Purpose

The purpose of this bulletin is to provide general guidance on services and processes of the Bureau of State Payroll Services Tax Administration Unit.

Affected Employees

All employees are affected.

Effective Dates

Effective immediately.

Agency Actions

Agency Inquiries/Requests

• All tax-related inquiries must be submitted in writing to the Tax and Compliance mailbox.  Do not send emails to bureau employee mailboxes.
• The mailbox is intended to be used by agency payroll officers only, not employees or third parties.  Requests must originate from the State agency payroll office, not individual NYS employees.
• In the email subject line, list the EmplID, the employee name, and the type of request (e.g., Reissued Forms W-2, W-2c/Corrected W-2, SS/Med Refund Request (Year), NYC/Yonkers Income Tax Refund Request, etc.  All emails must contain the employee ID # and accurate spelling of the employee name.  Please do not submit the employee’s Social Security number, in part or whole.
• Depending upon the type of request, additional information may be required including:  Department ID/Agency Code, the applicable tax year, an explanation of the request, and any supporting documentation and calculations.  When OSC requests additional information, please respond as quickly as possible.  OSC attempts to respond to inquiries/requests in three business days.
• Agencies are not to provide OSC staff contact details to employees without permission.

Bulletin Board Messages (BBMs)

These messages contain instructions, important dates, reminders, announcements, and W-2c batch numbers that could aid in answering a variety of payroll related questions from employees.  Bulletin board messages do not remain viewable in PayServ indefinitely.  Therefore, OSC urges agencies to create and maintain a tracking document of all announcements.

Corrected W-2 (W-2c)  Definition:  A correction to previously reported data on an employee’s Wage and Tax Statement (W-2).

• Only the affected W-2 boxes are populated on a Corrected W-2.  It should be used in addition to the original Form W-2.
• When requesting a Form W-2c, an agency must explain why a correction is necessary.  Backup documentation should be provided as a scanned (pdf) attachment.
• The IRS does not require a corrected Form W-2 for an address change.
• There is a blackout period for Form W-2c processing from mid-December to mid-February due to year end processing of Forms W-2, 1099-Misc, Credit Letters and 1042-S.  After the blackout period ends, the priority is processing the W-2cs for the year in which the Statute of Limitations is expiring.  OSC will begin processing W-2cs for the current and prior years only when the W-2cs for the expiring year have been completed.
• In general, from May through early December, Form W-2cs are printed on the first Monday of the month.  From mid-February through April, they are printed as required.
• When Form W-2cs are issued, agencies are informed via a PayServ BBM that lists the batch numbers, a general description of why the Form W-2cs are being issued, and other pertinent directions to be followed.
• Employees should allow two weeks from the time the W-2cs are issued by OSC to receive it in the mail.
• IRS regulations require employers to make a reasonable effort to contact employees and obtain their consent when a FICA refund is due.  Agencies are required to review the NTAX722 Control-D report (Agency W-2c Report) and complete a Form AC3206 (Prior Year Social Security and Medicare Tax Refund Certification) for every employee who is due a Social Security/Medicare (SS/Med) tax refund.  OSC recommends that agencies document and track their efforts providing this form to employees.  Agencies must provide this completed form to their employee(s) for signature.  The form must be returned to the agency, allowing sufficient time to check the AC3206 checkbox in PayServ, by the due date listed in the bulletin board message.  If an Agency does not see an NTAX722 report for their agency, there were no corrected Form W-2s for their employees.
• Agencies can refer to the corrected Form W-2 in PayServ to identify the batch number that it was issued under.  Enter “W-2c” in the Search box and save it as a favorite for future reference.  Agencies can review BBMs and the employee’s Paycheck Data history in PayServ to determine if the refund has been issued to the employee.
• There are two reasons why an agency may not be able to locate an employee on the NTAX722 report:
  • An employee needed a corrected Form W-2 that did not impact any dollar amount.  The NTAX722 report only lists employees who had a change to a previously reported amount in a W-2 box (i.e., if a corrected Form W-2 is requested because the Retirement Box needs to be unchecked, it will not appear on the NTAX722 report).
  • If the employee worked at a different agency during the year, the corrected Form W-2 may be listed under that agency.
• Agencies should retain copies of the NTAX722 reports for four (4) years, noting the batch number listed on the report.
• Form W-2cs are mailed directly to an employee’s current mailing or home address reflected in PayServ.

