11-P-017 December 2010 Payroll Processing
|DATE:||November 29, 2010|
December 2010 Payroll Processing
December 2010 Payroll Processing
As 2010 calendar year-end approaches, the Division of Accounts and Reports is making preparations for the issuance of calendar year 2010 Wage and Tax Statements (Forms W-2) and Non-Resident Alien Compensation Statements (1042-S). Any 2010 paycheck adjustments processed after the established cut-off dates will update the employee’s calendar year 2011 balances; a corrected W-2 (Form W-2C) for 2010 will not be issued for the employee involved.
FINAL 2010 PAYCHECK
The final on-cycle paychecks for calendar year 2010 will be issued December 23, 2010. Payroll transactions for the December 23, 2010 on-cycle paychecks will be posted to SMART on Tuesday night, December 21, 2010. The final off-cycle paychecks for calendar year 2010 will be issued on December 30, 2010 (generated from the off-cycle processed on December 27, 2010).
Any 2010 paychecks that are undeliverable should be reversed as soon as possible. SHARP agencies have until 6:00 p.m. on December 27, 2010 to enter paycheck reversals. Any reversals entered after the 6:00 p.m. deadline on December 27, 2010 will update calendar year 2011 balances and will not be reflected in the employee’s 2010 W-2.
PAYCHECK ADJUSTMENTS AND SUPPLEMENTALS
SHARP agencies have until 6:00 p.m. on December 27, 2010 to enter paycheck adjustment requests for any 2010 paychecks. Adjustments processed in the December 27, 2010 off-cycle payroll will be reflected on the employee’s 2010 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 2010 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 15, 2010.
Payroll Services staff will make every effort to process all DA-180 forms submitted by 5:00 p.m. on December 15, 2010 for inclusion in the December 27, 2010 off-cycle. However, if a large volume of DA-180 forms is received on the December 15, 2010 cut-off date, Payroll Services cannot guarantee that all forms will be processed as calendar year 2010 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 27, 2010 which are adjusting paychecks issued prior to January 1, 2011 will not result in a W-2C; the adjustment will update the employee’s 2011 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 27, 2010 will update the employee’s 2011 payroll balances.
REGENTS’ INSTITUTIONS: ON-CYCLE FILES
Regent on-cycle files for the pay period ending December 11, 2010, paid December 23, 2010 are due to the Department of Administration by 4:00 p.m. on December 15, 2010.
REGENTS’ INSTITUTIONS: OFF-CYCLE FILES
2010 Paycheck Reversals
Regent Institutions must submit all transmittals for 2010 paycheck reversals by 4:00 p.m. on Thursday, December 23, 2010 in order to update the employee’s 2010 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 2011 payroll balances regardless of the paycheck issue date of the paycheck being reversed. Reversals for paychecks issued prior to January 1, 2011 submitted after 4:00 p.m. on December 23, 2010 should default the pay adjust check date to January 1, 2011.
2010 Adjustments and Supplementals
In order to update employee balances for 2010, any paycheck adjustments and supplementals must be submitted no later than 4:00 p.m. on Thursday, December 23, 2010. The Run C off-cycle for the pay period ending December 11, 2010 generated on the night of Monday, December 27, 2010 will have a check issue date of December 30, 2010; all activity for this off-cycle will be reflected in the employees’ 2010 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 2010 date.
2011 Adjustments and Supplementals
With the exception of arrearages or refunds for OASDI and/or Medicare for tax years prior to 2011, any adjustments or supplementals submitted after 4:00 p.m. on Thursday, December 23, 2010, will be considered to be 2011 business regardless of the pay period end date to which the pay is related. Since this activity will be considered calendar year 2011 business, the employee’s 2011 balances will be updated. These files should contain a ‘C’ indicating current year business and the pay adjust check date should be a 2011 date (regardless of the original paycheck issue date of the paycheck being adjusted -- if the original check date was prior to January 1, 2011, agencies should default the pay adjust check date to January 1, 2011).
With the exception of OASDI and/or Medicare tax refunds or arrearages for tax years prior to 2011, Regents institutions may continue to submit adjustments and supplementals throughout the month of January 2011 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 2011 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, 2010 deadline for the December 27, 2010 Run C’s off-cycle payroll will not be processed until the April 13, 2011 off-cycle payroll. Since the files will be held, please do not begin submitting those files for processing until the week of April 11, 2011. The deadline for submitting payroll interface files for the April 13, 2011 off-cycle is 4:00 p.m. on Tuesday, April 12, 2011.
