 16, 2008.

GENERAL REMINDERS

United Way and Community Health Charities

The deduction END date on the general deduction page for 2008 United Way or Community Health Charities contributions should be dated between December 14, 2008 and December 27, 2008 in order for the last 2008 deduction to be taken on the paycheck issued December 24, 2008. Agencies should verify the deduction end date for all employees enrolled in United Way and/or Community Health Charities to ensure deductions are taken correctly. For calendar year 2009, agencies can enter a new row effective-dated between December 14, 2008 and December 27, 2008 in order for the first deduction for United Way or Community Health Charities for 2009 to be taken on the January 9, 2009 paycheck. If the deduction is to be taken over 26 pay periods, a deduction end date of December 13, 2009 should be entered.

Tax Information

Pursuant to IRS regulations, all employees claiming an exemption from federal withholding
and/or the advanced Earned Income Credit (EIC) must file a new W-4 and/or W-5 each calendar
year. To facilitate this requirement, an email notification will be sent on December 3, 2008 to all SHARP employees who are exempt from federal withholding and/or who are receiving advanced
EIC payments. Notifications will be sent to the employee’s email address listed under ‘Update
My Profile’ in the Employee Self Service Center at: https://sharp.ks.gov/psp/ESS/?cmd=login. Notifications will be sent to the agency payroll supervisor email address for those employees who lack an individual email address, and agencies will need to distribute the notifications to their employees. For agency payroll/human resource staff, a worklist will be created that will identify these employees. The worklist will be sent on December 3rd to the agency staff that has been designated as the “agency payroll workflow administrator” through the SHARP security roles. The worklist can be accessed two ways in SHARP: from the Home page, click on Worklist under the Menu on the left side of the screen, or click on Worklist on the top right side of the screen next to Home. For each employee on the worklist, your agency should contact the person to ensure the appropriate action is taken so that the desired tax status is in effect for 2009. If your agency has no employees claiming an exemption from federal withholding and/or advanced EIC, the worklist will be empty.

SHARP employees are encouraged to use the Employee Self Service functionality to file their 2009 W-4s. Employees should continue to submit Form W-5 for the Earned Income Credit to their agency Payroll/Personnel Office. Employees should submit the new W-4s and W-5s by December 16, 2008 to allow adequate time for processing.

Agency personnel have until 6:00 p.m. on December 22, 2008 to enter all paper W-4s and W-5s into the system. Agency personnel are reminded that they also need to check the radio buttons ‘New W-4 Received’ and/or ‘New W-5 Received’ on the employee’s ‘Federal Tax Data’ panel in SHARP for the effective-dated row they enter. Agency Workflow Administrators also need to check the radio button ‘New W-4 Received’ on the electronic W-4s submitted by the employee for calendar year 2009.

The KPAY320 will be processed the evening of December 22, 2008. This process searches for all employees for whom a W-4/W-5 email notification has been sent. If a new W-4 and/or W-5 has not been received, a January 1, 2009 effective-dated row will be placed in the Employee Tax Data record. The January 1, 2009 effective-dated row will update the employee’s marital status to ‘single’ with zero exemptions and/or stop any advance EIC payments for paychecks with a 2009 pay date.

For any 2009 W-4s (for employees claiming exemption from withholding) and/or W-5s received between December 22, 2008 and January 1, 2009, agency personnel will need to enter the data with a January 2, 2009 effective date. Agency Workflow Administrators will also need to change the effective date to January 2, 2009 for any electronic W-4s received in this time period.

The KPAY320 will only insert new effective-dated rows for federal withholding tax. Employees should be advised to also review their state tax withholding to determine if changes are needed. Employees working in Kansas will need to complete a new form K-4 to make any needed state tax withholding change. See A&R Informational Circular 08-P-011 issued October 25, 2007 for information pertaining to the use of Form K-4. The 2009 Forms W-4 and W-5 will be posted to the Accounts and Reports website as soon as they are available from the IRS.

The KPAY320 will also enter a new-effective dated row in the SHARP federal tax data records on December 22, 2008 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 2009. The new tax data row will be dated January 1, 2009. Payroll Services will update the 8233 indicator on the tax data records once a form 8233 for calendar year 2009 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.

Deduction Information

All deductions for calendar year 2009 are biweekly except:

• Group Health Insurance: semi-monthly, deducted on the first and second pay dates of the month.
• Health Care Flexible Spending Accounts: semi-monthly, deducted on the first and second pay dates of the month.
• Dependent Care Flexible Spending Accounts: semi-monthly, deducted on the first and second pay dates of the month.
• Optional Group Life Insurance: monthly, deducted on the second pay date of the month.
• Health Savings Accounts: semi-monthly, deducted on the first and second pay dates of the month.

Arrearages/Advances

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 24, 2008. Please refer to the most recent PAY007, ‘Deductions in Arrears Report’ and evaluate all existing arrearages for your agency and verify that collection will be made; agencies should continue monitoring the PAY007 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 17, 2008, and prior to December 24, 2008, must be sent to the Division of Accounts and Reports, Payroll Section for processing in order to impact the 2008 W-2.

Agencies are reminded that advance (‘ADV’) earnings are 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 2008 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 13, 2008 by personal reimbursement as soon as possible.

W-2s

Please note that if an employee has an active mailing address on the SHARP Personal Information/ Modify a Person/ Contact Information page, the mailing address will be used for mailing the W-2. If the employee has no active mailing address, then the home address will be used for mailing the W-2. Since the majority of employees do not have a mailing address, most W-2's will continue to be mailed to the employee's home. Please make any name, address, or social security number changes to the employee’s Contact Information page by 6:00 p.m. on December 29, 2008 to guarantee the updated information is included in the W-2 data. Although SHARP agencies have until December 29, 2008 to update the Contact Information page, it is strongly recommended that these changes be made as soon as they are known. 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 24, 2008. Since the W-2 form can only accommodate 30 characters in Address 1 and Address 2, please limit your employees’ address lengths. Abbreviations should be used as needed to stay within the limit.

The W-2 programs will be executed anytime between December 29, 2008 and January 5, 2009. W-2 forms will be mailed on or before January 31, 2009. Notification of the W-2 mailings will be provided to all subscribers of the SHARP Infolist.

December Calendar

Attached is a revised calendar for the month of December 2008 that highlights the key payroll processing activity. This calendar does not provide the same level of detail as that provided in this informational circular. The attached calendar is intended for use as a supplementary reference tool to this informational circular.

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 subscribers of the SHARP Infolist. SHARP users interested in subscribing to the Infolist, but who have not yet done so, can subscribe at http://da.ks.gov/sharp/infolist.htm.

Attachment: December 2008 calendar pdf

KEO:NTR:kao

DATE:	December 1, 2008
SUBJECT:	One-time Exception to Arrearage Collection Procedures
EFFECTIVE DATE:	Immediately
CONTACT:	Joyce Dickerson	(785) 296-3979	Joyce.Dickerson@da.ks.gov
APPROVAL:
SUMMARY:	One-time exception to minimum collection procedures for Gift Card Arrearages less than or equal to $25

Informational Circular 00-P-020 identifies the minimum collection procedures required before an arrearage can be determined to be uncollectible. A one-time exception to these procedures has been granted by the Director of Accounts and Reports only for the arrearages less than or equal to $25 created due to the recent adjustments required to record the fringe benefit income for the gift cards received for completion of the Personal Health Assessment. For arrearages less than or equal to $25 which were created as a result of a gift card fringe benefit transaction, it is at the agency’s discretion to choose to either pursue collection from the employee or write off the arrearage amount. The write off can be accomplished by immediately notifying the Director of Accounts and Reports of the arrearages which should be written off based on the agency determination that it is not cost effective to pursue recovery for the arrearage. For all non-gift card arrearages, and for all gift card arrearages greater than $25, the policies and procedures of Informational Circular 00-P-020 remain in effect.

KEO:NTR:ccl

DATE:	December 2, 2008
SUBJECT:	Employee Taxability of State-Owned or Leased Vehicles
EFFECTIVE DATE:	January 1, 2009
CONTACT:	Cindy Lo	(785) 296-2259	cindy.lo@da.ks.gov
APPROVAL:
SUMMARY:	IRS Changes Cents-Per-Mile Valuation Rule for Calendar Year 2009

The Internal Revenue Service (IRS) has decreased the standard mileage rate from 58.5 cents to 55 cents beginning January 1, 2009 under the Cents-Per-Mile method of valuing an employee’s personal (commuting) use of a state-owned or leased vehicle. The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The Cents-Per-Mile valuation is one of several methodologies that can be used to calculate fringe benefit income. See Informational Circular No. 05-P-023*. Using this methodology, fringe benefit income is calculated by multiplying the 55 cents rate by the number of personal (commuting) miles driven by the employee in the state-owned or leased vehicle. To be eligible to use the Cents-Per-Mile method, at least 50% of the vehicle’s total mileage is used for the employer’s trade or business, or the vehicle is primarily used by employees and the total mileage for the vehicle exceeds 10,000 miles per year. The Cents-Per-Mile method may not be used for ‘luxury’ vehicles. If a vehicle is first made available to an employee for personal (commuting) use in calendar year 2009 and the agency wishes to use the Cents-Per-Mile method, the fair market value of the vehicle cannot exceed $15,000. Agencies and employees are also reminded that the only personal use of a state-owned or leased vehicle allowed under state law is to commute between the employee’s work station and home, and then in only limited situations.

