ADS Special Pays, Check-EFT Returns

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1 ADS Special Pays, Check-EFT Returns Defense Finance and Accounting Service INDIANAPOLIS PAYROLL OFFICE 2018 Kristin Beck John Means

2 Topics Special Pays W2c s for Special Pays Check/EFT Returns Replacement Checks - DD Form 2660 Health Savings Account (H.S.A.) 5/18/2018 2

3 SPECIAL PAYS 5/18/2018 3

4 Special Pays Request must be submitted on a Remedy ticket Employee must have received less than 90% of base pay DoD FMR Volume 8, Chapter 8, section : Special Payments Overtime, night differential, etc will be included if regular time was missed Cannot be paid without corresponding missing time Lump Sum Leave is not able to be paid Only one social security number per ticket Four pay periods can be requested on one ticket Must have reason for special pay Personnel (NTE, SF50, RTD) Time not Certified System Interface Error Timecard must be in the DCPS system in order to process a Special Pay 5/18/2018 4

5 Special Pays - CSR CSR tasks: Indicate number of hours missing Verify employee has record in DCPS Ensure employee is not on T&A invalid report P6608R01 Verify that employee has sufficient leave Donated leave has been input with sufficient balance to cover Verify time has been input Work schedule matches input time A in work schedule (not P) Employee does not have default address Employee has correct EFT information in DCPS State reason for the Special Pay We experience an increase in special pay requests in the first two pay periods of each year, across all customers 5/18/2018 5

6 Special Pays - PRO Payroll Office will process special pay Remedy tickets within 3 business days. Payment will be received by customer 3-5 days after certification We will return the ticket if: Employee is on T&A invalid transaction report 6608R01 Retro T&A not in system Employee paid more than 90% of base pay Request for other than base pay Firefighters are an exception Debt collection- causing an employee to receive less than 90% of base pay If employee was erroneously separated and received payment for lump sum leave (more than regular pay) that debt needs to be offset, we will not pay out additional funds 5/18/2018 6

7 ADS Voucher for Special Pay In this example, we processed a special pay for the net amount of $ /18/2018 7

8 PRO Processes AC Action to Clear Special Pay Against the Retroactive Payment This action ensures that the employee only receives funds once and accounts for payment on W-2 Remember, the payment was released directly to the employees bank, outside of the payroll system 5/18/2018 8

9 MyPay LES LES shows Special pay deduction in Deductions Block Net Pay indicates current pay period payment 5/18/2018 9

10 Special Pays Notes No Social Security Number at top of Remedy ticket Dashes in SSN field Detail field is missing/not completed within Remedy ticket Do not put SSN in Details, not PII compliant T&A Invalid Report has not been cleared Employee s record is not updated EFT, Address, Time and Attendance, SF50 Please always be aware of the pay schedule, especially around holidays, to ensure all timecards are input timely Ensure your Client File in Remedy is updated so you can receive payroll notifications/messages Default Address for employees is updated with actual residence address Agency TABLE address is updated Many old Agency addresses are in our system A check sent to an incorrect address is not a Special Pay but a Check/EFT not received If a timecard change is processed to replace leave only (replace LA with RG, etc.), a Special Pay ticket is not necessary as the employee received a full payment Check to see if employee received full hours of pay, if they did, just submit changes to timecard 5/18/

11 Special Pay Template 5/18/

Total Special Pays for 2017 4000 3630 3500 3000 2500 2544

12 Total Special Pays for CP1 OMA ZFA ZFR ZKA ZPV 11

Total Dollar Amount for Special Pays 2017 $5,000,000.00 $4,830,752.

00 $2,500,000.00 $2,392,258.97 $2,000,000.00 $1,500,000.

13 Total Dollar Amount for Special Pays 2017 $5,000, $4,830, $4,500, $4,000, $3,500, $3,250, $3,000, $2,500, $2,392, $2,000, $1,500, $954,060,36 $1,000, $500, $163, $343, $- CP1 OMA ZFA ZFR ZKA ZPV 12

14 Air Force Special Pays- trend Amount /18/

15 DoD Special Pays- trend 1,200 Amount 1, /18/

16 W2c for End of Year Special Pays A W2C is required on all special pays that are paid out to an employee during the last pay period of the year, and funds are received before 1/1, but are not set to retro until after 1/1 of the next year. We will have to process the W2C unless we are able to make adjustments before W2s are issued. ADS technician will process the special pay as normal, basing all amounts on the retroactive calculations. For Taxes, per IRS Publication 15, Supplemental wages are taxed at 22% for Federal; we process 6% for State, and 4% for Local. (Prior to 2018, the Supplemental Wages were taxed at 25%) No AC will be put in DCPS. Instead, all retro will be offset The W2 is corrected to reflect the subject to wages and deductions that were paid in the special pay. 5/18/

17 Special Pay Calculations Most Special Pays are calculated based off retroactive funds processing through DCPS.

Special Pay Calculations Gross: $1866.40 WB: 27.

