1. ADS – Special Pays, Check-EFT Returns
INDIANAPOLIS PAYROLL OFFICE
May 26, 2016
Instructor 1: Kristin Beck
Instructor 2: Todd Cress
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Topics
Special Pays
W2c’s for Special Pays
Check/EFT Returns
Replacement Checks - DD Form 2660
Health Savings Account (H.S.A.)
W2c’s for H.S.A.’s
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SPECIAL PAYS
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Special Pays
Request must be submitted on a Remedy ticket
Employee must have received less than 90% of base pay
Does not include overtime, night differential, etc
Cannot request special pay for lump sum leave
Only one social security number per ticket
Must have reason for special pay
Timecard must be in the DCPS system in order to process a Special Pay
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Special Pays - CSR
CSR must:
Indicate number of hours employee should be paid
Verify employee has record in DCPS
Insure employee is not on T&A invalid report
Verify that employee has sufficient leave
Donated leave has been input with sufficient balance to cover
Time has been input
Employee does not have default address
Employee has correct bank info in DCPS
State reason for the Special Pay
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Special Pays - PRO
Payroll Office will process special pay remedy tickets within 3 business days. Payment received by customer 3-5 days after certification
We will return the ticket if:
Employee is on T&A invalid transaction report 6608R01
Retro T&A not in system
Reason for special pay not indicated
Employee paid more than 90% of base pay
Request for other than base pay
Firefighters are an exception
Debt collection- causing an employee to receive less than 90% of base pay
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7. ADS Voucher for Special Pay
In this example, we processed a special pay for a Fee Basis employee, net amount of $
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PRO Processes “AC” Action to Clear Special Pay Against the Retroactive Payment
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9. Special Pays – Frequent Issues
No Social Security Number at top of Remedy ticket
Detail field is missing/not completed within Remedy ticket
T&A Invalid Report has not been cleared
Employee’s record is not up to date
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Special Pay Template
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Total Special Pays for 2015
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12. Total Dollar Amount for Special Pays - 2015
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W2c for Special Pays
A W2C is required on all special pays that are paid out to an employee during the last pay period of the year, and funds are received before 12/31, but are not set to retro until after 1/1 of the next year.
ADS technician will process the special pay as normal, basing all amounts on the retroactive calculations.
If the Special Pay is the first pay period for this employee, the maximum amount of taxes will be taken out (25% for Federal, 6% for State and Local).
No AC will be put in DCPS. Instead, all retro will be offset
The W2 is corrected to reflect the subject to wages and deductions that were paid in the special pay.
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Questions????
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CHECK/EFT RETURNS
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16. Returned Electronic Funds Transfer (EFT)
Reasons for Returned EFT:
Incorrect Account Information
Account Closed
Account Frozen
Recall/Direct Deposit Intercept
Account Holder Deceased
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Returned Checks
Reasons for Returned Checks:
Invalid Address
Incorrect Payee
Case Terminated/Account Closed
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PRO Procedures
Payroll office receives the M5501/M5801 report from DFAS-CL Disbursing
EFT reissued to the Net Pay account reflected in DCPS
Hardcopy check is reissued if correct EFT information is not available. Check is sent to the address of record in DCPS
Technician deletes the erroneous EFT information
Returned Checks- if the funds were returned due to case termination (such as child support cases), the technician must have verification from the paralegal before reissuing the payment
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19. Check/EFT Return Frequent Issues
Payroll office cannot return funds that have not been returned from the bank (showing in RCB2)
Check/EFT returns have a 10 business day turnaround
If there is no address or EFT information in DCPS, the payment cannot be reissued
New Hires and Separations
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20. REPLACEMENT CHECKS DD FORM 2660
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21. Replacement Checks - DD FORM 2660
DD Form 2660 is “Statement of Claimant Requesting Recertified Check”.
Form is completed for non-receipt of check
Please read the “certification” block carefully
Pull the form from website:
Place cursor on DoD Forms, then choose DD Forms
Click on
Scroll down to DD2660 and click on it
Under “available file format” click on PDF-Ext and form will appear
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Screen Print of Form DD2660
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DD FORM 2660 Processing
Field Activity should fax the completed DD Form 2660 to Imaging ( ), including the Line of Accounting in Block 15 and valid mailing address in Block 5. Block 5 should not be filled in with a direct deposit account. Disbursing Office will not reissue a lost check by EFT. They will only replace a check with a check.
Submit completed DD Form 2660 three (3) business days after the scheduled pay day.
Indianapolis Payroll Office will forward completed DD Form 2660 from Imaging to Disbursing Office for processing.
Disbursing Help Desk – or
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Questions????
