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OSPA USER’S FORUM. Year-End User’s Forum November 16, 2007. Agenda. Introductions – Katherine Bremser Year End Dates – Allison Absher Overpayments – Kathyron Parsons /Pauline Lewis Check Reversals – Maria Stalik Fringe Benefits – Sharon McKeehan / Katherine Bremser

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Ospa user s forum

OSPA USER’S FORUM

Year-End User’s Forum

November 16, 2007


Agenda

Agenda

  • Introductions – Katherine Bremser

  • Year End Dates – Allison Absher

  • Overpayments – Kathyron Parsons /Pauline Lewis

  • Check Reversals – Maria Stalik

  • Fringe Benefits – Sharon McKeehan / Katherine Bremser

  • Year-end Timeline – Cheryll Luth


It s all about the date

It’s All About the Date!

At Year End,


I went to this charming restaurant with a guy last night

I went to this charming restaurant with a guy last night ….

  • Oh wait, not that kind of date!


Three kinds of dates

Constructive Receipt

P010 Dates

Three Kinds of Dates:

  • P370 Check Dates


Constructive receipt

Constructive Receipt

  • What is It?

  • Simply put, Constructive Receipt is the day the employee will have monies available to her.

  • This can mean a physical check that was mailed, ACH deposit that was sent, or fringe benefit that was received.


Here s another way to look at it

Here’s another way to look at it:

Check the calendar – when should the employee receive her pay?


Ospa user s forum

If you answered “2007” to any of the above, then Constructive Receipt is in 2007.If you answered “2008” to any of the above, then Constructive Receipt is in 2008.

  • If a deposit was sent ACH, will the settlement date be in 2007 or 2008? (Hint: December’s ACH settlement date is 1/2/08)

  • If a physical check is mailed or delivered, is it reasonably expected to reach the employee in 2007 or in 2008?

  • If the employee received a fringe benefit such as meals, clothing allowance, etc. – did they have the use of that benefit in 2007 or in 2008?


Constructive receipt summary

Constructive Receipt Summary

  • Money expected to be available to employee or fringe benefits used in 2007 have Constructive Receipt of 2007.

  • Money expected to be available to employee or fringe benefits used in 2008 have Constructive Receipt of 2008.


The great date mate

The Great Date Mate

Or, P010 Final Check Dates – Why They Matter, When to Set Them, and When to Leave Them Alone.


Remember how to figure out constructive receipt

Remember how to figure out Constructive Receipt?

Now how do you make sure OSPA dates the employee’s check to reflect that Constructive Receipt date?


The great date mate of course

The Great Date Mate, of course!

Also known as P010 Final Dates


So what makes the great date mate so special

So what makes the Great Date Mate so special?

  • The Great Date Mate holds enormous power over managing Constructive Receipt at year end.

  • This tool tells OSPA what date to print on paychecks –

    • But only if you tell it to.


Before we get into year end specifics let s review how the great date mate works

This means, “What date do you want OSPA to print on the check?”

This means, “For the check date above, which pay period are you using?”

Before we get into year-end specifics, let’s review how the Great Date Mate works.


Let s take a quick look at a sample

Let’s take a quick look at a sample.

  • In October, Taylor Smith will be terminating employment on 10/12/07.

    • Final cutoff for Sept Run 2 is 10/9/07; normal check date is 10/15/07.

    • Final cutoff for October Run 1 is 10/26/07; normal check date is 11/1/07.

  • You know about this on 10/4/07 so you go ahead and process the final payroll entries that day.


Ospa user s forum

If you do nothing to the Great Date Mate, what date will print on October’s final system check?

11/1/07


Now then if you want the final system check to be dated 10 12 07

Set the Great Date Mate to date the check 10/12/07:

And tell OSPA which pay period you’re using:

Now then, if you want the final system check to be dated 10/12/07:

FINAL CHECK ISSUED: 101207

FINAL CHECK PERIOD ENDING: 103107

Easy, right?