18 Special Pay Calculations Gross: $ WB: WD: WH: 7.65 WM: WP: XV: Net: $

19 Special Pay Calculations with a UON (FEHB deduction).

20 Special Pay Calculations with a UON (FEHB deduction).

Special Pay Calculations with a UON (FEHB deduction). Gross: $2285.60 UON: 73.

21 Special Pay Calculations with a UON (FEHB deduction). Gross: $ UON: JR: WB: WD: WH: 9.30 WJ: 6.60 WM: WP: Net: $

22 Special Pay Calculations- End of Year (EOY)

23 Special Pay Calculations- End of Year (EOY) **Please note that we do not deduct any Health (WG/UON) deduction or TSP (XV). These have attributable dates and we allow Integrity them - Service to -retro Innovation through the system. We do include Roth (JRN) since it is subject to taxes already.

Special Pay Calculations- End of Year (EOY) Gross: $3876.00 WH: 15.60 WI:.70 WJ: 35.70 WB: 3876.00 X 1.45%= 56.

24 Special Pay Calculations- End of Year (EOY) Gross: $ WH: WI:.70 WJ: WB: X 1.45%= WD: X 25%= WE: X 6%= WM: X 6.2%= WP: X.8%= Net: $

25 Special Pay Calculations: deductions not included Most deductions that are voluntary are not included in a Special Pay. These can Include the following: Garnishments Chapter 13 Dental/Vision FSA/H.S.A. Allotments Student Loans TSP Loans Debt deductions Overseas Allotments Military Deposits 401K Employees with Tax Levies cannot be paid a special pay as the funds must go to the IRS

26 Questions???? 15

27 CHECK/EFT RETURNS 16

28 Returned Electronic Funds Transfer (EFT) Reasons for Returned EFT: Incorrect Account Information Account Closed Account Frozen Recall/Direct Deposit Intercept Account Holder Deceased 5/18/

29 Returned Checks Reasons for Returned Checks: Invalid Address Incorrect Payee Case Terminated/Account Closed 5/18/

30 PRO Procedures Payroll office receives the M5501/M5801 report from DFAS-CL Disbursing Remedy tickets are only needed for outstanding requests after 10 business days from return date We process Net pay returns first, then allotments EFT reissued to the Net Pay account reflected in DCPS Ensure any employees with missed payments are updated timely in DCPS Hardcopy check is reissued if correct EFT information is not available. Check is sent to the address of record in DCPS PRO Technician deletes the erroneous EFT information in DCPS when funds are returned Returned Checks- if the funds were returned due to case termination (such as child support cases), the technician must have verification from the paralegal before reissuing the payment 5/18/

31 Check/EFT Return Frequent Issues Payroll office cannot return funds that have not been returned from the bank (showing in RCB2) Check/EFT Remedy tickets have a 10 business day turnaround, only submit if this timeframe has lapsed. If there is no address or EFT information in DCPS, the payment cannot be reissued New Hires and Separations US Treasury checks are issued for payments made after 2 pay periods after separation 5/18/

32 REPLACEMENT CHECKS DD FORM

33 Replacement Checks - DD FORM 2660 DD Form 2660 is Statement of Claimant Requesting Recertified Check. Form is completed for non-receipt of check Please read the certification block carefully Pull the form from website: Place cursor on DoD Forms, then choose DD Forms Click on Scroll down to DD2660 and click on it Under available file format click on PDF-Ext and form will appear 5/18/

34 Screen Print of Form DD2660 5/18/

35 DD FORM 2660 Processing Field Activity should fax the completed DD Form 2660 to GoDocs ( ), including the Line of Accounting in Block 15 and valid mailing address in Block 5. Block 5 should not be filled in with a direct deposit account Treasury regulations do not allow DFAS to reissue a lost check by EFT. We can only replace a check with a check Submit completed DD Form 2660 three (3) business days after the scheduled pay day Returns from bank through US Treasury normally are not back to DFAS until Tuesday after a Friday payday 5/18/

36 DD FORM 2660 Processing Employee must sign form certifying they have not received the check and will return any additional checks they may receive for the same payment Digital or Hand signature acceptable Indianapolis Payroll Office will forward completed DD Form 2660 from GoDocs to Disbursing Office for processing Disbursing Help Desk or Disbursing processes the successor check 5/18/

37 Questions???? 5/18/

38 Health Savings Account (H.S.A.) Health Savings Account (H.S.A.) 5/18/

39 Health Savings Account (H.S.A.) Defined An H.S.A. is an account that an employee funds with pretax earnings to cover current and future qualified medical expenses. 5/18/

40 Health Savings Account (H.S.A.) Defined 5/18/

41 Health Savings Account (H.S.A.) Regulations/Guidelines Volume 8, Chapter 11; IRS Publication 969 (2013) H.S.A. Account should be established using an H.S.A. trustee Bank, Insurance company, or anyone already approved by the IRS to be a trustee Employee must be enrolled in a high deductible health plan (HDHP) and must not be covered under any other health plan Employee must not be enrolled in Medicare Employee cannot be claimed as a dependent on someone else s tax return 5/18/

42 2017 HDHP Health Plans GEHA and Mail Handlers are available nationwide. Plan GEHA Mail Handlers Aetna HealthFund Altius Health Plans AultCare CareFirst Blue Choice Group Health Cooperative Independent Health Association KPS Health Plans TakeCare UPMC Health Plan United Healthcare Parts of: National National 50 states and District of Columbia Idaho, Utah, Wyoming Ohio DC, Maryland, Virginia Idaho, Washington New York Washington State Guam Pennsylvania Alabama, Arkansas, Louisiana, Mississippi, Tennessee, Arizona, Colorado, Iowa 5/18/

43 Health Savings Account (H.S.A.) Regulations/Guidelines H.S.A. shows as JX on the Pay History H.S.A. is funded with pretax money and may be used to cover current and future qualified medical expenses H.S.A. allotment will continue until the employee revokes or modifies the allotment election The 2018 Maximum amount for HDHP $3,450 for Self $6,900 for Family 5/18/

44 Health Savings Account (H.S.A.) Rejected H.S.A s All returned H.S.A. s are returned under Pseudo SSN s When an H.S.A. payment is rejected from the account, it is returned to the Payroll Office (PRO) in the same manner as a rejected EFT PRO Identifies who the return is for Determines if the account has been updated in DCPS If the H.S.A. account number has been updated, the PRO will not touch it in DCPS and will reissue to the updated account If the H.S.A. account number is the same, the PRO will delete the H.S.A. allotment from DCPS to prevent continuous returns/rejects in future pay periods 5/18/

45 Health Savings Account (H.S.A.) Rejected H.S.A s Returned H.S.A. funds are considered taxable income and are subject to Taxes, Medicare, and OASDI. DCPS does not allow for the PRO to input an H.S.A. refund (negative JX). The PRO work-around is to enter a positive Regular Earnings (RA) adjustment in the amount of the returned H.S.A. This allows the refund to pay out to the employee as taxable income. DCPS will automatically deduct all associated taxes, Medicare, and OASDI The PRO then corrects the employee s year-to-date payroll record by processing a negative JX adjustment to decrease the amount of H.S.A contributions Processing the RA and negative JX adjustments ensures the employee s H.S.A. W-2 amounts are properly reported for the tax year 5/18/

46 Health Savings Account (H.S.A.) W2c & Debt If the H.S.A. has been set up into a personal account and the employee is not entitled to the H.S.A., there will be no rejected funds. In this situation, the CSR/HR must notify the PRO (via Remedy) so that a W2c can be processed. Select Remedy Title W2 Refer Remedy ticket to the ADS Team ADS Team processes the W2 and will: Reduce the H.S.A. (JX) amount Increase Subject to Federal Tax/State/Local Tax, Subject to Medicare, and Subject to OASDI (if applicable) Increase associated Medicare and OASDI (if applicable) Establish a debt for the increased Medicare and OASDI that was added to the W2c since the employee owes this money back 5/18/

47 QUESTIONS??? 5/18/

ADS Special Pays, Check-EFT Returns

ADS Special Pays, Check-EFT Returns Defense Finance and Accounting Service Eileen Rehner 2018 Topics Special Pays W2c s for Special Pays Check/EFT Returns Replacement Checks - DD Form 2660 Health Savings