Office of the New York State Comptroller

Procurement and Disbursement Guidelines

Bulletin Number: A-556/P-615
Date Issued: 1/4/2006 Date Last Updated: 1/4/2006
Bulletin Name: Entering Taxable Travel Amounts in PayServ for W-2 Reporting
Purpose:

To provide agencies with payroll reporting instructions for a taxable travel expense reimbursement that exceeds the payment to the employee. This situation can occur when the employee uses a State travel card.

 
Background:

Taxable travel expense reimbursements are subject to tax withholding and are required to be reported on Federal Form W-2. Taxable travel reimbursements are normally entered into the Central Accounting System (CAS) on a travel voucher with a payment to the traveler coded with ‘T’ in the IRS Code, and the amount subject to reporting and withholding entered in the IRS Amount field. Taxable amounts are then sent from CAS to PayServ where these amounts are subjected to tax withholding and included in wages on W-2s.

To prevent a large amount from being erroneously subjected to W-2 reporting and tax withholding, there are CAS edits that prevent the IRS Amount from being larger than the payment amount. For example, if a voucher reimbursed an employee $30 for personal car mileage and $50 for a taxable meal, the CAS would allow up to $80 to be entered in the IRS Amount field of the voucher. However, if the employee used the State travel card to pay the restaurant for the $50 taxable meal expense, the travel voucher submitted by the employee for reimbursement would be for $30. Since the taxable expense of $50 would be greater than the $30 voucher submitted for reimbursement, only $30 could be reported as the taxable amount on the voucher.

When an IRS Amount exceeds the payment to the employee, agencies must enter Taxable Amount directly in PayServ as instructed below. The amount entered into PayServ will be either the entire Taxable Amount (i.e. no IRS Amount was entered in CAS) or the remainder of what was entered in CAS. In the example above, if $30 were entered in the IRS Amount on the voucher, the agency must report $20 taxable expense into PayServ.

 
PayServ Instructions:

For 2006, agencies must enter the taxable value using the Earn Code TXE (Taxable Expense) into the payroll system on the Time Entry pages or through the agency Miscellaneous File. For information regarding submission of Time Entry transactions, see Payroll Bulletins No. 408 and 490.

To properly report these taxable values for 2005 and to eliminate the need for corrected W-2s, agencies must report the TXE amounts to the Bureau of State Payroll Services no later than January 10, 2006 using the attached form. The form can be faxed to the Deductions Section at (518) 486-3099. Note that OSC will calculate a Social Security/Medicare deficiency and will deduct this from the next available paycheck.

In the event 2005 taxable amounts are reported after January 10, 2006, the agency must issue a corrected W-2 to the employee.

The process to produce a corrected W-2 for TXE follows:

  • Add EXP (tax exp amount) to Box 14
  • Add EXP amount to the following wages:
    • Box 1 (gross)
    • Box 3 (SS wage unless at the max of $90,000 for 2005)
    • Box 5 (Med wage)
    • Box16 (state wage)
    • Box 18 (city wages if any)
  • Update SS/Med tax:
    • Box 4 (exp amount multiplied by .062 unless at the max of $5580 for 2005)
    • Box 6 (exp amount multiplied by.0145)
    • Note: the SS/Med tax will be data entered as a deficiency for a future paycheck.
  • Type Corrected on top of the new W-2 and fax to Eileen Fink at (518) 486-3099 for review. Do not release a corrected W-2 to an employee until it is approved by OSC.

 
Reminders:

Agencies are strongly encouraged to continue use of the State travel card even when this requires entry of IRS Amounts directly into PayServ.

Refer to A555/P597 for instructions on the Year-End Procedure for Taxable Travel Reimbursements.

 
Questions: