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 2017 Integrity - Service - Innovation

2 Topics Special Pays W2c s for Special Pays Check/EFT Returns Replacement Checks - DD Form 2660 Health Savings Account (H.S.A.) 4/17/2017 Integrity - Service - Innovation 2

3 SPECIAL PAYS 4/17/2017 Integrity - Service - Innovation 3

4 Special Pays Request must be submitted on a Remedy ticket Employee must have received less than 90% of base pay Does not include overtime, night differential, etc Cannot request special pay for lump sum leave 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 4/17/2017 Integrity - Service - Innovation 4

5 Special Pays - CSR CSR must: Indicate number of hours employee should be paid Verify employee has record in DCPS Ensure employee is not on T&A invalid report Verify that employee has sufficient leave Donated leave has been input with sufficient balance to cover Time has been input Employee does not have default address Employee has correct bank info in DCPS State reason for the Special Pay 4/17/2017 Integrity - Service - Innovation 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 Reason for special pay not indicated 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 4/17/2017 Integrity - Service - Innovation 6

7 ADS Voucher for Special Pay In this example, we processed a special pay for the net amount of $ /17/2017 Integrity - Service - Innovation 7

8 PRO Processes AC Action to Clear Special Pay Against the Retroactive Payment 4/17/2017 Integrity - Service - Innovation 8

9 MyPay LES LES shows Special pay deduction in Deductions Block Net Pay indicates current pay period payment 4/17/2017 Integrity - Service - Innovation 9

10 Special Pays Notes No Social Security Number at top of Remedy ticket 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 up to date EFT, Time and Attendance, SF50 Please be always aware of the pay schedule around holidays to ensure all timecards are input timely Make sure your Client File in Remedy is updated so you can receive any payroll notifications/messages Default Address for employees is updated with actual residence address Agency TABLE address is updated If a timecard change is processed to replace leave only (replace LA with RG, etc.),then this is not a Special Pay since the employee already received pay Check to see if employee received full hours of pay, if they did, just submit changes to timecard 4/17/2017 Integrity - Service - Innovation 10

11 Special Pay Template 4/17/2017 Integrity - Service - Innovation 11

Total Special Pays for 2016 4000 3689 3500

267 0 Integrity - Service - Innovation CP1 OMA

12 Total Special Pays for Integrity - Service - Innovation CP1 OMA ZFA ZFR ZKA ZPV Integrity - Service - Innovation 11

Total Dollar Amount for Special Pays 2016 $6,000,000.00 $5,079,971.70 $5,000,000.00 $4,000,000.00 $3,363,705.74 $3,000,000.00 $2,752,271.72 $2,000,000.

13 Total Dollar Amount for Special Pays 2016 $6,000, $5,079, $5,000, $4,000, $3,363, $3,000, $2,752, $2,000, $930, $1,000, $0.00 $103, $320, Integrity - Service - Innovation CP1 OMA ZFA ZFR ZKA ZPV Integrity - Service - Innovation 12

14 W2c for 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. 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 25% for Federal; we process 6% for State, and 4% for Local. 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. 4/17/2017 Integrity - Service - Innovation 14

15 Questions???? Integrity - Service - Innovation Integrity - Service - Innovation 15

16 CHECK/EFT RETURNS Integrity - Service - Innovation Integrity - Service - Innovation 16

17 Returned Electronic Funds Transfer (EFT) Reasons for Returned EFT: Incorrect Account Information Account Closed Account Frozen Recall/Direct Deposit Intercept Account Holder Deceased 4/17/2017 Integrity - Service - Innovation 17

18 Returned Checks Reasons for Returned Checks: Invalid Address Incorrect Payee Case Terminated/Account Closed 4/17/2017 Integrity - Service - Innovation 18

19 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 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 4/17/2017 Integrity - Service - Innovation 19

20 Check/EFT Return Frequent Issues Payroll office cannot return funds that have not been returned from the bank (showing in RCB2) Check/EFT returns have a 10 business day turnaround 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 4/17/2017 Integrity - Service - Innovation 20

21 REPLACEMENT CHECKS DD FORM 2660 Integrity - Service - Innovation Integrity - Service - Innovation 21

22 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 4/17/2017 Integrity - Service - Innovation 22

23 Screen Print of Form DD2660 4/17/2017 Integrity - Service - Innovation 23

24 DD FORM 2660 Processing Field Activity should fax the completed DD Form 2660 to Imaging ( ), 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 4/17/2017 Integrity - Service - Innovation 24

25 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 Imaging to Disbursing Office for processing. Disbursing Help Desk or /17/2017 Integrity - Service - Innovation 25

26 Questions???? 4/17/2017 Integrity - Service - Innovation 26

27 Health Savings Account (H.S.A.) Health Savings Account (H.S.A.) 4/17/2017 Integrity - Service - Innovation 27

28 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. 4/17/2017 Integrity - Service - Innovation 28

29 Health Savings Account (H.S.A.) Defined 4/17/2017 Integrity - Service - Innovation 29

30 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 4/17/2017 Integrity - Service - Innovation 30

31 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 4/17/2017 Integrity - Service - Innovation 31

32 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 2017 Maximum amount for HDHP $3,400 for Self $6,750 for Family 4/17/2017 Integrity - Service - Innovation 32

33 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 4/17/2017 Integrity - Service - Innovation 33

34 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. W2 amounts are correct for the tax year 4/17/2017 Integrity - Service - Innovation 34

35 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 4/17/2017 Integrity - Service - Innovation 35

ADS Special Pays, Check-EFT Returns

ADS Special Pays, Check-EFT Returns Defense Finance and Accounting Service INDIANAPOLIS PAYROLL OFFICE 2018 Kristin Beck John Means Topics Special Pays W2c s for Special Pays Check/EFT Returns Replacement