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Date: November 24, 2015

Bulletin Number: 1443

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Subject

End of Year Refund of Social Security and Medicare Taxes Withheld While on Workers’ Compensation (WSM)

Purpose To explain how OSC will process Social Security and Medicare refunds for employees whose refunds were not completed timely throughout the year due to late agency processing of PayServ Job Data transactions.

Affected Employees

All employees who did not receive refunds of Social Security and Medicare taxes, or received a portion of such refunds due to late agency processing of PayServ Job data transactions.

Background

In Payroll Bulletin No. 1366 agencies were notified that OSC created new leave codes for employees placed on a compensable Workers’ Compensation leave receiving full pay. Beginning the first pay period of January 2015, agencies were instructed to place employees out on PLA/WCF or PLA/SWC. These leave codes were created for OSC to refund employees’ Federal, State, Social Security/Medicare biweekly taxes withheld during the current year. 

OSC planned to process quarterly “clean ups” to correct employees that were placed on the paid Workers Compensation codes late. However, due to the large volume of late agency transactions, OSC was unable proceed with the cleanup for the affected employees as planned.

Effective Date(s)

Using the WSM code, OSC will automatically process Social Security/Medicare refunds only, to be paid in the Institution check dated December 24, 2015 and Administration check dated December 30, 2015.

OSC Actions

OSC will create a program to ensure that employees who were not processed timely will receive the appropriate Social Security/Medicare refund and that the employee’s 2015 W-2 will be correct.

Due to the late entry of the Job Data transactions, OSC will not refund Federal, State, and Local income taxes. Employees will be able to obtain their refund of the Federal, State and Local (if applicable) income taxes when they file their tax return for tax year 2015.

Agency Actions

Agencies should inform affected employees that they will receive the SS/Med Refund (WSM) in the applicable check listed above and that their 2015 W-2 will be correct.

Agencies should also inform these employees that due to the late entry of the Job Data transactions, OSC cannot refund Federal, State, and Local income taxes and employees will be able to obtain their refund of the Federal, State and Local (if applicable) income taxes when they file their tax return for tax year 2015.

The following information should be used by Payroll Officers to help explain to employees the series of documents they may receive that make the adjustments covered by this payroll bulletin.

Among other things, PayServ is used to track wages for tax calculations.  When tax adjustments occur, employees may receive up to four documents in one pay period.  The documents are:

  1. A regular payroll check(s) along with the informational advice (stub).
  2. A check refunding Social Security and Medicare taxes along with the informational advice (stub) reducing Social Security and Medicare taxable wages.
  3. An informational advice (stub) reducing Federal taxable wages as well as Federal taxes owed. Any Federal taxes to be refunded to employees will be handled by the employee when they file their 2015 Federal income tax return.
  4. An informational advice (stub) reducing State and Local, if applicable, taxable wages. Any State and Local taxes to be refunded to employees will be handled by the employee when they file their 2015 State and Local, if applicable, income tax returns.

Questions

Please direct all questions to the Workers’ Compensation Mailbox.