Uh oh

Uh Oh . . .

What if this employee has a timesheet correction from September that still needs to be paid?

It needs to have the same check date.


You already set the great date mate to date the final check 10 12 07

You already set the Great Date Mate to date the final check 10/12/07

Will these entries:

give you a September system check dated 10/12/07?

FINAL CHECK ISSUED: 101207

FINAL CHECK PERIOD ENDING: 103107

Why or Why not?


The answer

The Answer:

NO


So how do you get the 9 30 07 pay period check to print with the 10 12 07 check date

You’ve told the Great Date Mate that you want OSPA to date the final check 10/12/07

but you’ve specified that the check will be coming from the 10/31/07 pay period

So how do you get the 9/30/07 pay period check to print with the 10/12/07 check date?

FINAL CHECK ISSUED: 101207

FINAL CHECK PERIOD ENDING: 103107

Change the date to 093007.

FINAL CHECK PERIOD ENDING


Ospa user s forum

  • Now what happens when October runs for this employee?

  • Will October have a 10/12/07 check date?

  • Not if you leave the

    date at 093007.

FINAL CHECK PERIOD ENDING

  • You’ll need to change it back to 103107 after September Run 2 has completed.

    • NOTE: You probably requested a manual check for this way back on 10/4. Setting the October P010 dates simply matches the system date to the manual check date.


So how does the great date mate apply at year end

So how does the Great Date Mate apply at year end?


Remember that constructive receipt exercise

Remember that Constructive Receipt exercise?

  • Money expected to be available to employee or fringe benefits used in 2007 have Constructive Receipt of 2007.

  • Money expected to be available to employee or fringe benefits used in 2008 have Constructive Receipt of 2008.


Ospa user s forum

How do you make sure the paycheck you give your employee has the right date on it so it corresponds with the date of Constructive Receipt?

Yep, the Great Date Mate.


Ospa user s forum

If your employee will have constructive receipt of her paycheck in 2007, the Great Date Mate should reflect that.

  • Namely, the field would show a 2007 check date,

  • and the field will tell OSPA to use either November or December to do it.

FINAL CHECK ISSUED

FINAL CHECK PERIOD ENDING

  • Let’s take a look at a quick sample.


Ospa user s forum

Taylor Smith is retiring at the end of December, and you’re lucky enough to know about it before December Run 1 final.

  • If you leave the Great Date Mate alone, it looks like this:

and will date the final check with the other check dates on 1/1/2008.

  • Since the employee’s last day is December 31, putting Constructive Receipt into 2007, that’s not what you want to happen.


Ospa user s forum

Instead, you’ll need the Great Date Mate to show this:

Now you’ve told OSPA to date the check that comes for December as 12/31/07.

That’s more like it!

  • Now let’s add another wrinkle.


Ospa user s forum

This retiring employee has timesheet corrections from September, October, and November.

Why do you think you cannot simply set a corrective for those months?


Ospa user s forum

If you did set the corrective, and the Great Date Mate is set up to date December’s check 12/31/07:

What date do you think will print on the corrected checks from September, October and November?


Did you tell ospa to put a different date on the checks for ppe 093007 103107 or 113007

Did you tell OSPA to put a different date on the checks for PPE 093007, 103107, or 113007?

  • Nope:

FINAL CHECK PERIOD ENDING: 123107

  • So since you didn’t tell it to date those pay periods differently, what check date gets used?

  • That’s right, the regular check date – which in this case would be 1/1/2008.

  • Uh oh – constructive receipt is in 2007 (12/31/07 to be exact).

    • Okay, but so what?


Having the corrective checks dated 1 1 2008 does what

Having the corrective checks dated 1/1/2008 does what?

  • Calculates September, October, and November wages into 2008

  • Double-pays the employee

  • Gives you a headache when you try to fix it


So how do you get those timesheet corrections to calculate into 2007

So how do you get those timesheet corrections to calculate into 2007?

  • You can’t set the final check period ending date to anything other than December, because then December will calculate into 2008.

  • Make P050 and related P070 adjustments on the December screens so it all comes on one check.


  • Ospa user s forum

    Okay, one more thing to consider about the Great Date Mate when it comes to timesheet corrections in prior pay periods.


    Ospa user s forum

    If your employee is NOT terminating in December and will have constructive receipt of their money in 2007, you have the option of setting the Great Date Mate to look at November and date the resulting check (even if it isn’t a final check) in 2007.

     Any guesses how? 


    Now why would you use 113007 in the field

    Now, why would you use 113007 in the field?

    • Because OSPA does not allow agencies to add, change, or delete December dates on this screen at any time.

      • Side note: This screen must contain November dates in order to set the November corrective on the P190 screen.

    FINAL CHECK ISSUED


    One more thing

    One More Thing

    P190 will show months other than November.

    However, the only month that is open for correction is November.


    There are two reasons that only november can have a corrective set

    There are two reasons that only November can have a corrective set

    • The Great Date Mate can look at only one pay period at a time

    • Once November Run 2 has closed, OSPA has to be programmed for the upcoming year with period end dates, pay dates, and cutoff dates. This overrides 2007 for 2008 info.

    You should put any adjustments for other months on the November screens for a continuing employee, or on December screens for a terminating employee.


    At year end

    At Year End,

    P370 Check Dates can be Tricky Devils


    P370 sample for 2007

    P370 Sample for 2007

    P370 OR9999999,99900,123106,123107,O CALCULATION OF CURRENT PAYOFF 370

    EMPLOYEE, JOSEPHINE

    INCOME TYPE RATE UNITS AMOUNT TAX /RET AMOUNT DEDUCTIONS AMOUNT

    TOTAL-R T 8766.66 168.00 8766.66 FIT 1331.09 AHNN001 LONG 55.23

    AEXCESS O 24.08 SIT 685.00 KDNNAAA KAIS

    FICA 395.70 KMNNAAA KAIS

    MEDR 127.46 LCNN UN L 10.00

    WCD 2.40 SLYJ001 JUDI

    STNN001 SHOR 52.60

    U3NN020 EMP 1.20

    GROSS 8766.66 TX/RT 2541.65 DED 119.03 NET/ACH 6105.98 / .00

    CALC YTD? N PRINT CHECK? N CORRECTIVE? N SEPARATION CHECK? N CHECK FEE: _3.98

    COMMENT: ________________________________________ ACCT: 105477 5 15010000850232

    • When using a check date in 2007, the net pay is $6,105.98.


    P370 sample for 2008

    P370 Sample for 2008

    P370 OR9999999,99900,123106,010208,O CALCULATION OF CURRENT PAYOFF 370

    EMPLOYEE, JOSEPHINE

    INCOME TYPE RATE UNITS AMOUNT TAX /RET AMOUNT DEDUCTIONS AMOUNT

    TOTAL-R T 8766.66 168.00 8766.66 FIT 1331.09 AHNN001 LONG 55.23

    AEXCESS O 24.08 SIT 685.00 KDNNAAA KAIS

    FICA 545.03 KMNNAAA KAIS

    MEDR 127.47 LCNN UN L 10.00

    WCD 2.40 SLYJ001 JUDI

    STNN001 SHOR 52.60

    U3NN020 EMP 1.20

    GROSS 8766.66 TX/RT 2690.99 DED 119.03 NET/ACH 5956.64 / .00

    CALC YTD? N PRINT CHECK? N CORRECTIVE? N SEPARATION CHECK? N CHECK FEE: _3.98

    COMMENT: ________________________________________ ACCT: 105477 5 15010000850232

    • When using a check date in 2008, the net pay is $5,956.64.

    The difference here is the FICA subject wages. 2007 already reached the maximum, but 2008 has not.


    P370 date summary

    P370 Date Summary

    • Watch check dates. You may get different calculations depending on which year you use.