AC3206 (Prior Year Social Security and Medicare Tax Refund Certification)  Definition:  An OSC form that is utilized to obtain consent from an employee to file a claim for a Social Security and/or Medicare tax refund from the IRS.  OSC cannot file for a refund without an employee’s consent. 

• This process changed in December 2014 with the implementation of the checkbox in PayServ.  Bulletin No. 1364 was issued, and subsequently revised, explaining this process in detail.

Reissued Form W-2s  Definition:  A reprint of originally issued Form W-2.

• Agencies can reprint Form W-2s dating back to 2011.  Enter “W-2 Reprint” in the Search box and save the path for future reference.
• Employees with access to NYSPO can also reprint their Form W-2s.
• Reissued Form W-2s for years prior to 2011 must be created and issued by OSC.  They are mailed directly to the requesting agency for distribution to the employee.

Reissued Form W-2cs  Definition:  A copy of the most recent Form W-2c issued.

• A Reissued Form W-2c can only be issued after all new requests for Form W-2cs have been printed (depending upon the schedule as noted in the “Corrected W-2 (W-2c)” section of this bulletin).  They are mailed by OSC to the employee at their current address in PayServ.

Lock-in Letters  Definition:  A special order by the IRS requiring an employer to withhold taxes from an employee’s wages at a specified minimum rate.

• Agencies must not override, change, or process lock-in letters, adjustments, or releases.
• OSC will only process lock-in letters upon receipt of an original copy from the IRS.  Employees and Agencies should not submit these letters to OSC for processing.
• If an employee has questions, they should contact the IRS using the phone number provided in the IRS lock-in letter.

General Tax Notices

• A copy of all tax notices must be submitted to the Tax and Compliance mailbox.  The agency must conceal the Social Security Number and write the EmplID on the front page of the notice.  The SSN could be displayed in several places throughout the notice, including the upper right hand corner or in the footer.  It varies depending on the IRS office issuing the notice.
• OSC will review the notice and determine if a response is warranted.
• If a response is required, OSC will send one directly to the taxing authority via certified, return receipt mail.  A copy of OSC’s response will also be mailed certified, return receipt to the employee’s address included on the notice.

General Income Tax Refunds

• Often involve New York City or Yonkers tax refund requests.
• NYC taxes are based on the employee’s physical home address.
• Yonkers taxes are based on residency and/or employment location.
• If an employee moves into or out of NYC or Yonkers during the current year, refunds are not issued for the income taxes previously withheld.  The New York State Department of Taxation and Finance will determine if a refund is due when the employee files their personal income tax return.
• OSC cannot issue current year income tax refunds after the final paycheck is confirmed for the calendar year.
• If an employee has not lived in NYC for any time during the current year, but had NYC taxes withheld due to errors associated with their Tax Data and Tax Distribution pages, the employee may be due an income tax refund which OSC has the ability to refund prior to the confirmation of the final paycheck of the year.  Agencies must complete the NYC Refund Template (see Bulletin No. 1845) for each Employee Record (Please do not change the formulas in the template).  Agencies must enter the NYC wages and NYC taxes as reported in the applicable paychecks.  Totals will be calculated at the bottom of the template.
• A corrected Form W-2 is required from OSC for prior year federal, state, or local tax refund requests.  An employee must file an amended prior year tax return to request the refund directly from the taxing authority.

Social Security/Medicare Tax Refunds – General & Nonresident Alien (NRA)

