1042 and NRA Processing
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1042 and NRA Processing Sunday, March 18, 2001 Track: HRMS Session: S2-6007. Panel Participants: Karen Banning, University of Kansas Dawna Groninger, University of Kansas Jennifer Gehrt, Kansas State University Linda Parker, Peoplesoft Gary Singer, Windstar Technologies, Inc.

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1042 and NRA ProcessingSunday, March 18, 2001Track: HRMS Session: S2-6007


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  • Panel Participants:

  • Karen Banning, University of Kansas

  • Dawna Groninger, University of Kansas

  • Jennifer Gehrt, Kansas State University

  • Linda Parker, Peoplesoft

  • Gary Singer, Windstar Technologies, Inc.


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University of Kansas Overview

  • One of the 7 Regent Institutions governed by State of Kansas

  • Comply with reporting of earnings for non-resident alien earnings – using State earnings codes, tax panel information reporting

  • Must maintain own time reporting, leave accrual and balance information using existing time reporting system

  • State of Kansas produces the 1042-S forms for KU employees

  • PeopleSoft V7.6 HRSA – No fixes applied


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NRA Issues

  • Student Administration & Foreign Addresses

  • When a student address is entered by SA as foreign – Job Earns Distribution populated automatically

  • Default foreign address to ‘Home Address’ and we must manually override to local address

  • 1042 Balances – Earns/Taxes

  • The appropriate effective dates must be entered in Tax Data panels in order for correct year to be updated.

  • Normally this is pay period begin date

















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Kansas State University Overview calc.

  • Fall 2000 Enrollment = 21,929

  • Active Employees = 10,000+

  • Non-Resident Aliens = 1009

  • 1042 forms in 2000 = 504


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Kansas State University Overview calc.

  • Use delivered PS HRMS 7.51 Education & Government NRA functionality with all relevant PS fixes applied

  • Use 1042 processing for payroll only--not scholarships and fellowships

  • Do not have PS Student Administration

  • Follow same basic rules and processes as the University of Kansas



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Employee Tax Data calc.

  • We do not automate Employee Tax Data on Installation Table-- we always manually enter data in Tax Data


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Address in Personal Data calc.

  • Train users to not insert foreign address in “Home Address”

  • Use local address in the “Home Address”

  • Use permanent foreign address in the “Mailing Address”, if desired


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Address in Personal Data calc.

  • Will receive warning message when tabbing out of Country field on Federal Tax Data 3 panel -- that’s okay


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Visa/Permit Data calc.

  • Tracking accurate Visa data is critical

  • Confusing panel for employee who has had more than one Visa type

  • Not effective-dated--Visa displays alphabetically, not employee’s current Visa

  • Tricky reporting

  • Fixed in PS 8?


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NRA Data Integrity calc.

  • Added a Save Error Edit to State Tax Data requiring “Resident” checkbox to be ‘No’


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NRA Data Integrity calc.

  • Employee Tax Audit Reports (SQRs) vs multiple on-line edits

  • Run audit reports beginning last day of pay period through day of final on-cycle pay calc


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Job Earnings Distribution Audits calc.

  • Fed Tax Special Status = NRA without NRA Earnings code in JOB_EARNS_DIST record

  • NRA Earnings Code without Fed Tax Special Withholding Status = NRA

  • Multiple active Employment Records and Earning Codes in each JOB_EARNS_DIST record are not equal

  • Dept ID in JOB is not equal to Dept ID in JOB_EARNS_DIST


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Visa Audits calc.

  • Employee with Visa Type = J2 and FICA Status = Exempt and enrolled in < 6 credit hours

  • Employee with Visa Type that requires Subject to FICA

  • Employee with Visa Type = J2 not eligible for Tax Treaty


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Other NRA Audits calc.

  • Fed Tax Data--NRA requires additional withholding = $15.30

  • NRA with Citizenship Status = ‘Alien Permanent’ is Subject to FICA


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Look out!! calc.

  • Watch for custom SQRs that update JOB in batch--must also update the JOB_EARNS_DIST record at same time


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FICA/SUT Audit Report calc.

  • J1/F1 Visas should always be exempt from FICA and SUT (unless Substantial Presence Test is met)

  • When FICA Exempt, SUT must be Exempt

  • When FICA Subject, SUT must be Nonexempt


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Tax Treaty Table calc.

  • PeopleSoft re-delivers tax treaty table with each major release and with each application update

  • Interim changes must be tracked and applied in your system


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Tax Treaty Information calc.

  • Tax Treaty and NRA information available on our web site: http://www.ksu.edu/hr/infomgmt/treatysum.htm

  • IRS Tax Treaty Information is simplified to include Income Codes 18 and 19, only


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Substantial Presence Test calc.

  • We use manual worksheet to capture SPT calculations

  • Enter data from worksheet in PS SPT panel so data is readily available


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Substantial Presence Test calc.

  • Start Date = Arrival Date in USA

  • Expiration Date = On-campus Work Permit Expires


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Substantial Presence Test calc.

  • PS 7.51 needs Arrival Date and Visa Issue Date on SPT panel--possibly there in PS 8


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PeopleSoft/Windstar Partnership: Background calc.

  • Partnership formed in December 1999

  • Objective: To complement PeopleSoft’s non-resident alien taxation processing capabilities with the case-by-case tax treaty analysis capabilities in Windstar’s Tax Navigator

  • Windstar is developing a two-way interface between PeopleSoft Payroll and Windstar Tax Navigator


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PeopleSoft/Windstar Partnership: Overview calc.

Windstar Tax Navigator

PeopleSoft Payroll

Captures immigration history data

Employee Data

Captures employee data

Tax Treaty Analysis

Results

Determines foreign national’s tax residency and performs tax treaty analyses

Payroll Processing

(including Tax Calculations

based on Treaty Rules)

Prepares withholding and tax treaty exemption forms

Maintains Tax Balances (including 1042)

1042 Tax Balances

Produces 1042-S reports

Produces 1042-S reports






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Information Required calc.

  • Demographics

  • Family Information

  • Immigration History back to 1/1/1985

  • Prior Treaty Usage



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Before they enroll, you must get them here calc.

VisaManager

  • Forms for F, M, J, Q, H, L, O Immigration Statuses

  • Forms for ongoing maintenance

  • Full History

  • Full Reporting Fulfillment


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Before you pay them, you must know their tax status calc.

International

Tax

Navigator


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Before you pay them, you must know their tax status calc.

International

Tax

Navigator

  • Performs Full Substantial Presence Test on any Immigration History

  • Performs Treaty Analyses

    • One at a time

    • Batch

    • Looks forward or back

  • Completes Forms for Withholding & Reporting


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The Flow calc.

VisaManager


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The Flow calc.

VisaManager

Transition

DB


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The Flow calc.

VisaManager

Transition

DB

International

Tax

Navigator


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The Flow calc.

VisaManager

Transition

DB

Two Ways, too

International

Tax

Navigator


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The Flow – Coming Soon calc.

International

Tax

Navigator

VisaManager

Transition

DB

What to Do

PeopleSoft

HR/

Payroll

Student

System

A.P.


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The Big Picture – Coming Soon calc.

New

Hires

International

Tax

Navigator

VisaManager

I9 SS5 W7

Transition

DB

Foreign National Information Form

PDF Based

FNIF

Foreign National Information System

Web Based

FNIS

PeopleSoft

HR/

Payroll

Student

System

A.P.