    • Manual check date should reflect Constructive Receipt date


    Constructive receipt summary1

    Constructive Receipt Summary

    • Money expected to be available to employee or fringe benefits used in 2007 have Constructive Receipt of 2007.

    • Money expected to be available to employee or fringe benefits used in 2008 have Constructive Receipt of 2008.


    The great date mate summary

    The Great Date Mate Summary

    • overrides the default check date to this date

    • For this pay period only:

    • Can override only one pay period at a time

    • Allows you to control the Constructive Receipt date printed on a system check

    FINAL CHECK ISSUED

    FINAL CHECK PERIOD ENDING


    Questions

    Questions?


    Overpayments

    Overpayments


    When why overpayment occurs

    When/Why Overpayment Occurs

    • Late reporting of LWOP

      • Run 1, employee paid with ‘forecast’ hours

      • Run 2, after ‘actual’ time worked is entered in the system.

        The employee’s pay is recomputed for the entire month to determine whether or not there is a difference between ‘forecasted’ and ‘actual’ pay. (Possibly a terminated employee or employee on LWOP.)

    • Delayed pay-related personnel actions.

      • Pay-related information (reduced wages, removed lead work, removed work-out-of class, etc.)not entered in the PPDB to meet payroll timelines.

      • Employee’s termination date not entered in the PPDB


    When why cont d

    When/Why cont’d

    • Administrative error

      • Deductions not entered until after payroll runs. (optional insurances; garnishments, etc.)

      • Vendor deductions removed between Run 1 and Run 2 (Do not remove vendor amounts after Run 1 on the P070. If you still have possession of vendor check, request a check rewrite to the vendor/employee for correct amounts. If the check has already been released, work with vendor to send check back or repayment of the overpayment to them.


    Notification to employee

    Notification to Employee

    • An earnings statement that reflects overpayment is generated which serves as notice of the overpayment. (Check stub)

    • Agency may have standard letters.

    • OSPS web site: http://tinyurl.com/298s64, slides 63 & 64, gives suggested contents for notification.


    Collection of overpayment

    Collection of Overpayment

    • OAM 45.20.00.PO – “Overpayment returns are due and payable on discovery of the overpayment.”

      • Net pay negatives generally are collected from the following Run 1 payroll.

      • When they are not collected on the following Run 1, the Agency must reimburse the Joint Payroll Account.

    • Overpayment example:

      • The employee on Run1 ‘forecast’ was paid $1,200.00. On Run 2, ‘actual’ hours were entered. The employee’s pay is recomputed for the entire month to determine they had only earned $1,000.00. The Agency is credited with the overpayment of $200.00.

      • If the employee has or will repay an overpayment by the end of the year (December 31st) in which it occurred and this net pay negative is in November, OSPA will automatically reduce the employee’s December wages. You do not need to make any adjustments.


    Collection of overpayment cont d

    Collection of Overpayment cont’d

    • If the employee is not expected to work/earn enough hours on the next pay period to re-pay this through a payroll system deduction, you will need to reverse the entries that created the net pay negative in OSPA, so the employee’s wages/taxes are not understated for the current year. The Agency is then responsible to collect the net pay negative by working with the Agency’s accounting to establish an account receivable (A/R).

    • When the employee does not repay all or part of the overpayment in the same year it is still taxable for that year. The employee received and used the funds during the year. When the employee has repaid the full amount, request a corrected W-2 for the year in which the overpayment occurred from the OSPS Accountant (Kathyron Parsons).


    Collection of overpayment cont d1

    Collection of Overpayment cont’d

    • Do not make negative P050 entries to correct prior year overpayments; prior year negative entries will understate wages for the current tax year. Work with your Agency’s accounting staff to set-up an A/R and request a corrected W-2 when the employee repays the full amount.