• Prior Year SS/Med tax refunds are issued to employees on a quarterly basis throughout the year.  Non-Workers’ Compensation SS/Med refunds are issued in a separate payroll check with a “TF7” code.  Workers’ Compensation SS/Med refunds are also issued in a separate payroll check with a “TFW” code.  Agencies are notified when refunds are issued via a BBM that will list the affected batch number(s) and the paycheck date(s).
• Before any requests are submitted, NRAs, even if they are a full-time student, must have their Tax Data pages set up with the appropriate fields completed according to whether they plan on taking advantage of available tax treaty or not.
• If they qualify for a FICA exemption, their FICA status in Job must reflect them as being “Exempt” on all rows that fall within the period in which a refund is being requested.  Retroactive correction of multiple rows through a Job request may be necessary.
• Agencies must provide the necessary documentation to support a request for a SS/Med tax refund as follows:
  • The reason for the refund request
  • The refund amount requested
  • The completed SS-Med Refund Template for each Employee Record (Please do not change the formulas in the template).  Agencies must enter the SS/Med (FICA) Wages, Social Security tax, and Medicare tax amounts as reported on the applicable paychecks.  Totals will be calculated at the bottom of the template.
  • A valid I-20 (F-1) or DS-2019 (J-1) that has not expired.  For the I-20 and DS-2019, the agency is required to have petitioned the NRA to work at the agency if the employment is related to Curricular Practical Training (CPT) or Occupational Practical Training (OPT).
  • A copy of the valid, unexpired VISA (This is not the passport).
  • A Registrar’s letter that includes the begin and end dates of the semester(s).
• All required documentation must be submitted with the refund request to the Tax and Compliance mailbox.
• When corrected W-2s are issued, Agencies must complete the Form AC3206 by the due date established in the BBM.

Social Security and/or Medicare Tax Deficiencies

• Social Security/Medicare tax deficiencies can occur for several reasons, including when an employee is entitled to, or receives, some type of fringe benefit (e.g., Education Assistance, CLEFR, Personal use of employer-provided vehicle, Tax Expense) directly or indirectly that the IRS requires to be included in their income and taxed appropriately and when a change to Workers’ Compensation leave results in an increase to an employee’s taxable gross wages.   When these instances occur and there are no available earnings from which to withhold taxes, OSC pays the required Social Security and/or Medicare taxes, in full, on behalf and for the employee as required.  The employee is still responsible for their share of the SS/Med taxes and is required to reimburse OSC. 
• OSC establishes a SS/Med tax deficiency on behalf of the employee to be recovered through the payroll process.  For active employees, the percentage of recovery is 10% of gross.  For inactive employees, the percentage of recovery is 100% of gross.  Agencies are required to notify impacted employees of when deficiencies are established and when they become effective as noted in the general comment that OSC enters into the employee record.
• Agencies are responsible for reviewing all bulletins issued by the Payroll Tax and Compliance group and becoming familiar with those employee benefits and workers’ comp adjustments that must be included in income and their appropriate tax treatment.

Employee Address Changes

• Employee address changes are the responsibility of the Agency and must be entered into PayServ in a timely manner.
• The Mailing Address is where the Form W-2s are mailed to employees.
• The Agency has a responsibility to verify that any address change request is a valid one.  Examples of standard proof of residency is a dated utility bill, lease or mortgage agreement, or property tax bill.
• New York State Department of Taxation and Finance prohibits the Home Address from being a P.O. Box.  A physical address must be entered as it determines taxability.  Mailing addresses, however, can include a P.O. Box.

Tax Advice

• OSC is not permitted to provide tax advice to agencies, employees, or other third parties.
• Please do not advise employees to contact OSC.  Employees should be referred to their tax advisor/consultant.

Employee Tax Withholding

• IRS Publication 505 (Tax Withholding and Estimated Tax) provides guidance on employee federal tax withholding.
• NYS Publication 50 (Employers’ Guide to Unemployment Insurance, Wage Reporting, and Withholding Tax)
• Agencies should process Form W-4s submitted by employees as soon as possible.  The IRS requires processing to be completed within 30 days from the date of submission.  Employees with access to New York State Payroll Online (NYSPO) have the option to adjust their income tax withholding directly.  Please refer to Bulletin No. 1800.1 for additional information.
• Employees claiming exemption from federal tax withholding must submit their Form W-4 by February 15 of each year, unless the date falls on a Saturday, Sunday, or holiday, in which case the due date is the next business day.  Please refer to Bulletin No. 1813 for additional information.  Note:  This bulletin is issued annually.

InterTrac

• Agencies must review and confirm InterTrac information regularly to ensure OSC has the most updated contact and address for agency personnel and payroll office staff.
• Outdated or incorrect information can cause delays (i.e., payroll processing, returned mail, etc.) when timing is crucial.  Please visit the Update Directory Contact Information for further information.

Questions

Questions regarding this bulletin may be directed to the Tax and Compliance mailbox.