Please note that this Informational Circular does not impact the State’s privately owned vehicle mileage reimbursement rate.

*Informational Circular No. 05-P-023 contains an incorrect K.A.R. reference number in the next to the last paragraph of the POLICY section. The reference should be: Kansas Administrative Regulation 1-17-2a(b)(1).

KEO:NTR:ccl

DATE:	December 5, 2008
SUBJECT:	2009 Percentage Method Tables for Federal Tax Withholding
EFFECTIVE DATE:	January 1, 2009
CONTACT:	Sunni Zentner	(785) 296-7058	sunni.zentner@da.ks.gov
APPROVAL:
SUMMARY:	New Federal Withholding Tax Tables Effective for Paychecks Issued On or After January 1, 2009.

The Internal Revenue Service (IRS) has issued new tables for the percentage method of withholding for 2009. The attached tables are to be used in computing federal tax withholding for wages paid on or after January 1, 2009. In order to use the attached tables, income must be annualized. To annualize income, multiply federal taxable income for the current bi-weekly pay period by the twenty-six pay periods in the year. In addition, the value of one withholding allowance is increased to $3,650 for 2009.

IRS regulations continue to require employees claiming exempt status from federal tax withholding (for income earned in the United States) to file a new W-4 form annually. Employees are eligible for the exempt status if the following criteria are met: 1) the employee had no income tax liability in the previous years, and 2) the employee anticipates no income tax liability in the upcoming year.

An e-mail notification was sent on December 3, 2008 to all SHARP employees who were exempt from federal withholding in 2008. The notification reminded employees that a new W-4 must be submitted to continue the federal tax withholding exempt status for 2009. The notification was sent to the employee’s e-mail address listed under ‘Update My Profile’ in the Employee Self Service Center at https://sharp.ks.gov/psp/ESS/?cmd=login. Agencies will need to distribute notifications to their employees who lack an individual e-mail address.

SHARP employees are encouraged to use the Employee Self Service functionality to file their 2009 W-4s. As of this date, the IRS has not issued the 2009 Form W-4 - Employee’s Withholding Allowance Certificate. Once the W-4 becomes available, notification will be sent to subscribers of the SHARP Infolist. SHARP users interested in subscribing to the Infolist, but who have not yet done so, can subscribe at http://da.ks.gov/SHARP/infolist.htm. Employees should submit their new W-4s by December 16, 2008 to allow adequate time for processing. Agency personnel have until 6:00 p.m. on December 22, 2008 to enter all paper W-4s into the system. It is important that agency personnel check the ‘New W-4 Received’ radio button on the employee’s ‘Federal Tax Data 1’ page in SHARP for the effective-dated row that is entered. Agency Workflow Administrators also need to check the ‘New W-4 Received’ radio button on electronic W-4s submitted by the employee for calendar year 2009.

The KPAY320 will process during the batch cycle generated on the evening of December 22, 2008. This process will search for employees for whom a W-4 notification was sent. If a new W-4 has not been received, a January 1, 2009 effective-dated row will be placed in the employee’s Tax Data record, and will update the employee’s marital status to ‘single’ and exemptions to ‘zero’. (Please note the KPAY320 process will also update the existing SHARP federal tax data records for all employees claiming the advance Earned Income Credit in 2008 in which the ‘New W-5 Received’ radio button is not checked. The update will insert a January 1, 2009 effective dated row with an EIC Status of ‘Not Applicable’.)

For any Forms W-4s for 2009 (or Forms W-5s for 2009 for employees claiming the advance EIC) received between December 22, 2008 and January 1, 2009, agency personnel will need to enter the data with a January 2, 2009 effective date. The data will need to be entered into SHARP by 6:00 p.m. on Friday, January 2, 2009 in order to be reflected in the on-cycle paycheck dated January 9, 2009. Agency Workflow Administrators will also need to change the effective date to January 2, 2009 for any electronic FormsW-4s for 2009 received in this time period. Please refer to the Employee Payroll Tax Data section of the Payroll module in the on-line CBT (Computer Based Training) for specific instructions on entering employee tax data information and worklist maintenance.

IRS regulations require non-resident alien employees who claim an exempt status from federal withholding tax up to their treaty limit (for income earned in the United States) to file a new 8233 annually. Employees who claimed a non-resident alien exempt status in calendar year
2008 must file a new 8233 form for calendar year 2009 if they wish to continue their non-resident alien status. As a reminder, Regents Institutions are responsible for the accuracy of the eligibility of their non-resident alien employees and for monitoring maximum presence.

The KPAY320 processed on December 22, 2008 will enter a new effective dated row in the SHARP federal tax data records for employees with a special tax withholding status of ‘Non-Resident Alien’ to reflect that no 8233 form has been submitted for calendar year 2009. The new tax data row will be dated January 1, 2009. Payroll Services will update the 8233 indicator on the tax data records once a form 8233 for calendar year 2008 has been submitted.

The KPAY320 creates a report (by SHARP agency) that identifies all agency employees whose exempt withholding status and/or EIC was updated in SHARP on the night of December 22, 2008. The report will be available in the agency directory on the MVS on Tuesday, December 23. A report 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 make all of the necessary changes in the computation of withholding taxes for SHARP agencies. Regents’ institutions are responsible for implementing the new withholding tax rates in their respective payroll systems.

KEO:NTR:ewb

Attachment: Tables for Percentage Method of Withholding pdf

DATE:	December 5, 2008
SUBJECT:	New Advance Earned Income Credit Tables for 2009
EFFECTIVE DATE:	January 1, 2009
CONTACT:	Sunni Zentner	(785) 296-7058	sunni.zentner@da.ks.gov
APPROVAL:
SUMMARY:	New Advance Earned Income Credit Tables Effective for Paychecks Issued on or After January 1, 2009

The Internal Revenue Service (IRS) has issued the new percentage tables for computing the advance earned income credit (EIC) payments effective for 2009. The attached tables are to be used in computing all advance EIC payments for wages paid on or after January 1, 2009. In order to use the attached tables, income must be annualized. When annualizing income to calculate the advance EIC, multiply federal taxable income for the current bi-weekly pay period by the twenty-six pay periods in the year.

As of this date, the IRS has not issued the 2009 Form W-5 - Earned Income Credit Advance Payment Certificate. Once the W-5 becomes available, notification will be sent to subscribers of the SHARP Infolist. SHARP users interested in subscribing to the Infolist, but who have not yet done so, can subscribe at http://da.ks.gov/SHARP/infolist.htm. The 2008 Form W-5 expires on December 31, 2008. The 2009 Form W-5 must be filed with the employer before advance 2009 payments can begin. Generally, employees have to successfully answer questions listed on page 2 of Form W-5 in order to be eligible for advance payments. In addition to meeting other criteria, advance EIC qualifiers must have at least one qualifying child and expect that 2009 earned and adjusted gross income will each be less than $35,463.00 for single employees or $38,583.00 if filing jointly (include spouse’s income if filing jointly). Employees cannot claim the EIC if planning to file either Form 2555 or Form 2555-EZ (relating to foreign earned income). Finally, a nonresident alien may not claim the advance EIC for 2009 unless married to a U.S. citizen or resident and elects to be taxed as a resident alien for all of 2009.

The IRS has established the following three employee status categories: (a) Single or Head of Household, (b) Married Without Spouse Filing Certificate, and (c) Married With Both Spouses Filing Certificate. Married employees must indicate on Form W-5 if their spouse receives advance EIC payments.

An e-mail notification was sent on December 4, 2008 to all SHARP employees receiving advance EIC payments in 2008. The notification reminded employees that a new Form W-5 must be submitted to continue the advance EIC payments in 2009. The notification was sent to the employee’s email address listed under ‘Update My Profile’ in the Employee Self Service Center at https://sharp.ks.gov/psp/ESS/?cmd=login. Agencies will need to distribute notifications to their employees who lack an individual e-mail address.

Agency personnel have until 6:00 p.m. on December 22, 2008 to update SHARP with the new EIC information for all employees who submit a new paper Form W-5 for 2009. It is important that agency personnel check the ‘New W-5 Received’ radio button on the employee’s ‘Federal Tax Data’ page for the new effective-dated row that is entered.

The KPAY320 will process in the batch cycle generated the evening of December 22, 2008. This process will search for employees who were sent a W-5 notification. If a new W-5 has not been received, a January 1, 2009 effective-dated row will be inserted in the employee’s Tax Data record with an EIC status of ‘Not Applicable’. (Please note the KPAY320 process will also update all employees claiming exemption from federal withholding tax in 2008, if a new W-4 has not been received. The update will place a January 1, 2009 effective-dated row in the employee’s tax record with a marital status of ‘single’ and zero exemptions.)

For any Forms W-5 for 2009 (or Forms W-4 for 2009 for employees claiming exemption from withholding) received between December 22, 2008 and January 1, 2009, agency personnel will need to enter the data with a January 2, 2009 effective date. The data will need to be entered into SHARP by 6:00 p.m. on Friday, January 2, 2009 in order to be reflected in the on-cycle paycheck dated January 9, 2009. Please refer to the Employee Payroll Tax Data section of the Payroll module in the on-line CBT (Computer Based Training) for specific instructions on entering employee tax data information and worklist maintenance.

The KPAY320 creates a report (by SHARP agency) that identifies all agency employees whose exempt withholding and/or EIC status was updated in SHARP on the night of December 22, 2008. The report will be available in the agency directory on the MVS on Tuesday, December 23.

The Department of Administration will make all of the necessary changes in the computation of the advance EIC for SHARP agencies. Regent’s institutions are responsible for implementing the new advance EIC rates in their respective payroll systems.

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Attachment: Advance Earned Income Credit Formulas pdf

DATE:	December 23, 2008
SUBJECT:	Increase in Parking Fees for City of Topeka Parking Garages
EFFECTIVE DATE:	Payroll Period Beginning December 28, 2008 and Ending January 10, 2009, Paid January 23, 2009
CONTACT:	Cindy Lo	(785) 296-2259	cindy.lo@da.ks.gov
APPROVAL:
SUMMARY:	Increase in Parking Fees for City of Topeka Parking Garages

Effective January 1, 2009, the City of Topeka is increasing its monthly parking rates, including reserved stalls, for all City parking garages. This rate increase impacts State of Kansas agencies with contracts for parking in the Centre City Garage (9th and Kansas) and the 512 Jackson garage. The monthly parking rates will increase to $66.00 a month for non-reserved spaces and $73.75 a month for reserved spaces. Employees who park in these garages will see their parking deduction increase as follows starting with the payroll period beginning December 28, 2008 and ending January 10, 2009, paid January 23, 2009:

The Division of Accounts and Reports, Payroll Systems Team will make the necessary updates to the SHARP payroll system to effect this change for all employees for whom SHARP calculates pay. Regents’ institutions are responsible for ensuring that this change is made in their individual systems.

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DATE:	January 9, 2009
SUBJECT:	W-2 Wage and Tax Statements for Calendar Year 2008
EFFECTIVE DATE:	Immediately
CONTACT:	Sunni Zentner	(785) 296-7058	Sunni.Zentner@da.ks.gov
APPROVAL:
SUMMARY:	Information Pertaining to Employee 2008 W-2 Statements

The final version of the KTXPR55 W-2 listing has been generated. The KTXPR55 report contains all information printed on the 2008 W-2 Wage and Tax Statement for each employee of your agency. Agencies will find the report in their agency mailbox on the MVS with a date of December 30, 2008. This report should be downloaded and retained by your agency to meet your historical record needs. This report will be removed from your MVS mailbox and will be no longer available for downloading after January 28, 2009.

The KTXPR55 W-2 listing is sorted as follows: 1) by department number, 2) alphabetically by last name, and 3) by social security number (SSN). Totals are included for each 10-digit department number as well as a grand total summary for the entire agency. The 'DIST. TOTAL' represents the total number of 2008 W-2's that were printed for your agency. The Department of Administration will be preparing a STARS voucher to bill each agency for the applicable costs associated with mailing the 2008 W-2's.

In those instances where an employee has worked for more than one department, one W-2 form has been prepared which includes earnings and deductions for all departments. The W-2 information for these employees will be included on the KTXPR55 W-2 listing for the department number appearing on the employee's most current job record.

The standard W-2 will be used again for 2008. The standard W-2 is one page, contains four copies (a copy to be used with the employees federal return, two copies that can be used for the employees state and local returns, and a copy for the employee records), and is pressure-sealed.

Agencies are reminded that the mailing address on the Contact Information page will be the primary address used for mailing the W-2. If the employee has no mailing address, then the employee's home address will be used for mailing theW-2. Most employees should continue to receive their W-2’s at home, since the majority of employees do not have a mailing address. In situations where the address information is not correct or is not sufficient for postal delivery, the W-2 form will be mailed to the agency for distribution to the employee. The return address for all W-2 forms mailed this year will again be the agency address.

All 2008 W-2’s, which are considered undeliverable to the employees and are returned to the agency by the U.S. Postal Service, should be retained by the agency until April 16, 2009. At that time, they should be sorted in alphabetical order by last name, first name, and middle initial
within department number and returned to the Division of Accounts and Reports, Payroll Services.

In cases where the 2008 W-2 Wage and Tax Statement form does not agree with your records, please send a copy of the form to this office with an explanation. For all cases where the social security number is incorrect, please include a copy of the employee's social security card with the explanation. State agencies are not authorized to make changes on the W-2 forms. The Social Security Administration and the Kansas Department of Revenue must be notified of corrections made by the Department of Administration.

For employees needing duplicate W-2’s for years 2003 through 2008, agencies are strongly encouraged to recommend that employees use the ‘W-2 Reissue Request’ functionality found in Employee Self Service at https://sharp.ks.gov/psp/ESS/  <------- Broken link. After logging into the system and selecting ‘W-2 Reissue Request’, the employee will be asked to review the Tax Address and make any needed corrections. Please note that the Tax Address is where the reissued W-2 will be mailed, so it is imperative that the address is correct. The employee will also need to specify for which tax year (2008, 2007, 2006, 2005, 2004, or 2003) the reissued W-2 is needed. Duplicate W-2’s for 2003 - 2007 are currently available, and duplicate W-2’s for 2008 will be available starting on Wednesday, January 21, 2009. Please note that duplicate W-2’s for the year 2003 will no longer be available after mid-April 2009.

The Division of Accounts and Reports, Payroll Services will continue to provide duplicate W-2’s for those employees who cannot access Employee Self Service. Requests for duplicate W-2’s received by Payroll Services by noon of each Thursday will be processed Thursday evening and mailed the next day. Agencies need to verify the mailing addresses for the W-2’s and submit the correct addresses to Payroll Services. Agencies are requested to submit one blanket request for duplicate 2008 W-2's for each printing. The requests should be in employee ID order and should include each employee's name and correct mailing address in addition to the employee ID. Requests for duplicate W-2's for years prior to 2008 should be submitted separately. Duplicate 1042S form requests should also be submitted separately. Requests for either duplicate W-2 or 1042S forms should be directed to Payroll Services at telephone number 785-296-2311.

Attachment A has been included with this circular to assist agencies in answering questions regarding the W-2 forms. The attachment defines what items must be added (+) or subtracted (-) to arrive at the amounts shown on the W-2 form. In addition, agencies may also consider utilizing the SHARP KPAY318, “Year to Date Balances” report to assist in answering W-2 related questions. The report is available through SHARP using the path: Home / Payroll for North America / Periodic Payroll Events USA / Balance Reviews / Year to Date Balances. Employee ID and year are required to run this report. See Accounts and Reports Informational Circular No. 97-P-005 dated October 31, 1996 for additional information regarding the KPAY318.

Please note that on-cycle and off-cycle paychecks dated December 24, 2008 and off-cycle checks dated December 31, 2008 are included in the 2008 W-2 amounts.

Attachments

2008 W-2 Wage and Tax Statement Calculations (xls)
Sample KPAY318.SQR (xls)

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DATE:	January 9, 2009
SUBJECT:	2009 W-2 Production Report Schedule
EFFECTIVE DATE:	Immediately
CONTACT:	Sunni Zentner	(785) 296-7058	Sunni.Zentner@da.ks.gov
APPROVAL:
SUMMARY:	2009 W-2 Production Report Schedule

In an effort to reduce the time and effort required of Regents and SHARP agency personnel as well as Payroll Services staff at the end of the calendar year, the 2009 W-2 production reports will be produced throughout the calendar year. By producing the reports on a scheduled basis during the year, the work associated with identifying and correcting errors/address problems can be more evenly distributed. The following is a list of the dates the 2009 W-2 production reports are scheduled to be generated:

• Friday, February 20, 2009
• Friday, March 20, 2009
• Friday, April 17, 2009
• Friday, May 15, 2009
• Friday, June 12, 2009
• Friday, July 10, 2009
• Friday, August 7, 2009
• Friday, September 4, 2009
• Friday, October 2, 2009
• Friday, October 30, 2009
• Friday, November 13, 2009
• Wednesday, November 25, 2009
• Wednesday, December 9, 2009
• Monday, December 14, 2009
• Monday, December 21, 2009
• Monday, December 28, 2009
• Wednesday, December 30, 2009 - Tentative Final Load

Agencies should anticipate finding copies of the KTXPR55 and TAX910ER reports in their agency mailbox on the MVS on the first working day following the above listed scheduled dates. Errors appearing on TAX910ER for SHARP agencies will be monitored and corrected by Accounts and Reports. Regent’s institutions are responsible for monitoring and correcting their own errors in a timely manner. No action is required by the agency on the KTXPR55. Once the W-2’s for 2009 are complete, a final KTXPR55 report will be generated for each agency’s information and review.
In addition, the Regent’s institutions will receive the report TAX900 in their agency mailbox on the MVS. The TAX900 report should be thoroughly reviewed and any correcting transactions processed timely. It will continue to be the Regent’s responsibility to use the Management Reporting Interface file (MRI) to reconcile the year-to-date amounts in SHARP to the year-to-date amounts in their individual payroll systems.

