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New York State Accounting System User Procedures Manual

Volume Name
CONTROLS AND SPECIAL PROCEDURES
Volume
XI
Date
10/13/05
Section Name
Excess (Taxable) Payments to Employees -Voucher Processing/Payroll Interface
Section
8.0140

     This section explains how to complete the IRS Amount field on travel vouchers to allow the CAS to automatically generate transactions for the Payroll System. Use the procedures described in this section for applicable travel vouchers and quick pay travel vouchers.

VOUCHER PROCESSING

Travel vouchers with taxable reimbursements must be prepared as follows:

If an Excess (Taxable)
Amount is paid to a

traveler, and...
the agency must...

1. the traveler either..- received no advance, or- has a continuous advance, 1. process a travel voucher through the CAS, payable to the traveler with a 'T' in the IRS Code and the taxable amount in IRS Amount
2. the traveler received an 'occasional' advance which was ...

a. less than the total travel reimbursement,

b. equal to or greater than the total travel reimbursement,

(NOTE: In this instance, the traveler will not receive a payment through the CAS.)

2a. process a travel voucher through the CAS with two payees (one payment to the traveler and one payment to advance account). The payment to the traveler must have a 'T' in IRS Code and the taxable amount in IRS Amount. (The taxable amount can exceed the Payment Amount to the traveler.) The travel advance account reimbursement payment must have a blank IRS Code and blank IRS Amount.

2b. submit a Taxable Expense Corrections form to the Payroll System as explained on pages 4 and 5 of this section. (Agencies should take steps to ensure that advances do not exceed reimbursable expenses in order to minimize the use of this form.

CAS VOUCHER EDITS

     The following CAS edits control the processing of travel vouchers containing taxable amounts:

1. If the IRS Code is 'T', the batch type must be VRT, VTR, VTS or KTV and the IRS Amount must be greater than zero.

2. If an IRS Amount is entered, the IRS Code must be 'T', and the total IRS Amounts cannot exceed total payment amounts on the voucher. (The system allows multiple payees with IRS Amounts on one voucher.)

3. If the IRS Code is 'T' and a valid IRS Amount is entered, the system will verify that the Payee ID (employee's Social Security Number) and employee's last name has an EXACT match on the payroll file. If an exact match is not found, error message "INVALID PAYEE ID" will be issued and the voucher will not process.

     Payee Names must be entered in the following format: Last Name, First Initial, Middle Initial. No spaces or special characters such as apostrophes may be entered within the last name. If you are unable to match on Social Security Number and Name, refer to your agency's Salary Register.

CAS REPORTS

     Agencies receive a monthly VOU943, Listing of Taxable Employee Travel Payments by Agency. This report lists Taxable Amounts on vouchers which were paid by the CAS during the month and have been transferred to the Payroll System for withholding and reporting. This report prints at agency printers. Agencies without printers receive this report through OSC distribution.

     In December only, one or more weekly VOU943 reports will be distributed to agencies, reflecting taxable employee travel payments made during the beginning of December and transferred to the Payroll System for automated withholding and reporting for the calendar year.

     The VOU943 should be used to confirm Taxable Amounts processed through the CAS during the month. If OSC receives notification of a fine levied by IRS for inaccurate or incomplete reporting of these taxable amounts, the fine will be charged to the responsible agency.

CAS/PAYROLL DATA TRANSFER

Monthly Processing

     Taxable expense data is collected by the CAS on a monthly basis. The data is transferred to the Payroll System at the beginning of the next month and applied to the next payroll processed. The taxable expense amount is added to the biweekly gross prior to the calculation of Federal, State and Social Security/Medicare taxes. Since the taxable expense reimbursement was already paid as a result of the travel voucher, no additional amount will be paid on the payroll check.

     The taxable expense amount appears on the employee's check stub in the ADDT'L SAL INFO block with the code TXE and is included in the YTD GROSS amount. It also appears on the Salary Register and in the YTD GROSS and YTD TAX EXP on the PRG-1, Payroll YTD Summary Register.

     Payments to inactive employees may be processed through the CAS. If an employee has become inactive in one agency but is active in another, the Payroll System will apply the taxable expense amount where the employee is active. If the only employee record found on the Payroll System is inactive when the monthly data from CAS is processed, the employee's YTD GROSS and the YTD Taxable Expense in that record will be updated and reported on the W-2.

     Agencies receive an accepted taxable expense transaction listing with their salary registers.

Calendar Year-End Processing

     For December payments, the monthly transfer of taxable expense data prevents standard payroll processing for withholding and reporting in the appropriate calendar year. To maximize the automated process, taxable expense amounts paid in early December will be transferred to Payroll in one or more weekly processes in December. The number of weekly transfers will vary each year, depending upon the year's accounting and payroll cycles. Specific dates will be published in a joint Accounting/Payroll bulletin each fall.

     The end of December process will then transfer only taxable expense amounts paid in December after the last weekly transfer. For these amounts, payroll will prepare Social Security/Medicare deficiency transactions and update employee YTD Gross. Federal, State and Local income taxes will not be withheld from these transactions. The Social Security/Medicare deficiency will be processed against the employee's first paycheck in January of the next tax year (unless the employee has already paid the maximum annual social security amount for the preceding year).

PAYROLL ADJUSTMENTS

     Payroll adjustments can be processed using the Taxable Expense Corrections form. All adjustments require completion of the Line Number, Employee Name, Social Security Number and Correct Taxable Expense Amount blocks.

     As soon as the need for adjustment has been identified, prepare and send the Taxable Expense Correction form to OSC as explained below.

A. To correct an amount of taxable expense previously reported - Enter the Correct Taxable Expense Amount, and the Incorrect Taxable Expense Amount previously reported. Payroll will update the employee's YTD GROSS and YTD Taxable Expense.

B. To report taxable expense amounts which should have been but were not reported through the CAS - Enter the taxable expense amount. Payroll will update the employee's YTD GROSS and YTD Taxable Expense. Federal, State and local income taxes will not be withheld on the taxable expense amount but Social Security/Medicare taxes will be. The taxable expense amount will be reported on the W-2.

C. To report taxable expense amounts when an 'occasional' advance equals or exceeds total reimbursements (no voucher processed through the CAS) - Enter the Correct Taxable Expense Amount. Payroll will update the employee's YTD GROSS and YTD Taxable Expense. Federal, State and local income taxes will not be withheld on the taxable expense amount but Social Security/Medicare taxes will be. The taxable expense amount will be reported on the W-2.

Send Taxable Expense Corrections forms to:

Office of the State Comptroller
Payroll Deductions - Tax Refund Unit
110 State Street - 8th Floor
Albany, New York 12236