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January 2019 CAR Newsletter

PAYROLL

Email Scam for W-2 Information

The Internal Revenue Service and state tax agencies have once again renewed their warning about email scams requesting employee Forms W-2 from company payroll or human resources departments.

Agencies are urged to double check any executive-level or unusual requests for lists of Forms W-2 or Social Security Numbers. Cybercriminals are tricking payroll and human resource officials by disguising emails to make it appear as if it is from an organization executive. An email is sent to an employee in the payroll or human resources departments, requesting a list of all employees and their Forms W-2. The thieves then attempt to file fraudulent tax returns for tax refunds and/or post the information for sale on the Dark Net. Personnel should pay close attention to the email address of the sender and confirm requests for any sensitive data verbally, using previously known telephone numbers or in-person.

As part of a Security Summit effort, the “Don’t Take the Bait” education series focuses on raising awareness of the critical need for increased computer security and caution when reviewing email inboxes – specifically email scams that identify themselves as a friend, customer or company. The series can be viewed on the IRS website.

The IRS is investigating phishing emails. If an agency receives an email of this type, immediately contact Lisa Raihl at 405-521-3258 or Jean Hayes at 405-522-6300.

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W-2, 1095C, and 1099 Pick-up Instructions

OMES will have W-2 forms, 1099 forms and 1095 CDs ready for release at 10 a.m. on Tuesday, Jan. 15, 2019,  through 3 p.m. Thursday, Jan. 17, 2019.  Agencies will pick up the forms from our location at 5005 N Lincoln Blvd., Suite 100, Oklahoma City, OK 73105.  You may park in front of our building in the visitor parking which faces Lincoln Boulevard. As you enter the building, you must sign in at the Central Purchasing reception area. Once signed in, a team member will direct you to the room where the forms will be distributed.

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Forms W-2 & W-2C Terminology

The following are terms frequently used for different types of W-2s based on when the form is completed. 

Original W-2: Form W-2 that was originally issued to an employee by Jan. 31. 

Reissued W-2: Original Form W-2 reissued to an employee when an original form is lost, misplaced, not received, etc. Write ‘REISSUED STATEMENT” and the Reissued Date (MM/DD/YYYY) on the employee’s new copies. A reissued W-2 can be produced at any time because the data is not being changed.

Corrected W-2: Used to correct the original W-2 when an error has been discovered before OMES submits the file to the Social Security Administration. “CORRECTED” must be written on the employee’s new copies along with a Corrected Date (MM/DD/YYYY).

NOTE: Corrected W-2 forms must be delivered to OMES by Jan. 25, 2019. Please send the original W-2, a copy of the corrected form and a memo explaining why the correction is needed. Do not send copies of checks or other items.

W-2C: Used to adjust the original W-2 (or corrected W-2) information when an error has been discovered after OMES has submitted the file to the SSA.

NOTE: W-2Cs must be submitted to OMES as soon as completed and will be filed with the SSA. Please send a copy of the original W-2, Copy A of the W-2C and a memo explaining why the correction is needed. Do not send copies of checks or other items. The employee should receive a copy and the agency should keep Copy D for their records.

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Form W-2 Corrections

Corrected W-2 forms must be delivered to OMES by Jan. 25, 2019, in order for the corrections to be in the submission file.  The IRS has accelerated the requirements for reporting W-2 information. The due date for submission of Form W-2 information to the Social Security Administration is Jan. 31, 2019.

Please send the original W-2, a copy of the corrected form, and a memo explaining why the correction is needed. If the correction is due to a statutory canceled warrant that is not to be replaced, include a letter asking that the warrant not be replaced. 

Note: When a warrant has been canceled by statute there is no reason for a W-2 correction.  If it was a valid payroll payment, the employee is still entitled to a replacement warrant; therefore, the W-2 reporting is proper.

Any correction needed after this date must be sent to OMES as a W-2C for us to notify the SSA.  This will ensure reporting is as accurate and complete as possible.

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Employee Tax Refunds

Employee payroll tax withholdings are not authorized to be refunded to an employee once withheld from their payroll. Refunds will not be given for those employees who did not submit a W-4 in time for payroll processing. All agencies should have a deadline for employees to submit W-4 changes. Per IRS regulations, the effective date of the new W-4 will be the beginning of the next pay cycle for the employee. When the effective date entered is before the beginning of the next pay cycle, the system will recalculate the taxes already withheld for a closed period, which is not authorized by the IRS.

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Reporting Requirements for Repayments of Prior Year Wage Amounts

Repayments from employees made in the current year (2019) that are for overpayments of wages in a prior year (2018 or earlier) must be repaid at the gross overpayment amount in accordance with Internal Revenue Service regulations. A Corrected W-2 or a W-2C, as applicable, must be completed and sent to OMES. Only Social Security and Medicare wages and taxes are corrected on the Corrected Form W-2 or W-2C.