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DATE:	January 27, 2009
SUBJECT:	Addition of Form 8233 Data to the Regent Inbound MRI
EFFECTIVE DATE:	March 16, 2009
CONTACT:	Sunni Zentner	(785) 296-7058	Sunni.Zentner@da.ks.gov
APPROVAL:
SUMMARY:	Form 8233 Requirement Discontinued and New Fields Added to Regent Inbound MRI

Effective immediately, Regent institutions should discontinue submitting copies of Form 8233 (Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual) to the Division of Accounts and Reports.  Under the previous procedure, these forms were completed by employees at Regent institutions, recorded in the agency’s system, mailed to the Payroll Section of Accounts and Reports, and then manually entered into SHARP.  At one time the State of Kansas was required to mail these forms to the IRS at the end of the year along with Form 1042-S, but that is no longer a requirement.  The new procedure will require the Regent institution to retain Form 8233 and the option to send the data to the Payroll Section on the Regents’ inbound management reporting interface (MRI).  The new file layout will go into effect for all Regent MRIs submitted for processing on or after March 16, 2009.  Additionally, Regents institutions will have the option to manually enter the necessary data on-line in SHARP instead of using the inbound MRI.

Two new fields have been added to the Federal Tax Data Record on the Regents’ inbound MRI to allow Regent institutions to enter information from Form 8233.  The two fields added are “Form 8233 Received” and “Form 8233 in Effect Date”.  A copy of the updated MRI layout is attached to this circular; the Federal Tax Data Record is located on page 14 of the layout and is the only record being changed at this time.  The “Form 8233 Received” field should be populated with either values ‘N’ (No), ‘Y’ (Yes), or ‘X’ (Not Applicable).  If this field is populated with ‘Y’, then the field “Form 8233 in Effect Date” becomes a required field.  This date field should be populated using a CCYY-MM-DD format and should record the date Form 8233 was submitted.

As noted in the instructions for Form 8233 (available on the IRS website at:  http://www.irs.gov/pub/irs-pdf/i8233.pdf), within 5 days of acceptance, one copy of the form should be forwarded to the IRS at the following address:

Internal Revenue Service
International Section
P.O. Box 920
Bensalem, PA  19020-8518

Regents institutions should continue to send the 8233 forms into the IRS as directed in the instructions.  A copy of each form needs to be retained at the agency for no less than four calendar years.  Also, the KPAY249 report will continue to be provided in agency MVS mailboxes and agencies need to continue resolving any errors that appear on the report.  Form 8233s received by the Payroll Section of Accounts and Reports thus far for calendar year 2009 will be returned to the respective Regents institution.

Any questions regarding this information should be directed to Sunni Zentner in the Payroll Section of Accounts and Reports at (785) 296-7058.  Any questions regarding the testing of these changes on the Regents’ inbound MRI should be directed to Kathy Ogle in the Payroll Section of Accounts and Reports at (785) 296-2290.

Attachment - MRI Record Layout [excel]

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DATE:	January 30, 2009
SUBJECT:	Addition of Earnings Code ‘MDP’ for Military Differential Pay
EFFECTIVE DATE:	January 1, 2009
CONTACT:	Earl Brynds	(785) 296-5376	earl.brynds@da.ks.gov
APPROVAL:
SUMMARY:	Addition of New Earnings Code for Military Differential Pay due to Changes by the IRS

Currently, a differential is available, limited to $ 1,000 per pay period, for eligible State of Kansas employees who are activated to full-time military duty, mobilized and deployed for more than 30 consecutive days in support of a military operation to defend our nation, on or after July 1, 2008. This military differential is paid directly to the eligible employees through STARS and reported to the Internal Revenue Service (IRS) on Form 1099 MISC.

Effective January 1, 2009, the IRS rules related to Military Differential Payments have changed.  Pursuant to the Heroes Earning Assistance and Relief Tax Act  (Pub. L. No. 110-245), all such payments made January 1, 2009 and forward are considered wages for federal income tax purposes and must be reported on the employee’s W-2 forms.  However, these payments are still not subject to FICA.  Because of these changes, the military differential will now be processed and paid to eligible employees out of the SHARP system.  Note that this change does not impact Military Activation payments.  Approved Military Activation payments for eligible employees will continue to be processed in STARS.

To administer the military differential from SHARP, a new earnings code will be established effective January 1, 2009.  The following earnings code should be used to process military differential pay to eligible employees:

The new earnings code is subject to Federal and State withholding taxes but is not subject to FICA.  Additionally, ‘MDP’ is subject to UCI, Worker’s Compensation, State Leave and KPERS.  Also, a new expenditure sub-object code (1430) has been established in STARS for Military Differential Pay.  For more information regarding this new sub-object code refer to Accounts and Reports Informational Circular 09-A-004.   Agencies should use the ‘MDP’ earnings code to process any military differential pay for eligible employees starting with the pay period beginning January 25, 2009 through February 7, 2009 paid February 20, 2009.

The Division of Accounts and Reports, Payroll Systems Team, is responsible for adding this new earnings code in the SHARP system.  Regents’ institutions are responsible for implementing the new earnings code in their payroll systems.

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DATE:	January 30, 2009
SUBJECT:	Addition of Earnings Code for No Response Time
EFFECTIVE DATE:	January 25, 2009
CONTACT:	Cindy Lo	(785) 296-2259	cindy.lo@da.ks.gov
APPROVAL:
SUMMARY:	Addition of Earnings Code ‘NOR’ for Eligible KOSE Employees

The Unit 1 Supplemental Agreement between the State of Kansas and the Kansas Organization of State Employees (KOSE) that became effective January 25, 2009, stipulates that in the event eligible KOSE non-exempt employees are sent home early from their regularly scheduled shift in anticipation of call-back but are not called, they shall be paid for the no response time constituting the remainder of that shift.  

A new earnings code has been added to SHARP effective January 25, 2009 to administer the no response time earnings.  The following earnings code is eligible to be used starting with the pay period beginning January 25, 2009 through February 7 , 2009 paid February 20, 2009.

NOR should be used for eligible non-exempt employees only and counts toward FLSA/Overtime and leave accrual (hours in pay status for leave accrual purposes).

The Division of Accounts and Reports, Payroll Systems Team, is responsible for adding the new earnings code in the SHARP system.  Regents’ institutions are responsible for implementing the new earnings code in their payroll systems.

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The State of Kansas is currently in the process of implementing a new Statewide Financial Management System (FMS). The Sunflower Project Team, in conjunction with the Department of Administration and Executive Sponsors, is dedicated to bringing the Financial Management System online for all agencies on July 1, 2010. The new FMS system will use PeopleSoft Financial Management as the software and will be fully integrated with the Statewide Human Resource and Payroll System (SHARP).

In order to provide the most stable production, development and testing environments possible for the extensive design, programming, and testing required for the success of the Sunflower Project, a programming freeze is being instituted for the Statewide Human Resource and Payroll (SHARP) system. Effective immediately, only changes required to comply with legislative mandates, remain current with system maintenance, or resolve production processing issues will be applied to the SHARP system. The implementation of this freeze will minimize disruption to development, testing and production environments and maximize the resources available to assist in the successful implementation of the new Financial Management System.

Requests for programming action or changes that fall outside of the areas noted above will be reviewed and prioritized for action after a stable processing environment is established following the go live date of July 1, 2010.

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DATE:	February 23, 2009
SUBJECT:	Employer KPERS Death and Disability Insurance Contributions
EFFECTIVE DATE:	March 1, 2009
CONTACT:	Cindy Lo	(785) 296-2259	cindy.lo@da.ks.gov
APPROVAL:
SUMMARY:	Suspension of Employer Contributions for KPERS Death and Disability Insurance for the period of March 1, 2009 to June 30, 2009

SB23, passed in the 2009 legislative session, suspends employer contributions for KPERS Death and Disability Insurance from March 1, 2009 to June 30, 2009. As a result of this legislation, the Division of Accounts and Reports will not collect or remit the employer portion of KPERS Death and Disability insurance contributions for pay periods that have an original check issue date on and after March 6, 2009. The KPERS Death and Disability Insurance moratorium will start effective with the pay period beginning February 8, 2009 and ending February 21, 2009, paid March 6, 2009. Please note that the KPERS Death and Disability contributions for off-cycle payrolls are calculated based on pay period end dates, so paycheck adjustments processed after March 1, 2009 for pay period end dates prior to February 21, 2009 will continue to have the contributions collected and remitted. Remittances will continue to be made according to the normal schedule for the prior period adjustments.

Agencies are reminded that it is extremely important that the appropriate ‘GTL’ code be established in SHARP’s Retirement Plans page ( Plan Type 7U) under Benefits, or for Legislators the Life and AD/D Benefits page ( Plan Type 22) for new employees hired after February 8, 2009, even though the agency will not be charged for KPERS Death and Disability contributions. If the appropriate ‘GTL’ code is not established, then imputed income, if applicable, will not be properly calculated for the new employee.

Regent institutions are reminded that the Death and Disability Insurance moratorium is for the employer paid contributions only. The moratorium does not extend to members of Board of Regents retirement plans who elect to continue the Death and Disability Insurance coverage while on leave without pay under the provisions of K.S.A. 74-4927a(8), which specifically requires the "employee" to remit the required contribution while on leave without pay.

The Division of Accounts and Reports, Payroll Systems Team, will make the necessary updates to the SHARP payroll system to effect this change for all employees for whom SHARP calculates pay. Regent’s institutions are responsible for ensuring that this change is made in their respective systems effective with the payroll periods noted above.

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DATE:	February 27, 2009
SUBJECT:	Revised 2009 Percentage Method Tables for Federal Tax Withholding and Advance Earned Income Credit Payment Tables
EFFECTIVE DATE:	March 20, 2009
CONTACT:	Jennifer Holthaus	(785) 368-6313	jennifer.holthaus@da.ks.gov
APPROVAL:
SUMMARY:	Revised Federal Withholding Tax Tables and Revised Advance Earned Income Credit Payment Tables Effective for Paychecks Issued On or After March 20, 2009

The Internal Revenue Service (IRS) has issued revised tables for the percentage method of withholding and advance earned income credit (EIC) payment tables for 2009. These tables were revised due to changes to the tax law made in the American Recovery and Reinvestment Act of 2009. The attached tables are to be used in computing federal tax withholding and advance EIC payments for wages paid on or after March 20, 2009. As a reminder, in order to use the attached tables, income must be annualized. To annualize income, multiply federal taxable income for the current bi-weekly pay period by the twenty-six pay periods in the year.

Employees are not required to complete a new Form W-4 for Federal withholding. The revised tables were developed to apply for withholding for all employees and to take into account all current tax provisions. Also, employees are not required to complete a new Form W-5 for Advance EIC payments.

The Department of Administration will make all of the necessary changes in the computation of withholding taxes and advance EIC payments for SHARP agencies. Regent institutions are responsible for implementing the new withholding tax rates and advance EIC payments in their respective payroll systems.

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Attachments: 

Revised Tables for Percentage Method of Withholding pdf

Revised Tables for Advance EIC Payments pdf

DATE:	March 2, 2009
SUBJECT:	Suspension of Employer Group Health Insurance Contributions
EFFECTIVE DATE:	February 22, 2009
CONTACT:	Cindy Lo	(785) 296-2259	cindy.lo@da.ks.gov
APPROVAL:
SUMMARY:	Suspension of Employer Contributions for Group Health Insurance for the Payroll Periods February 22, 2009 to June 13, 2009

Senate Bill 23, passed in the 2009 legislative session, suspends employer contributions for group health insurance for the payroll periods from February 22, 2009 to June 13, 2009. As a result of this legislation, the Division of Accounts and Reports will not collect or remit the employer portion of group health insurance contributions for pay periods that have an original check issue date from March 20, 2009 to June 26, 2009. This moratorium will start effective with the pay period beginning February 22, 2009 and ending March 7, 2009, paid March 20, 2009. This moratorium, however, does not impact the employer contributions collected and remitted to employee Health Savings Accounts.

Please note that the group health insurance contributions for off-cycle payrolls are calculated based on pay period end dates, so paycheck adjustments processed after February 22, 2009 for pay period end dates prior to March 7, 2009 will continue to have the contributions collected and remitted. Remittances will continue to be made according to the normal schedule for the prior period adjustments.

The Division of Accounts and Reports, Payroll Systems Team, will make the necessary updates to the SHARP payroll system to effect this change for all employees for whom SHARP calculates pay. Regent institutions are responsible for ensuring that this change is made in their respective systems effective with the payroll periods noted above.

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DATE:	March 30, 2009
SUBJECT:	Addition of Earnings Code for Skill Differential 5 - MBO
EFFECTIVE DATE:	March 22, 2009
CONTACT:	Cindy Lo	(785) 296-2259	cindy.lo@da.ks.gov
APPROVAL:
SUMMARY:	Addition of Earnings Code ‘SK5’

The Memorandum of Agreement between the Division of Printing and the Graphic Communications Conference/International Brotherhood of Teamsters 49C (Union) that became effective March 16, 2009, establishes that Bookbinders shall be paid an additional $2.00 per hour of skill code pay for operating by themselves (including loading and unloading) the folder (MBO) once the job is approved by the Manager. This skill code is only available for use by the Department of Administration-Division of Printing.

A new earnings code has been added to SHARP effective March 22, 2009 to administer the skill code pay earnings. The following earnings code is eligible to be used starting with the pay period beginning March 22, 2009 through April 4 , 2009 paid April 17, 2009.

The Division of Accounts and Reports, Payroll Systems Team, is responsible for adding the new earnings code in the SHARP system.

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DATE:	April 8, 2009
SUBJECT:	Organization Dues Change for ORG059
EFFECTIVE DATE:	Payroll Period Ending April 18, 2009
CONTACT:	Janice Wolfley	(785) 296-3699	janice.wolfley@da.ks.gov
APPROVAL:
SUMMARY:	Change in Organization Dues Deduction for Kansas Game Wardens FOP Lodge #59

The organization dues for members of the Kansas Game Wardens Fraternal Order of Police Lodge #59, ORG059, will be increased from $12.00 to $15.00 per biweekly payroll period. The new rate will become effective with the payroll period beginning April 5, 2009 and ending April 18, 2009, paid May 1, 2009.

The Division of Accounts and Reports, Payroll Systems Team is responsible for making this change in the SHARP system. Regent’s institutions are responsible for ensuring this change is reflected in their individual systems and is effective for paychecks issued on or after May 1, 2009.

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DATE:	April 8, 2009
SUBJECT:	Establish Contribution Deduction for KOSE Political Action Committees (PAC)
EFFECTIVE DATE:	Payroll Period Ending May 2, 2009
CONTACT:	John Yeary	(785) 296-2033	John.Yeary@da.ks.gov
APPROVAL:
SUMMARY:	Establish Organization Contribution Deduction for ORG501

Article 6, Section 2 of the Kansas Organization of State Employees (KOSE) Memorandum of Agreement with the State of Kansas authorizes voluntary contributions to the Union’s Political Action Committees (PAC) which include the American Federation of State County and Municipal Employees PEOPLE and the American Federation of Teachers COPE Committees.

Therefore, a new, after-tax, deduction code, ORG501, is being added in SHARP effective with the payroll period beginning April 19, 2009 and ending May 2, 2009, paid May 15, 2009 to accommodate the payroll deductions of voluntary contributions to these Committees. The fund/index combination for the new deduction code will be Fund 9084, Index 9710 which is the same fund/index combination used for Organization Dues deductions. Additionally, participating employees will see the description “ORG PAC – KOSE 501” printed on their paystubs or “ORG PAC” as the description in self-service for this new deduction.

All PAC contribution enrollment/cancellation forms will be provided by the Committees and/or KOSE. Normally, these enrollment forms are completed and submitted directly to KOSE by the employee. KOSE then forwards copies of the enrollment forms to John Yeary in the Labor Relations office of the Department of Administration for entry into SHARP. Under normal processing procedures for PAC enrollment forms, agencies will not receive copies of the authorization forms.

To expedite the cancellation process, the KOSE PEOPLE/COPE cancellation form instructs employees to submit the cancellation form to their agency payroll officer. All KOSE PAC cancellation forms and any PAC enrollment forms received by agency personnel should be forwarded to Labor Relations for processing at the following address:

Labor Relations
900 SW Jackson Room 252
Topeka, KS 66612

Labor Relations will forward any enrollment/cancellation forms received to KOSE PEOPLE/COPE following SHARP entry.

Questions regarding an employee’s payroll deduction for PAC should be directed to John Yeary using the contact information noted above.

The Division of Accounts and Reports, Payroll Systems Team is responsible for making this deduction code update in the SHARP system. The Division of Accounts and Reports, Reconciliation and Remittance Team will be responsible for the remittance of the deductions to KOSE.

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DATE:	April 14, 2009
SUBJECT:	Child Support Enforcement Information Requests
EFFECTIVE DATE:	Immediately
CONTACT:	Debra Jones	(785) 296-3887	Debra.Jones@da.ks.gov
APPROVAL:
SUMMARY:	Child Support Enforcement Information Requests

In an effort to facilitate the Child Support Enforcement process, a policy decision has been made to forward the Child Support Enforcement information requests directly to the employing agency.

When your agency receives such a request from the Division of Accounts and Reports, please complete the attached form and return to the appropriate Child Support Enforcement Office within the specified time period. For requests originating in Kansas, state law requires an employer to respond to the request for information within ten days. Requests originating from other states may have different due dates for response.

If you need to determine whether an Income Withholding Order is currently in effect for the employee, you can review the employee’s most current paycheck in SHARP (Payroll for North America > Payroll Processing USA > Produce Payroll > Review Paycheck). If the Garnishments data under the Paycheck Deductions tab contains information for a garnishment ID beginning with ‘IWO’, an Income Withholding Order is in effect. If you do not know the answers to any specific questions (for example, Insurance Group # or Policy #), leave the information blank.

This change should not alter the current Income Withholding Order process. The actual Income Withholding Orders should be forwarded immediately to the Director of Accounts and Reports and will continue to be processed centrally by the Division of Accounts and Reports, Payroll Services.

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DATE:	April 16, 2009
SUBJECT:	Fiscal Year End Payroll Processing for FY 2009
EFFECTIVE DATE:	Immediately
CONTACT:	Joyce Dickerson	(785) 296-3979	Joyce.Dickerson @da.ks.gov
APPROVAL:
SUMMARY:	Summary of Fiscal Year End Payroll Processing

This informational circular will discuss key payroll processing concepts to aid in fiscal year end closing.

Note: Another informational circular regarding the fiscal year 2010 payroll contribution rates will be issued as soon as the information becomes available.

