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Date: January 5, 2010

Bulletin Number: 964

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Subject

Procedure Change for Prior Year SS/Med Tax Refunds

Purpose

To inform agencies of a change in OSC’s business practice.

Affected Employees

All employees who had a prior year compensable Workers’ Compensation case where New York State received a credit award from the State Insurance Fund which resulted in a decrease in the reported wages and Social Security and Medicare taxes.

Effective Date(s)

Immediately.

Background

Previously, refunds of Social Security and Medicare taxes were remitted to employees as soon as the OSC Workers’ Compensation Unit processed a NY State Insurance Fund form C8EMP.  Employees were also mailed a corrected form W-2 (W-2C) to inform them of changes in their reported wages.  OSC will no longer immediately issue the Social Security and Medicare tax refund when the C8EMP form is processed.

OSC Actions

The OSC Workers’ Compensation Unit will continue to process the NY State Insurance Fund form C8EMP and mail form W-2C to employees on an ongoing basis.  However, the Social Security and Medicare tax refund will no longer be remitted to employees until OSC receives the refund amount from the Federal Government. OSC will continue to request these refunds with the required Quarterly Payroll Tax Reports submitted to the IRS.

The Quarterly reporting schedule is as follows:

Quarterly Dates

Month Reported to IRS

January 1 – March 31

April

April 1 – June 30

July

July 1 – September 30

October

October 1 – December 31

January

As refund monies from the IRS become available, OSC will remit the prior year Social Security and Medicare tax refund to the employee.  There is a minimum 2 month processing period for responses from the IRS.  OSC has no control over the length of time it takes the IRS to process the refunds or the order in which they are processed.

The OSC Workers’ Compensation Unit will continue to provide agencies with a listing of employees receiving a refund when the refunds are paid.

Note: Corrected Form W-2’s (W-2C) are printed monthly and mailed directly to employees.  Upon receipt, employees may use the W-2C to amend their prior year taxes.  Employees must not use the W-2C to file a claim for an additional refund of Social Security and Medicare taxes from the IRS and must complete Form AC 3206 (Prior Year Social Security and Medicare Tax Refund Certification) and submit it to the agency.

Agency Actions

Agencies may refer to General Comments and the Workers’ Comp Refund page for information regarding Credit NYS wage adjustments which result in SS/Med refunds and for information regarding the status of a refund.

Agencies may also review Bulletin 416 (Prior Year Tax Refunds Resulting from Workers’ Compensation Board Awards) for information regarding the processing status of a refund and Bulletin 831 (Monthly Processing of Form W-2C) for more information regarding the automated W-2C printing process.

Agencies should notify employees of the change in procedure and the resulting longer period of time between their receipt of a W-2C and their refund.

Employees must not be referred to the OSC Workers’ Compensation Unit.

Control-D Report

Control-D Report TAX921 will continue to be available for agency review and provides a listing of employees receiving a Form W-2C.

Questions

Questions regarding the processing of C8EMP forms may be directed to the Workers’ Compensation mailbox.

Questions regarding the Form W-2C may be directed to the Tax and Compliance mailbox.