DO NOT correct federal or state taxable wages or income taxes. The employee received and had use of the funds during the year of overpayment and as such, the amounts are taxable for federal and state purposes. The employee may be able to take into account such repayments on their current year (2019) income tax return. Please advise them to speak to their tax accountant. Additional instructions for Form W-2 and Form W2-C are available on the IRS website. For assistance, contact Lisa Raihl at 405-521-3258, [email protected] or Jean Hayes at 405- 522-6300, [email protected].

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Annual Withholding Tax Exemption Certification for Military Spouse

Agencies are reminded to review and ensure employees have a valid OTC Form OW-9-MSE, Annual Withholding Tax Exemption Certification for Military Spouses, on file for 2019. The form must be completed annually to continue the exemption for 2019. If a new exemption form has not been submitted for 2019, the employee’s withholding status must go back to the last valid Form W-4 on file.  When an employee submits the Form OW-9-MSE, they must also submit a completed Form OK-W-4. If you receive an exempt Form OK-W-4 with Form OW-9-MSE after processing a payroll, do not process a tax refund to the employee or submit one to OMES for processing. The new exemption form will take effect on the next pay cycle; it is not retroactive to the beginning of the year. 

As a reminder, a nonresident spouse of a nonresident service member may be exempt from Oklahoma income tax on income from services performed in Oklahoma. OTC Form OW-9-MSE must be completed and returned to the employer with the required documentation, along with Form OK-W-4.  The instructions contain a list of requirements the employer must meet before the withholding exemption will be allowed. The forms must be completed each year the exemption is to be claimed. 

This exemption will require an update to the employees' 'State Tax Data' in PeopleSoft.  The Special Tax Status will be changed to: "Maintain Taxable Gross; SWT zero unless specified in 'Additional Withholding' below." This does not affect the Federal Tax Data.  Federal withholding will still be calculated based on the IRS Form W-4 in effect. 

Although exempt from state income tax withholding, the income is still reportable on the W-2 as Oklahoma wages.  Employees with questions should contact their tax accountants.

The Oklahoma Tax Commission has additional information and a section of Frequently Asked Questions on its website. The form may be found by clicking here.

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1099 INFORMATION

Form 1099-MISC Corrections

Corrected 1099-MISC forms must be delivered to OMES by Jan. 25, 2019, in order for the corrections to be in the submission file.  The IRS has accelerated the requirements for reporting 1099-MISC information.  The due date for submission of Form 1099-Misc information to the IRS is Jan. 31, 2019. Please send the original form, a copy of the corrected form, and a memo explaining why the correction is needed. Any corrections needed after this date must still be sent to OMES for us to notify the IRS.

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Form 1095-C Corrections

Corrections for Form 1095-C must be submitted to OMES/HCM Division by Feb. 22, 2019.  Please send the original form, a copy of the corrected form, and a memo explaining why the correction is needed. Please send corrections to the attention of Kristin Elsenbeck, Human Resources Manager, 405-521-6030. Any corrections needed after this date must still be sent to OMES for us to notify the IRS.

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1099 M Corrections

1099 M forms will be ready to pick up after 10 a.m. Tuesday, Jan. 15, 2019, along with the W-2s and other year-end tax forms.  ALL FORMS will be available at 5005 N Lincoln Blvd, Ste 100, Oklahoma City, OK 73105. Review the 1099's you receive and advise OMES of any changes which you determine necessary. A few blank 1099M forms will be included for you to make any necessary corrections and you may make more copies of the blank form if necessary.  If you have several corrections please contact the office and we will be able to create new 1099s with your corrections and forward them to you.  Return as many changes as possible to OMES prior to Jan. 25, 2019.

Please note the following procedures pursuant to such changes in the 1099 documents:

  • For missing addresses or address changes, send us a copy of the 1099 which includes the address you added or changed and include a notation as to the type of change as well as an updated W-9.
  • For name or FEI/SSN changes, send us a copy of the original and the amended document as well as an updated W-9 or Vendor/Payee form so that we have appropriate reference to the changes.
  • For all amount changes, please send us appropriate documentation which explains the nature of the transaction changes.
  • Any changes that need to be made after Jan. 25, 2019, still must be sent to OMES as soon as possible and we will forward the information to the IRS.

In all instances, make sure that your documentation includes enough information for us to understand your changes, the reasons for them and a contact person in case we have questions.

FYI:

  • As in the recent past for 1099 reporting, to ensure security on Form 1099M we will truncate the SSN and FEI numbers so only the last four digits are shown, ex. xxxxx1234. If you have an inquiry on any 1099M please provide OMES with the account number in the lower left portion of the form.
  • In January, before submitting our 1099 file to the IRS, we will TIN match the file with the IRS e-Services system. Any vendors that mismatch in this process must be corrected before we can submit our final file to the IRS on Jan. 31, 2019.

Questions or comments should be directed to:

Beth Brox (405) 522-1099, [email protected] or

Alicia Reel (405) 522-9479, [email protected].

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ACCOUNTING

Review of Outstanding Warrants

Agencies should be reviewing the Month End Outstanding Warrant Report no less than monthly to look for warrants that have not been cashed prior to their scheduled stat cancel date.  Consideration should be given to whether the voucher should be reissued or cancelled.

For payments that need to be reissued, OMES Form 20R should be completed and submitted with appropriate documentation and signatures.  Lost or destroyed payments should be replaced before the scheduled stat cancel date if possible. 

Warrants that need to be cancelled must be submitted to OMES Transaction Processing using OMES Form MWC and all required documents and signatures must be included.  Warrants must be cancelled prior to the date they will cancel by statute.

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Stat Cancelled Warrants

Agencies should be reviewing the 36 Month Stat Cancel Report and the Payroll 36 Month Stat Cancel Report no less than monthly to ensure that duplicate payments are not processed to vendors.  Payments to vendors for stat cancel warrants must be issued using OMES Form 20R.  Form 20R must be submitted to OMES Transaction Processing with appropriate documentation and signatures.  Warrants are available for reissue up to 36 months from the date they stat cancelled. 

Agencies should notify OMES Transaction Processing regarding warrants listed on the stat cancel reports that should not be reissued.  Those warrants will be updated in the system with a “do not reissue” notation.  Funds from stat cancelled warrants cannot be returned to the agency.

Questions about stat cancelled warrants should be directed to OMES Transaction Processing.

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Payroll Funding Corrections

Payroll funding corrections must reference the original payroll entry being corrected.  If payroll funding corrections have already been made against the original payroll entry, the original entry should be referenced in the journal lines section and all corrections must be referenced in Section C of the form.  Submissions will be validated against data in the State Accounting System.  Questions related to Payroll Funding Corrections should be sent to [email protected]

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General Ledger Journal Entry Requests

All journal entry requests must include the appropriate information when it is submitted to Central Accounting and Reporting.  The most common requests include the following categories:

  • Cash transfer request (OMES Form 10A) – The appropriate authority for the transfer must be included.  Usually this will be a specific statute or bill.  When including a bill number, be sure to include the legislative session in which the bill was passed.  The form should be signed by an authorized signer or the chief finance officer.
  • 340 fund journal imports – These summarized entries should be submitted daily and include the total of disbursements for that day.  Cancelled or stat-cancelled 340 fund warrants should be included as a separate entry to allow for validation.  These submissions must include the authorized signer.
  • Payroll funding corrections – All payroll funding corrections must include reference to the entry that is being corrected.  Most payroll funding corrections are a result of an employee being incorrectly set up in the HCM system.  When funding errors are discovered, the correction should be made in the HCM system.  These submissions must be signed by an individual authorized to sign the payroll funding claim.

Questions regarding the required documentation and submissions of journal entry requests should be sent to [email protected]

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FINANCIAL REPORTING UNIT

Comprehensive Annual Financial Report Published

As of Dec. 22, 2018, the State of Oklahoma’s Comprehensive Annual Financial Report (CAFR) for fiscal year 2018 was completed. The Financial Reporting Unit would like to thank all state agencies for their effort and cooperation in providing timely financial information.  The CAFR is available on the OMES website.

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MISCELLANEOUS

Clearing and ASA Reconciliations – Reminders

Timely and complete submission of the Form 11 or 11a reconciliations is very important.  The due date is  the 20th of the month  following the month being reconciled.  Incomplete or imbalanced forms will be returned for corrections.  Journal entries for vouchers from the clearing account will be posted when the completed form 11 or 11a is submitted.  Following are a few reminders to keep in mind when completing the forms.

  • Make sure the current version of the form on the OMES website is being used
  • Include a copy of the Summary of Receipts and Disbursements report for the account being submitted
  • Include a copy of the last page of the Treasurer’s Activity Report for the account being submitted
  • Include the journal ID for vouchers reported
  • Submit electronically to [email protected] by the due date
  • Form must be signed
  • Journal entry for expenditures must be completed. For the journal entry:
    • Make sure the journal class is OSF
    • Date the entry as of the last day of the month being reconciled
    • Ensure that appropriate account numbers are being used
    • Amounts must tie to the vouchers reported on Form 11 or 11a

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Taxpayer Offset Program Notifications

The Federal Taxpayer Offset Program (TOP) may create offsets against one agency’s federal draws or payments due to another agency’s debt.  Obtaining data about the offset often proves to be difficult and may take considerable time.  Appropriate action by both the offset and debtor agencies may help shorten the time it takes to resolve the offset.

Agencies will receive several notices before a debt to the federal government is sent to the TOP group.   The agency will have approximately 60 days to make payment for the debt and will have an additional 60 days to appeal the debt.  These notices are typically sent to the same address as the normal request for payment.  If the request for payment is sent to a third party payer, the notice of delinquent debt will also go to that third party payer, therefore, agencies need to ensure that individuals or divisions receiving these notices are sending copies to the central office.

When an agency’s federal draw or payment is offset, a notice is sent to the address on file for the draw or payment being processed.  A copy of the notice should be forwarded to OMES Central Accounting and Reporting to assist in resolving the offset.

Even though Higher Education has moved to their own Federal Identification Number, their debt is still affecting other state agencies and in some cases, their federal draws and payments are being offset as well.

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 Volume 29, Number 7
Fiscal Year-2019
January 9, 2019

In This Issue ...