Benefits Contribution Rates

Supplementals and adjustments use the benefit contribution rates effective for the pay period being adjusted. Supplementals and adjustments that are processed for pay periods ending on or before June 13, 2009 will use fiscal year 2009 benefits contribution rates (or prior fiscal years benefits contribution rates depending on the fiscal year of the payroll period being adjusted). Supplementals and adjustments for pay period ending dates greater than June 13, 2009 will use fiscal year 2010 rates. Benefit contributions include: KPERS, TIAA-CREF, KPEDCP, workers compensation insurance, state leave reserve assessment, flexible spending accounts administrative fee, group health insurance (GHI), and parking administrative fee.

Tax Rates

Taxes for supplementals and adjustments will be calculated using the tax rates effective for the paycheck issue date for the off-cycle payroll being processed. Taxes include: OASDI (Social Security), Medicare, federal withholding tax, state withholding tax, local withholding tax, and unemployment compensation insurance. Note for Regents: the use of the ‘current’ UCI rate for calculation purposes does not replace the reporting requirements for prior period adjustments necessary for quarterly UCI reporting.

Fiscal Year Expenditure Impact

Supplementals and adjustments (with the exception of reversals) will be charged to expenditures in the fiscal year the off-cycle paycheck is issued regardless of the pay period being adjusted. For example, the Run B off-cycle (processed June 24, paid June 29) for the pay period ending June 13, 2009 will be charged to fiscal year 2009 expenditures. The Run C off-cycle (processed June 29, paid July 2) for the pay period ending June 13, 2009 will be charged to fiscal year 2010 expenditures.

Reversals will always reverse expenditures in the fiscal year originally charged. Please note that the Run B off-cycle scheduled for June 24, 2009 (paid June 29) will be the last opportunity to have the reissue of an adjusted paycheck charged to fiscal year 2009 expenditures.

Once the Run B off-cycle for the period ending June 27, 2009 (processed July 8, paid July 13) has been processed, agencies should not request or process paycheck reversals until STARS FY 2009 closing has been successfully completed. STARS is scheduled to resume processing July 22, 2009.

The fiscal year expenditure impact applies to both SHARP agencies and Regents institutions.

Budget End Date and Fiscal Year Changes

The Budget End Date and Fiscal Year on the Department Budget tables will be updated centrally at the beginning of the fiscal year. This process is scheduled to run during the batch cycle the night of June 21, 2009 and should be completed by Monday morning, June 22. In that process, a new row will be added to the Department Budget tables with an effective date of June 14, 2009 (beginning date of the first on-cycle payroll charged to FY2010). The Budget End Date will be June 13, 2010. Agencies should not enter any rows with an effective date greater than or equal to June 14, 2009 until after the FY2010 insert has been completed. When adding new rows for FY2010, agencies should verify that June 13, 2010 was used as the Budget End Date for FY2010.

GHI Adjustments

As of July 1, 2009, NO payroll processing for GHI adjustments should be made for contract year 2007. Contact Brenda Vaughn (785) 296-3226 Brenda.Vaughn@khpa.ks.gov or Jeanne Wright (785) 296-0880 Jeanne.Wright@khpa.ks.gov at Kansas Health Policy Authority about any event maintenance changes that may affect claims processing for contract year 2007.

Julian Date Reset

The Julian date used for the SHARP off-cycle document numbers will reset to 001 on July 1, 2009. The Julian date used for the off-cycle’s document number is determined by the process date of the cycle while the fiscal year is determined by the off-cycle’s check issue date. For example (assuming processing occurs before midnight), the Run B off-cycle for the pay period ending June 13, 2009 (processed June 24, paid June 29) will have 359 as the Julian date in the document number and expenditures will be charged to fiscal year 2009. The Run C off-cycle for the pay period ending June 13, 2009 (processed June 29, paid July 2) will have 364 as the Julian date in the document number and expenditures will be charged to fiscal year 2010. The Run A off-cycle for the pay period ending June 27, 2009 (processed July 6, paid July 10) will have 006 as the Julian date in the document number and expenditures will be charged to fiscal year 2010.

Regents’ Institutions Responsibilities

Regents’ institutions are responsible for ensuring that the correct benefit and tax contribution rates are used when calculating payroll for employees of their agencies and for ensuring that the STARS funding file and DA175/176 effect the correct fiscal year expenditures. Regents’ institutions are also responsible for ensuring that all appropriate payroll clearing fund indexes are established in STARS for fiscal year 2010.

Reminders

To help reduce the number of adjustments to process, SHARP agencies are reminded of the following:

1. Enter job data changes prior to the creation of paysheets. Paysheets for on-cycle payrolls are created on the Tuesday night following the end of the payroll period. Any changes to the employee’s job data information (i.e., pay grade, rate of pay, FLSA status, etc.) that are entered after the creation of the paysheets will not be reflected in the employee’s on-cycle paycheck for the period and will require special handling.

2. Agencies should review the accuracy of the gross-to-net payroll information and employer contributions after each preliminary pay calculation. The PAY002 report can be used to review the gross-to-net data. On-line agencies can review employer contributions by accessing the employee’s paycheck deduction information for the period. Employer contributions have a deduction class of ‘Nontaxable’.

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DATE:	April 16, 2009
SUBJECT:	Housing, Food Service and Other Employee Maintenance
EFFECTIVE DATE:	July 1, 2009
CONTACT:	Jennifer Holthaus	(785) 368-6313	Jennifer.Holthaus@da.ks.gov
APPROVAL:
SUMMARY:	Annual review of housing, food service and other employee maintenance rates required under K.S.A. 75-2961A and K.A.R. 1-19-9

Attached is form DA-171, Housing, Food Service and Other Maintenance Policy for your agency to complete. It is not necessary to return this form to the Division of Accounts and Reports. The completed form should be maintained at your agency. If the items that you provide have been determined to be taxable to the employee, any changes in rates for fiscal year 2010 will require entry into the SHARP v8.9 system at Payroll for North America>Employee Pay Data USA> Create Additional Pay for fringe benefit income. FY2010 rate changes for maintenance should be entered into SHARP by 6:00 pm on Monday, June 29, 2009 in order to be reflected in the paychecks produced in the first preliminary on-cycle pay calculation for the payroll period ending June 27, 2009 (paychecks dated July 10, 2009).

Regent institutions should also complete the Form DA-171 and maintain the completed form at their agency. Regents’ are responsible for updating any rate changes into their payroll system.

Attachment DA-171 pdf

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DATE:	April 21, 2009
SUBJECT:	Payroll Record Retention Change
EFFECTIVE DATE:	Immediately
CONTACT:	Nancy Ruoff	(785) 296-2853	Nancy.Ruoff@da.ks.gov
APPROVAL:
SUMMARY:	Payroll Record Retention Change

In order to increase data security, staff efficiency and provide consistency, the policy regarding record retention of payroll data has been changed. Effective immediately, the Division of Accounts and Reports, Payroll Services Section will maintain historical payroll data dating back ten full years (plus the current calendar year) and respond to documented requests for historical payroll data pertaining to that period of time. Prior to this change, fifty years of historical payroll data was maintained using various storage mediums. This data includes savings bond reports and W-2 records which contain personally identifiable information. Changing the retention schedule allows for the proper disposal of forty years of historical data and the increased protection of sensitive employee personal data. Staff research time for requests for employee historical data will also be more efficient. No legal obligation exists to maintain records or respond to requests greater than seven years old.

Questions regarding this policy change should be directed to Nancy Ruoff, Division of Accounts and Reports, Payroll Services, using the contact information noted above.

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DATE:	April 29, 2009
SUBJECT:	New Deduction Codes for KPERS Tier 2 Deductions
EFFECTIVE DATE:	July 1, 2009
CONTACT:	Heather DeBusk, A&R Patti Pearce, DPS	(785) 296-2434 (785) 296-7232	Heather.DeBusk@da.ks.gov Patti.Pearce@da.ks.gov
APPROVAL:
SUMMARY:	New Deduction Codes/Benefit Plans for Future Members of KPERS

Per Senate Bill 362 of the 2007 Legislative Session, the retirement plan for current and future members of the Kansas Public Employees Retirement System (KPERS) will be modified effective July 1, 2009. This modification will provide certain benefit enhancements for current and retired KPERS members. As a result of this legislation, future members of the KPERS system will begin contributing 6% of their salary to the retirement plan. This will be effective with the first day of employment in an eligible position. For these members, there will not be a year of waiting for the KPERS deductions to begin. Further information on the specifics of the KPERS plan design changes can be found at http://www.kpers.org/issuebrief_plandesign.pdf.

Current members include those first employed before July 1, 2009; the existing KPERS deduction codes and benefit plans will continue to be used for current members as their KPERS contributions will continue at the current participation rates. For future KPERS members, which includes employees first hired on or after July 1, 2009, three new KPERS deduction codes and thirteen benefit plans are being added in SHARP effective for the payroll period beginning June 28, 2009, ending July 11, 2009, paid July 24, 2009.

The new KPERS deduction codes and benefit plans are:

(Note: these codes do not apply to the law enforcement or judges retirement plans)

The existing ‘GTL’ deduction codes and benefit plans as noted in the table above will continue to be used for the employer contributions for death and disability insurance provided to participating KPERS members.

The Department of Administration Payroll clearing fund and index codes for these new Tier 2 KPERS deduction codes will be the same as the current KPERS codes (Fund 9009, Index 9730 for employee contributions and 9830 for employer contributions). In addition, the STARS Expenditure Sub-Object Codes for Employer Contributions for the new deduction codes will be the same as the current KPERS deduction codes (1810 for Regular and Legislator, 1870 for Corrections).

The Department of Administration is responsible for making the necessary updates to the SHARP payroll system. Regents’ Institutions are responsible for ensuring that these changes are reflected in their individual systems.

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DATE:	May 11, 2009
SUBJECT:	Establish New Organization Dues Deduction Code ORG612 for Teamsters Local Union #696 (JJA)
EFFECTIVE DATE:	Payroll Period Ending May 16, 2009
CONTACT:	Janice Wolfley	(785) 296-3699	Janice.Wolfley@da.ks.gov
APPROVAL:
SUMMARY:	Establish New Organization Dues Deduction for JJA

Per notice by the Teamsters Local Union #696, a new deduction code will be added for membership dues deductions for employees at the Juvenile Justice Authority located in Topeka, Atchison, and Beloit. This bi-weekly deduction of organization dues, effective May 3, 2009, is based on a new hourly pay rate range as follows:

Agencies should refer to Informational Circular No. 08-P-024 for information regarding the initial pay rate ranges, deduction codes and bi-weekly deduction amounts for Teamsters Local Union #696.

This deduction will be established effective with the payroll period beginning May 3, 2009 and ending May 16, 2009, paid May 29, 2009.

As a reminder, this organization is only available for membership to employees who work in specific positions at the Juvenile Justice Authority facilities in Topeka, Atchison, and Beloit.

The Division of Accounts and Reports, Payroll Systems Team is responsible for making this update in the SHARP system. Regent’s institutions should ensure that the use of the listed deduction code is reflected in their individual systems effective May 3, 2009.

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DATE:	May 15 , 2009
SUBJECT:	Gift Card Interface Files and FBN Processing for CY 2009
EFFECTIVE DATE:	Immediately
CONTACT:	Julie Faust, KHPA Joyce Dickerson, A&R	(785) 296-5624 (785) 296-3979	Julie.Faust@khpa.ks.gov Joyce.Dickerson@da.ks.gov
APPROVAL:
SUMMARY:	Interface Files and Fringe Benefit Income Processing for the HealthQuest Personal Health Assessment Gift Cards for 2009

Kansas Health Policy Authority (KHPA) HealthQuest has again implemented a program for plan year 2009 that includes the incentive of a $50 Gift Card for completing the HealthQuest Personal Health Assessment (PHA). The PHA is available from April 1, 2009 through September 30, 2009 and participating employees have until October 31, 2009 to select a gift card. Employees are encouraged to claim their gift card in a timely manner to minimize adjustments required for individuals who complete the PHA but leave State employment prior to claiming their gift card. As noted in previous communications from KHPA, if participating employees do not select a gift card of their choice by October 31, 2009, a gift card will be chosen for them, unless they have opted out of the incentive. To opt out, employees can contact Julie Faust at (785) 296-5624 or at julie.faust@khpa.ks.gov. It is important to note that employees will need to opt out prior to completing the PHA if they do not want to claim a gift card.

The Gift Card Award is a taxable fringe benefit to the plan participant for the total of all gift cards selected by or for the plan participant and their eligible dependent(s). For State employees and their eligible dependents, the taxes on the fringe benefit income will be deducted from the participating employee’s paycheck based on the issue date of the employee e-mail and/or notification letter which provides the information for gift card redemption. Fringe Benefit Income is added to, and reported in, gross wages on the W-2.

For active State employees paid through SHARP, an interface will be processed biweekly beginning Monday night, May 18, 2009 to generate the necessary fringe benefit income (‘FBN’) earnings for inclusion on the employee’s paycheck. Processing the ‘FBN’ earnings on a biweekly basis will minimize the number of adjustments required for employees who have left State employment. Each agency will receive a report (KTECKHPA) in their agency mailbox on the MVS, available on Tuesday morning, which lists all employees in the agency who had ‘FBN’ earnings added to their timesheet for the biweekly pay period being processed. The first pay period for plan year 2009 to be processed for gift card ‘FBN’ earnings will be May 3 to May 16 paid on May 29, 2009.

The following procedures will be used for State employees paid through SHARP who have left State employment since the completion of the gift card requirements:

1. KHPA will receive an error listing of all fringe benefit income earnings that could not be updated to employee time records through the interface process (employee termed/retired, incorrect data, etc.)
2. KHPA will contact individual agencies to resolve all errors generated due to retired/terminated employees, incomplete data, etc.
3. For terminated/retired employees, agency personnel must complete the following steps:
   1. Agency personnel must complete a pay affecting adjustment to the employee’s most current paycheck in the current calendar year that has not been previously adjusted and does not contain a garnishment or specific earnings codes (see further information regarding Agency Payroll Adjustment at Job Aids).
   2. If agency personnel are unable to perform the adjustment due to garnishments or previous adjustments to the paycheck, the agency must submit a completed form DA-180, Paycheck Reversal/Adjustment/Supplemental for central processing by the Division of Accounts and Reports Payroll Services Team. Instructions for requesting a Centrally Entered Adjustment can be found at http://www.da.ks.gov/ar/payroll/adjustment.htm.

Once entered, processing the adjustment to create the Fringe Benefit Income for a retired or terminated employee will create an employee arrearage for the amount of the employee tax liability on the fringe benefit income. It is at the agency’s discretion to either work to recover the amount of this arrearage from the individual employee, or to write-off the amount of the employee arrearage. Further information on the policies and procedures regarding uncollectible arrearages can be located at: Info Circ 00-p-020 - Salary Overpayments and Outstanding Arrearages.

All questions regarding the gift card program and interfaces should be directed to Julie Faust, Kansas Health Policy Authority at (785) 296-5624. The Division of Accounts and Reports will be responsible for processing the interface file to update time sheets with the fringe benefit income earnings for active State employees and for processing DA-180 forms submitted by agencies for entry of adjustments which could not be processed by the agency. Questions regarding the processing of adjustments can be directed to Joyce Dickerson, Division of Accounts and Reports, Payroll Services at (785) 296-3979. Regent institutions will be provided an interface file from KHPA for their agency and are responsible for the generation of the necessary fringe benefit income transactions for their employees as well as any adjustment transactions for terminated or retired employees.

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DATE:	May 18 , 2009
SUBJECT:	IRS Information on Federal Tax Withholding
EFFECTIVE DATE:	Immediately
CONTACT:	Jennifer Holthaus	(785) 368-6313	jennifer.holthaus@da.ks.gov
APPROVAL:
SUMMARY:	Information on Federal Tax Withholding as a Result of the American Recovery and Reinvestment Act (ARRA) of 2009

Recently the IRS issued updated withholding tables to implement the withholding adjustments required by the American Recovery and Reinvestment Act of 2009. The new Wage Withholding and Advance Earned Income Credit Payment Tables were implemented for the State of Kansas effective for paychecks issued on or after March 20, 2009. Refer to informational circular 09-P-025 issued on February 27, 2009 http://www.da.ks.gov/ar/infocirc/fy2009/IC09p025.htm to view the revised tables.

The IRS has subsequently issued additional information encouraging employees in certain categories to review their withholding to determine if enough tax is being withheld.  Please provide the following information to your employees and encourage them to seek advice from their personal tax accountant or to visit www.irs.gov to utilize the on-line withholding calculator to determine if it is necessary to file a revised W-4 to ensure adequate wage withholding to meet their estimated income tax liability. State of Kansas Payroll and Human Resources staff members cannot make recommendations to individual employees regarding personal income tax withholding.  Employees can revise their Federal W-4 withholding allowances or request an additional Federal withholding amount via the Update W-4 Federal Tax Data page in Employee Self Service www.kansas.gov/employee.

Below is a summary of information per the IRS website:

In 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act will provide a refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers filing joint returns.

This tax credit will be calculated at a rate of 6.2 percent of earned income and will phase out for taxpayers with modified adjusted gross income in excess of $75,000, or $150,000 for married couples filing jointly.

Wage earners will benefit immediately with a larger paycheck as a result of the changes made to the federal income tax withholding tables to implement the Making Work Pay tax credit. Some individuals may find that the changes built into the withholding tables result in less tax being withheld than they prefer.

Depending on your personal situation, you may have less withheld from your paycheck than you need or want. If you believe your current withholding is not appropriate for your personal situation, you can perform a quick check using the IRS withholding calculator which can be found at http://www.irs.gov/individuals/article/0,,id=96196,00.html.  Adjustments can be made by filing a revised Form W-4, Employee's Withholding Allowance Certificate, with your employer.

The following groups should check their withholding to see if enough is being withheld:

• Individuals who work two or more jobs,
• Married couples who both work,
• Pensioners,
• Dependents who work but who are not eligible for the making Work Pay tax credit due to their dependent status, and
• Non-resident aliens, and some resident aliens, who do not have valid Social Security numbers and who are not eligible for the credit.

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DATE:	May 26 , 2009
SUBJECT:	Extension of Employer KPERS Death and Disability Insurance Contributions Moratorium
EFFECTIVE DATE:	Immediately
CONTACT:	Cindy Lo	(785) 296-2259	Cindy.Lo@da.ks.gov
APPROVAL:
SUMMARY:	Extending the Suspension of Employer Contributions for KPERS Death and Disability Insurance to November 30, 2009

SB219, Section (4)(A), passed in the 2009 legislative session, extended the suspension of employer contributions for KPERS Death and Disability Insurance to the period of March 1, 2009 to November 30, 2009, from the original period of March 1, 2009 to June 30, 2009 as stipulated in SB23. As a result of this legislation, the Division of Accounts and Reports will NOT resume collecting or remitting the employer portion of KPERS Death and Disability insurance contributions until the pay period beginning November 15, 2009 and ending November 28, 2009, paid December 11, 2009, as opposed to the pay period beginning June 14, 2009 and ending June 27, 2009, paid July 10, 2009 as previously scheduled.