United Way and Community Health Charities
The deduction END date on the general deduction page for 2010 United Way or Community Health Charities contributions for both the UTDXXX and UTFXXX deduction codes should be dated between December 12, 2010 and December 24, 2010 in order for the last 2010 deduction to be taken on the paycheck issued December 23, 2010. 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 2011, agencies can enter a new row effective-dated between December 12, 2010 and December 25, 2010 in order for the first deduction for United Way or Community Health Charities for 2011 to be taken on the January 7, 2011 paycheck. If the deduction is to be taken over 26 pay periods, a deduction end date of December 11, 2011 should be entered. Agencies should enter the total pay period amount authorized by the employee when establishing the UTDXXX deduction code for 2011.
A new batch process will run the night of December 23, 2010 to establish the fee portion (deduction code UTFXXX) of the 2011 United Way/Community Health Charities deduction. The batch process will establish the UTFXXX deduction code with the same effective date and deduction end date as the UTDXXX deduction code for 2011. This process will reduce the 2011 deduction amount (UTDXXX deduction code) by $.06 and create a UTFXXX deduction code which defaults to the Deduction Code table for a deduction of $.06; the sum of the UTDXXX and UTFXXX deduction codes for 2011 will match the employee’s authorized deduction amount. Agencies should verify the deduction/fees set up for all employees enrolled in United Way and/or Community Health Charities beginning Monday, December 27, 2010 to ensure both the UTDXXX and UTFXXX deductions are taken correctly.
Pursuant to IRS regulations, all employees claiming an exemption from federal withholding
must file a new W-4 each calendar year. To facilitate this requirement, an email notification will be sent on December 1, 2010 to all SHARP employees who are exempt from federal withholding. 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 1, 2010 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 2011. If your agency has no employees claiming an exemption from federal withholding the worklist will be empty.
SHARP employees are encouraged to use the Employee Self Service functionality to file their 2011 W-4s. Employees should submit new paper W-4s by December 15, 2010 to allow adequate time for processing.
Agency personnel have until 6:00 p.m. on December 20, 2010 to enter all paper W-4s into the system. Agency personnel are reminded that they also need to check the radio buttons ‘New W-4 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 2011.
The KPAY320 will be processed the evening of December 20, 2010. This process searches for all employees for whom a W-4 email notification has been sent. If a new W-4 has not been received, a January 1, 2011 effective-dated row will be placed in the Employee Tax Data record. The January 1, 2011 effective-dated row will update the employee’s marital status to ‘single’ with zero exemptions.
For any 2011 paper W-4s (for employees claiming exemption from withholding) received between December 20, 2010 and January 1, 2011, agency personnel will need to enter the data with a January 2, 2011 effective date. Agency Workflow Administrators will also need to change the effective date to January 2, 2011 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 2011 Form W-4 will be posted to the Accounts and Reports website as soon as it is available from the IRS.
In prior years, this same process was used to notify employees claiming the Advance Earned Income Credit (EIC) that a new W-5 should be filed. The Education Jobs Act of 2010, enacted August 10, 2010, repeals IRC §3507, which allows low- and moderate-income employees to receive the advance payments of the earned income tax credit (EIC) through their paycheck, for tax years beginning after December 31, 2010. An email notification will be sent December 1, 2010 to all SHARP employees who are receiving advanced EIC payments, informing them of this change. Agency payroll/human resource staff should enter no W-5 information into the system for calendar year 2011. KPAY320, which will process December 20, 2010, will insert a January 1, 2011 effective-dated row in the Employee Tax Data record of employees to whom a W-5 email notification was sent. This record will stop all advance EIC payments for paychecks with a 2011 pay date. Agency payroll/human resource staff should verify that all employees’ advance EIC payments have been stopped.
The KPAY320 will also enter a new-effective dated row in the SHARP federal tax data records on December 20, 2010 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 2011. The new tax data row will be dated January 1, 2011. The 8233 indicator on the tax data records should be updated once a form 8233 for calendar year 2011 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 whose current Federal Tax Data record in SHARP indicates the ‘Form 8233 Received’ checkbox does not contain a value of ‘Y’.
All deductions for calendar year 2011 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.
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 27, 2010. 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, 2010, and prior to December 27, 2010, must be sent to the Division of Accounts and Reports, Payroll Section for processing in order to impact the 2010 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 2010 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 11, 2010 by personal reimbursement as soon as possible.
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 28, 2010 to guarantee the updated information is included in the W-2 data. Although SHARP agencies have until December 28, 2010 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 23, 2010. 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, 2010 and January 3, 2011. W-2 forms will be mailed on or before January 31, 2011. Notification of the W-2 mailings will be provided to all subscribers of the SHARP Infolist.
Attached is a revised calendar for the month of December 2010 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.state.ks.us/sharp/infolist.htm.
Attachment: December 2010 Calendar pdf