W2 Procedures and 2017 Timelines November 21, 2017

Transcription

1 Mary Jane Burke Marin County Superintendent of Schools District Business Services Business Bulletin W2 Procedures and 2017 Timelines November 21, 2017 Purpose To provide guidance to district payroll and business offices in procedures to facilitate the annual audit and reconciliation of payroll history reports and data for certification of W-2 processing. The guidance also includes processing timelines for calendar year 2017 reporting. Additional Local Guidance Please see Business Bulletin Year End Payroll Adjustments for detailed guidance relative to the various adjustments required by federal or state statute and or regulation to accurately prepare the annual W2 reports. Procedures to facilitate the annual audit and reconciliation of W2 data 1. Run pay history report [PAY830] for all employees paid during calendar year after the December EOM payroll run on December 19, Run a W2 Prelist [W2SB17] 3. Reconcile totals pages of each report see example attached 4. Per the following pay code/retirement system coding combinations, determine if the appropriate retirement, OASDI and Medicare deductions were taken for each employee: CODE DESCRIPTION PC RS 01 1 STRS/Medicare (No Medicare for Pre-86 Exempt) 01 2 PERS/OASDI/Medicare 01 3 Medicare 01 4 Medicare 01 5 OASDI/Medicare 02 1 STRS/Medicare (No Medicare for Pre-86 Exempt) 02 2 PERS/OASDI/Medicare 02 3 Medicare 02 4 Medicare 02 5 OASDI/Medicare Code Description: Column 1 PC or Pay Codes are: 1 = Certificated 2 = Classified Code Description: Column 2 RS or Retirement Systems are: 1 = STRS, 2 = PERS, 3 = STRS Retired, 4 = PERS Retired, 5 = None

2 Procedures, continued 5. Review Federal gross to OASDI gross to MEDI gross for all employees on the W2 prelist: a) If all three gross amounts are the same ensure is a classified employee b) If Federal and MEDI gross are the same but there is no OASDI ensure the employee is contributing to STRS (usually a certificated employee) c) If there is no OASDI gross or MEDI gross and there is no STRS or PERS ensure the employee is a student (Check MA screen) d) If there is no OASDI, PERS or STRS gross but there is MEDI gross ensure the employee is a retiree e) If OASDI gross is lower than MEDI gross check for certificated sub working as a ParaEducator on the PR screen. f) If Federal gross is higher than OASDI and/or MEDI gross verify that Section 125 items are the difference. g) If Federal gross is less than OASDI and/or MEDI gross, verify that CAR is the difference. h) Verify any *Pre-86 Exempt employees and students (Pre-86 exemption covers those employees in continuous employment who were hired before April 1, 1986, and who are active members of STRS. This is not a voluntary exemption and your district cannot opt out without a special election negotiated by your district and approved by the IRS and STRS for employees electing into Medicare coverage) i) Look for # or? to the left of the SSN: # means no earnings (ghost record on prelist) and no W2 will be generated.? means there is an issue with the Social Security number that will need to be researched and resolved. Page 2

3 AUDIT GUIDANCE 1. Check to see that Canceled Warrants and Repayments have been entered by the County Office, as requested. 2. Check the limit on TSA contributions: An employee s annual TSA contribution should not exceed $18,000. We strongly suggest that you document and verify all TSA contributions. Be sure you have adequate information on TSA contributions that exceed the $18,000 limit as a protection for your district. 3. Also, verify any TSA Catch-up Contributions: If an employee is age 50 or older by the end of the calendar year, they may be permitted to make additional Catch-up Contributions of up to $6,000 to a 403(b) plan. 4. Please verify and provide a list of any employees who have elected health care coverage for their domestic partner (must be registered). AB25 provides that the taxpayer s domestic partner be treated as the spouse of the taxpayer for the purpose of reducing state taxable gross for medical expense reimbursement deductions. 5. Effective January 1991, employees must contribute to one of the following: STRS, PERS, OASDI. 6. All employees pay Medicare except active members of STRS with Pre-86 Exemptions or Students working while enrolled in classes in the school they are working for. Students must pay OASDI/Medicare when not enrolled in classes in the school they are working for. Examples: During the summer a Dixie student works for San Rafael Elem or a secondary student works at an elementary school in your district. The OASDI and/or Medicare gross will be reduced by the Section 125 Tax Sheltered amounts which appear in the NTX-GR Column. There may be other amounts in the NTX- GR Column that do not reduce the OASDI/Medicare Gross, such as APPLE alternate retirement contributions for employees. Add the Tax-GR, NTX-GR, TSA, STRS-TS and PERS-TS together, this should equal the Gross. Any variance should be determined and a Request for Pay History Adjustment form should be completed and forwarded to the County Office so the error is corrected. BEST PRACTICE: Perform payroll history audits on a quarterly basis Page 3

4 CUTOFF DATES FOR W-2 PROCESSING: December 15 December 15 Process TRAVEL ALLOWANCE adjustments for reportable compensation on the EOM Process CAR adjustments using an imputed payline and imputed StatDed on the EOM Process adjustments for group-term LIFE INSURANCE using Vol-Ded 8999 on the EOM Process adjustments for WORKERS COMPENSATION / DISABILITY on the EOM to adjust taxable income for the 2017 tax year Process adjustment to Federal taxable income for the value of benefits provided to a domestic partner on the EOM December EOM due Cancelled warrants issued between January 1 Dec 13, 2017 due to MCOE December 25 January 5 MCOE Offices closed. We will be monitoring please send any issues / problems / inquiries via to klane@marinschools.org and or agramajo@marinschools.org January 2 January 5 District Business Services staff return to work at MCOE. Last day to submit Cancelled warrants issued on the December RETRO dated 12/18/17 & EOM dated 12/22/17. January 5 Last day to submit adjustments to pay history to reflect on W2. January 5 January 10 January 10 January 26 January 31 Last day to submit Third Party Sick pay statements for inclusion on the W2 as applicable. Please advise us if your district had any employees pass away while employed in Last day to enter name and address changes to the MA screen before the W2 Extract. W2s released to Districts for mailing. Last day to mail W2s to employees. If you have any questions, please call or Andy Gramajo at (415) / agramajo@marinschools.org or Kate Lane at (415) / klane@marinschools.org. Page 4

5 W2 Prelist Review Reconcile PAY830 to W2 Prelist Check employee totals: o FEDERAL GROSS = OASDI GROSS = MEDI GROSS, okay for classified employees o No OASDI GROSS, but there is MEDI GROSS, okay for STRS members and retirees o No OASDI GROSS, no MEDI GROSS, okay for student workers o * to the left of SSN means negative gross o? to the left of SSN means SSN not valid according to Social Security Administration standards o Limit on TDS/TSA contributions for 2017: $18, if over the age of fifty additional catch up of $6,000.00