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25. Health Savings Account (H.S.A.)
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26. Health Savings Account (H.S.A.) – Defined
An H.S.A. is an account that an employee funds with pretax earnings to cover current and future qualified medical expenses.
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27. Health Savings Account (H.S.A.) – Defined
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28. Health Savings Account (H.S.A.) – Regulations/Guidelines
Volume 8, Chapter 11; IRS Publication 969 (2013)
H.S.A. Account should be established using an H.S.A. trustee
Bank, Insurance company, or anyone already approved by the IRS to be a trustee
Employee must be enrolled in a high deductible health plan (HDHP) and must not be covered under any other health plan
Employee must not be enrolled in Medicare
Employee cannot be claimed as a dependent on someone else’s tax return
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29. Health Savings Account (H.S.A.) – Regulations/Guidelines
An H.S.A. shows as JX on the Pay History
An H.S.A. is funded with pretax money and may be used to cover current and future qualified medical expenses
An H.S.A. allotment will continue until the employee revokes or modifies the allotment election
The 2016 Maximum amount for HDHP
$3,350 for Self
$6,750 for Family
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30. Health Savings Account (H.S.A.) – Rejected H.S.A’s
All returned H.S.A.’s are returned under Pseudo SSN’s
When an H.S.A. payment is rejected from the account, it is returned to the Payroll Office (PRO) in the same manner as a rejected EFT.
PRO
Identifies who the return is for
Determines if the account has been updated in DCPS
If the H.S.A. account number has been updated, the PRO will not touch it in DCPS
If the H.S.A. account number is the same, the PRO will delete the H.S.A. allotment from DCPS to prevent continuous returns/rejects in future pay periods
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31. Health Savings Account (H.S.A.) – Rejected H.S.A’s
Returned H.S.A. funds are considered taxable income and are subject to Taxes, Medicare, and OASDI. DCPS does not allow for the PRO to input an H.S.A. refund (negative JX). The PRO work-around is to enter a positive Regular Earnings (RA) adjustment in the amount of the returned H.S.A. This allows the refund to pay out to the employee as taxable income. DCPS will automatically deduct all associated taxes, Medicare, and OASDI
The PRO then corrects the employee’s year-to-date payroll record by processing a negative JX adjustment to decrease the amount of H.S.A contributions
Processing the RA and negative JX adjustments ensures the employee’s H.S.A. W2 amounts are correct for the tax year
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32. Health Savings Account (H.S.A.) – W2c & Refund
Returned H.S.A. allotments rejected from the bank (or other H.S.A. trustee) in the current year for H.S.A. allotments processed in the prior year require a correction to the employee’s prior year Wage and Tax Statement (W2)
The PRO processes a Corrected Wage and Tax Statement (W2c) to adjust
H.S.A. (JX) (Block 12-W)
Wages Subject to Federal, State, Local Taxes (if applicable) (Blocks 1,16, 18)
Medicare & Wages Subject to Medicare (Blocks 5, 6)
OASDI & Wages Subject to OASDI (Blocks 3, 4)
The PRO reissues the funds via an ADS refund voucher, and decreases the refund by the amount of Medicare and OASDI taxes associated with the refund
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33. Health Savings Account (H.S.A.) – Refund Example
Mary had an H.S.A. return for PPE 12/14/13 in the amount of $1,000.00, but it returned to the PRO on 1/15/14
Since the funds are associated with her 2013 JX, the PRO will process a W2c to decrease her JX deductions and increase her Subject to Taxes along with Subject to Medicare and OASDI, and the Medicare and OASDI deduction amount
The PRO will refund Mary the $1, via an ADS refund voucher, but will deduct $76.50 for Medicare & OASDI
Medicare: $1,000 x 1.45%= $14.50
OASDI: $1000 x 6.2%= $62.00
Total refund will be $923.50
*NOTE: if the employee reached the OASDI maximum for the prior year, the PRO will NOT deduct OASDI from the refund or report it on the W2c.
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34. Health Savings Account (H.S.A.) – W2c & Debt
If the H.S.A. has been set up into a personal account and the employee is not entitled to the H.S.A., there will be no rejected funds. In this situation, the CSR/HR must notify the PRO (via Remedy) so that a W2c can be processed.
Select Remedy Title “W2”
Refer Remedy ticket to the ADS Team
ADS Team processes the W2 and will:
Reduce the H.S.A. (JX) amount
Increase Subject to Federal Tax/State/Local Tax, Subject to Medicare, and Subject to OASDI (if applicable)
Increase associated Medicare and OASDI (if applicable)
Establish a debt for the increased Medicare and OASDI that was added to the W2c since the employee owes this money back
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