The KPERS Death and Disability contributions for off-cycle payrolls are calculated based on pay period end dates, so paycheck adjustments processed after March 1, 2009 for pay period end dates prior to February 21, 2009 will continue to have the contributions collected and remitted.  Remittances will continue to be made according to the normal schedule for the prior period adjustments.

Agencies are reminded that it is extremely important that the appropriate ‘GTL’ code be established in SHARP’s Retirement Plans page ( Plan Type 7U) under Benefits, or for Legislators the Life and AD/D Benefits page ( Plan Type 22) for new employees hired after February 8, 2009, even though the agency will not be charged for KPERS Death and Disability contributions.  If the appropriate ‘GTL’ code is not established, then imputed income, if applicable, will not be properly calculated for the new employee.

Regent institutions are reminded that the Death and Disability Insurance moratorium is for the employer paid contributions only.  The moratorium does not extend to members of Board of Regents retirement plans who elect to continue the Death and Disability Insurance coverage while on leave without pay under the provisions of K.S.A. 74-4927a(8), which specifically requires the "employee" to remit the required contribution while on leave without pay.

The Division of Accounts and Reports, Payroll Systems Team, will make the necessary updates to the SHARP payroll system to effect this change for all employees for whom SHARP calculates pay.  Regent’s institutions are responsible for ensuring that this change is made in their respective systems effective with the payroll periods noted above.

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DATE:	June 9 , 2009
SUBJECT:	Parking Fee Increase - Curtis Building Garage – FY2010
EFFECTIVE DATE:	Payroll Period Beginning June 14, 2009 and Ending June 27, 2009, Paid July 10, 2009
CONTACT:	Cindy Lo	(785) 296-2259	Cindy.Lo@da.ks.gov
APPROVAL:
SUMMARY:	Parking Fee Increase - Curtis Building Garage – FY2010

Pursuant to Kansas Administrative Regulation 1-45-22(b)(2), parking fees for the Curtis Building Garage will increase by 2% effective with the start of fiscal year 2010. To facilitate this change, the following payroll deduction codes and associated administrative fee code will increase effective with the payroll period beginning June 14, 2009 and ending June 27, 2009, paid July 10, 2009:

The Kansas Department of Health and Environment (KDHE) will no longer subsidize the rate increases for their employees parking in the Curtis Building Garage.  As a result of this decision, KDHE employees will see their rates, listed in Group 2 below, increased to the same level as the standard rates listed in Group 1 above.  To avoid redundancy, the employees currently assigned to Group 2 parking deduction codes will eventually be switched to the deduction codes in Group 1, and the employee deduction codes in Group 2 will be ended after the switch.  The Division of Facilities Management will make the employee deduction code changes in SHARP and KDHE will notify their employees individually of the changes.

Employees with the Department of Commerce, Attorney General, and Board of Pharmacy who park in the Curtis Building Garage under parking deduction codes PKT10B and PPKT10 will see their bi-weekly deduction and associated administrative fee increase as follows:

The Division of Accounts and Reports, Payroll Systems Team will make the necessary updates to the SHARP payroll system to effect this change for all employees for whom SHARP calculates pay.  Regents’ institutions are responsible for ensuring that this change is made in their individual systems.

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DATE:	June 25, 2009
SUBJECT:	Discontinuation of Employer Group Health Insurance Contributions Moratorium
EFFECTIVE DATE:	June 14, 2009
CONTACT:	Cindy Lo	(785) 296-2259	Cindy.Lo@da.ks.gov
APPROVAL:
SUMMARY:	Resume Collecting Employer Contributions for Group Health Insurance Beginning with the Pay Period June 14 to June 27, Paid July 10, 2009

Senate Bill 23, passed in the 2009 legislative session, suspended collections of employer contributions for group health insurance (GHI) for the payroll periods from February 22, 2009 to June 13, 2009. The original GHI moratorium informational circular (09-P-026) stated “…the Division of Accounts and Reports will not collect or remit the employer portion of group health insurance contributions for pay periods that have an original check issue date from March 20, 2009 to June 26, 2009…”. To better explain the legislation, the language in the circular should have read “…the Division of Accounts and Reports will not collect or remit the employer portion of group health insurance contributions for pay periods that have an original on-cycle check issue date from March 20, 2009 to June, 26, 2009…”. To clarify, any supplemental or paycheck adjustments for the effected payroll periods processed in the ‘B’ and ‘C’ off-cycles for the payroll period ending June 13, 2009 should also be included in the moratorium.

Since the moratorium period from SB 23 has expired on June 13, 2009, the Division of Accounts and Reports will now resume collecting and remitting the employer portion of GHI contributions effective with the pay period beginning June 14, 2009 and ending June 27, 2009, paid July 10, 2009.

Please note that the group health insurance contributions for off-cycle payrolls are calculated based on pay period end dates, so paycheck adjustments processed for pay period end dates from March 7, 2009 to June 13, 2009 will NOT have the employer portion of GHI contributions. All other prior period adjustments will continue to have the contributions collected and remittances made according to the normal schedule.

The Division of Accounts and Reports, Payroll Systems Team, will make the necessary updates to the SHARP payroll system to effect aforementioned changes for all employees for whom SHARP calculates pay. Regent institutions are responsible for ensuring that these changes are made in their respective systems effective with the payroll periods noted above.

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DATE:	June 29, 2009
SUBJECT:	Fiscal Year 2010 Payroll Contribution Rates
EFFECTIVE DATE:	Pay Period Beginning June 14, 2009; Ending June 27, 2009; Paid July 10, 2009
CONTACT:	Kathy Ogle	(785) 296-2290	kathy.ogle@da.ks.gov
APPROVAL:
SUMMARY:	Fiscal Year 2010-Employee/Employer Matching Share of Payroll Contributions and Retirement Plans

The attached schedules contain employer’s contribution rates for KPERS, unemployment insurance, state leave assessment, group health insurance, and worker’s compensation insurance for fiscal year 2010. The fiscal year 2010 rates will become effective with the on-cycle payroll period beginning June 14, 2009, ending June 27, 2009 and paid July 10, 2009, except for the new KPERS Tier 2 deductions, which will become effective with the on-cycle payroll period beginning June 28, 2009, ending July 11, 2009 and paid July 24, 2009. The withholding rates for OASDI, Medicare, federal income taxes, and Kansas income taxes remain unchanged for the remainder of calendar year 2009.

In FY2010, the employer’s contribution to KPERS Death and Disability Insurance remains at 1.00% (except for retirement codes J1, J2, J3 which are .4%). However, SB219, Section (4)(A), passed in the 2009 legislative session extended the suspension of employer contributions for KPERS Death and Disability Insurance until November 30, 2009. As a result, the Division of Accounts and Reports will not resume collecting or remitting the employer portion of KPERS Death and Disability insurance contributions until the pay period beginning November 15, 2009 and ending November 28, 2009, paid December 11, 2009. For Regent institutions, the moratorium does not extend to members of Board of Regents retirement plans who elect to continue the Death and Disability Insurance coverage while on leave without pay under the provisions of K.S.A. 74-4927a(8), which specifically requires the “employee” to remit the required contribution while on leave without pay.

Since SHARP uses pay period end dates to determine if the KPERS Death and Disability Insurance contribution is taken, no contribution will be taken for paycheck adjustments with payroll period end dates that contain an original check date within the moratorium period. Agencies are reminded also of previous moratoriums for KPERS Death and Disability Insurance contributions that were in place for payroll periods with an original check date between April 1, 2000 and December 31, 2001; between July 1, 2002 and December 31, 2002; and between April 1, 2003 and June 30, 2004.

Legislation passed in 2006 changed rules about KPERS retirees who work after retirement for the same or a different KPERS employer. More detailed information on these changes can be found in the KPERS DA Memo – April 21, 2006, located at http://www.kpers.org/damemos042106.htm . These changes do not affect KP&F or the Retirement System for Judges. For retirees who begin work for a different KPERS employer, the employer must make contributions based on retiree compensation. This includes all retirees who first begin actively working in KPERS-covered positions on or after July 1, 2006. Employees who meet these criteria should be enrolled in Benefit Plan ‘PR’ and Deduction Code ‘RETRET’. For fiscal year 2010, employer rates are 7.34% Actuarial Employer Rate, 4.00% Statutory Employer Rate, for a Total Combined Rate of 11.34%. Retirees enrolled in the ‘PR’ benefit plan are not subject to KPERS death and disability insurance.

The Division of Accounts and Reports, Payroll Systems Team will update the SHARP system to reflect the changes in employer’s contribution rates. Regents’ institutions are responsible for ensuring the changes in rates are made in their individual systems. Regents’ institutions are also responsible for ensuring that the STARS funding file and DA175/176 impact the correct fiscal year expenditures, and that all appropriate payroll clearing fund indexes are established for fiscal year 2010.

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Attachments A B C pdf