    Corrected w 2 w 2c training

    Corrected W-2 (W-2c) Training

    • January 30th and February 27th

    • 1:15 to 4:15 PM

    • SFMS Conference Room, Executive Building, 155 Cottage St. NE

    • [email protected] with name, agency, phone number, e-mail address, and manager


    Questions1

    Questions?


    Check reversals

    Check Reversals


    Canceling checks for october and prior ppe s

    Canceling Checks for October and prior PPE’s

    • Some things to think about.

  • What pay period was the check issued for.

    • After November Run 2, checks for October and prior cannot be canceled.

      • So what do you do if you come across a check that needs to be canceled.

    • If a check for an October or prior pay period needs to be canceled, contact OSPS to work through the steps of correcting OSPA before December run 2.


  • November and december check cancellations

    November and December Check Cancellations

    • Thankfully these are a little easier

  • Checks cut for November or December that have a 2007 check date can be canceled up until December run 2.

  • If you find you do need to cancel a check after December run 2 closes, you will need to contact Kathyron Parsons to work through the process of creating a corrected W-2.


  • Things to look at when canceling november or december checks

    Things to look at when canceling November or December checks

    • Things you may want to consider

  • Will money be rewritten to the employee?

    • For November checks, if money will be rewritten to the employee, then you may want to consider the next bullet.

  • Is the employee terminating in December? If so, are there corrections to the November pay period?

    • P010 dates can only be set for one pay period. If the employee is terminating in December, you will be setting December dates, so any prior corrections will need to be brought forward.

  • Are there December P010 dates set?

    • If a December check is being canceled and no money is to be rewritten to the employee, there may be December P010 dates that need to be removed.


  • Questions2

    Questions?


    Fringe benefits expense reimbursements

    Fringe Benefits / Expense Reimbursements


    Resources

    Resources

    • IRS Publications, especially:

      • 15b Employer’s Tax Guide to Fringe Benefits

      • FSLG Taxable Fringe Benefit Guide

    • Oregon Accounting Manual

    • Statewide HR Policies and Bargaining Agreements

    • OSPA Reference Manual, Recommended Practices, Taxes, Reimbursements and Fringe Benefits


    Accountable plan

    Accountable Plan

    • Non-taxable if following conditions are met:

      • Business connection or deductible for employee

      • Employee required to provide accounting for expenses

      • Employee required to return excess allowances


    Pay types

    Pay Types

    • Categorized by cash and non-cash, taxable and non-taxable

    • Cash pay types:

      • Result in a payment to the employee or a vendor

      • Record income as taxable or nontaxable

    • Non-cash pay types:

      • Record income as taxable or nontaxable

      • If taxable, increase withholding without increasing payment to employee

      • May be required when employee was paid through accounts payable rather than OSPA


    Moving expense reimbursement

    Moving Expense Reimbursement

    • OAM 50.200.00.PO and PR require payments through OSPA

    • MVN = nontaxable (moving goods and personal effects and traveling)

    • MVT = taxable (meals, other expenses)

    • May request manual check to pay vendor

    • If not through OSPA, make P050 entries and a MOVE P070 entry


    Personal use of state vehicle garaged at home

    Personal Use of State Vehicle Garaged at Home

    • OAM 50.30.00.PR requires payment through OSPA

    • SMN = non-cash taxable value using cents-per-mile rule

    • SVN = non-cash taxable value using the commuting valuation rule

    • Taxable value included in Box 1 earnings on the W-2 form.


    Meal reimbursements

    Meal Reimbursements

    • Generally taxable unless provided as part of an overnight stay or:

      • De Minimis (doughnuts, pizza, infrequent)

      • Provided for the convenience of the employer

      • Part of professional organization

    • Pay types:

      • MS = non-cash, taxable

      • MSN = cash, non-taxable

      • MST = cash, taxable


    Education reimbursements

    Education Reimbursements

    • OAM 50.10.00.PO and 50.10.00.PR require payment through OSPA

    • Non-taxable if:

      • Required by employer or law to keep salary, status, job

      • Maintains or improves skills needed in job

    • EDN = Nontaxable, cash, in-state education

    • EDT = Taxable, cash, in-state education


    Clothing and tools

    Clothing and Tools

    • Clothing & Uniforms are non-taxable if

      • Condition of employment

      • Not adaptable to general use

      • Employee substantiates expenses

    • Uniform cleaning is non-taxable if uniforms are

    • ANA = clothing allowance, non-cash, taxable

    • CLA = clothing allowance, cash, non-taxable

    • CLT = clothing allowance, cash, taxable

    • CLN = cleaning allowance, cash, taxable


    Tools

    Tools

    • Tools are non-taxable if under an accountable plan

    • TLA = tool allowance, cash, non-taxable


    Questions3

    Questions?


    2007 year end timeline

    2007 Year-End Timeline


    November 30 2007

    November 30, 2007

    • Last pay period for the current year that agencies will be able to set P010 check dates for transferring employees.


    November run 2 12 10 07

    November Run 2 - 12/10/07

    • For the current year, this is the last date to:

      • Set P010 check dates for months prior to November

      • Set correctives for September or October pay periods

      • Pay-off any outstanding leave balances for separated employees

        • Report E492 Terminated Employees Having Leave Balances

        • OSPS sends out monthly e-mails regarding issues with this report that are a priority to resolve before year end.

      • Enter cash payments for expense reimbursements or fringe benefits

      • Reverse checks from pay periods prior to November


    December 31 2007

    December 31, 2007

    • For 2007, last date to:

      • Pay-off leave balances

      • Accept return of overpayment

      • Request manual check for:

        • Report E357-030 Separated Employees with Net Pay Positive Adjustments (If you get one of these, the highlighted ones are the ones that need to be resolved)

        • Remember the constructive receipt rule? These funds should be made available to the employee in 2007.


    January 2 2008

    January 2, 2008

    • Last date for receiving:

      • Updated Form W-5

        • Report EICRPT - Earned Income Credit for Tax Year

        • If you have not received an updated form you will need to modify the P010 screen to reflect no EIC for the upcoming tax year.


    January 2 2008 continued

    January 2, 2008 (Continued)

    • For an Employee Who is Not a “Lawful Permanent Resident” OSPS Form 99.01 and Form 8233 or Form W-9

      • The OSPS Form 99.01 is on the OSPS Forms Web Site under “We have a form for that” section.

      • HR offices will hopefully notify the agency payroll offices if they have employees that need to submit this information.


    January 2 2008 continued1

    January 2, 2008 (Continued)

    • By submitting this form each year your agency payroll office ensures:

      • The employee’s current resident status

      • Payroll staff have the necessary and proper information to process the employee’s taxes for the upcoming tax year

      • Prevents having to correct taxes retroactive and keeps the employee happy


    December run 2 1 9 08

    December Run 2 – 1/9/08

    • Last date for 2007 to:

      • Enter check reversals

      • Enter non-cash expense reimbursements or fringe benefits

      • Correct negative YTD amounts from the XREF68

        • The system will not print a W-2 for an employee with a negative YTD

      • Request P060 tax adjustments for separated employees with net pay positive adjustments

      • Record return of overpayment for 2007 for any payment received on or prior to 12/31/07

      • Correct payments from the Nov or Dec Pay Reported in Two Tax Years –Receive report at year end from OSPS


    After december run 2 1 11 08 final cutoff is on 1 10 08

    After December Run 2 – 1/11/08(Final cutoff is on 1/10/08)

    • First date agencies can set P010 check dates for new tax year 2008


    February 15 2008

    February 15, 2008

    • Last date for receiving updated Form W-4 that claims exemption from withholding :

      • Report 370-06-01 Income Tax Exemptions

      • If you do not receive an updated form, you willto modify the P010 screen to reflect Single and Zero (system default) or the previous non-exempt form in the employee’s file. (IRS will accept either of these options)


    Questions4

    Questions?


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