calendar year 2018 w2 wespac data processing procedures · items to complete before the final...

Calendar Year 2018

W2 WESPaC Data Processing Procedures

Fiscal Coordination

November 2018

WESPaC Doc/HR 2018 W2 NCESD 11/21/2018 Page i 0 i

Table of Contents

Step Pag

e Items to Complete Before the Final Calendar Year Payroll

1. Review Deduction/Benefit Setup Attributes for Codes that Effect Federal, State, and FICA Taxes and W2 Reporting.

1

2. Identify and Process Non-Wage Taxable Fringe Benefits. 3 a. Process Taxable Employer Paid Group-Term Life Insurance over $50,000. 3 b. Verify Section 125 Dependent Care Deduction Code Setup and Identify YTD Totals in

Excess of $5,000. 6

c. Process Non-Wage Taxable Benefits not reported as a separate W2 Item. 9 d. Process Business Expense Reimbursements in Excess of Allowed Government Rate. 11

3. Process Payments for Employer Portion of FICA and Medicare Taxes Due. 17

4. Run W2 Audit to Verify Data, Review Exceptions, and Balance 941s. 21

The WESPaC W2 Process W2.1 Verify Federal Information. 29

a. (Optional) Allow Employees to Print W2s Electronically. 31

W2.2 Create/Modify/Report W2 Workfile. 33 a. Workfile Creation 33

b. Workfile Modification 40 Truncated Addresses 42

Third Party Sick Pay 43 c. Workfile Reports 44

W2.3 Create W2 Print Files. 50

W2.4 Print the W2s. 52 Print Employee W2s. 52 Print Employer W2 Copy. 59

W2.5 Create File for Federal and State. 60

W2.6 Create Individual W2 PDF Files. 64

W2.7 W2 Process Final Checklist. 68

January 2019 Processing Items (to be done before January Payroll) 5. Update Tax Table. 70

6. Update Unemployment Rates. 71

7. Update Workers’ Compensation Rates. 72

8. Run Calendar Close Year (before February dated payroll calculate). 73

Appendix Reporting Employer Paid Insurance Premium Cost 75 WA State Health Care Authority PEBB Insurance Option for Uniform CDHP Plan 76 Deceased Employee – Payroll Tax Processing 77 Reprinting a W2 79

WESPaC HR 2018 W2 NCESD – 11/30/2018 Page ii

WESPaC Doc/HR/2018 W2 NCESD 11/30/2018 Page 1

Items to Complete Before the Final Calendar Year

Payroll

Step 1 – Review Deduction/Benefit Setup Attributes for Codes that

Affect Federal, State, and FICA Taxes and W2 Reporting.

There are three components to deductions and benefit code setups that affect W2 and tax processing. Menu: WEB HR, Payroll, Setup, Codes, Deduction Codes

Deduction/Benefit Group – It is important to select the appropriate group. Tax Type deduction/benefits flagged as Federal, State, FICA, Medicare, and Local automatically report in the appropriate W2 box. This will be displayed in the W2 Information box. They do not need to be selected separately. Other Types automatically check the decrease Federal, State, and FICA flags appropriately. Group types cannot be changed once there is payroll history.

Deduction/Benefit Code Federal Gross, State Gross, and FICA Gross Decrease/Increase

Flags - It is important to check the deduction or benefit code to increase/decrease the appropriate federal, state, and FICA gross wage correctly at the time of initial setup to ensure all future payrolls handle employee taxes correctly. This affects the employee’s Federal Gross, State Gross, and FICA/Medicare Gross and tax calculations during each payroll process.

Deduction/Benefits Code W2 Information field – This selection identifies what W2 box the cumulative year-to-date dollars will report to. This can be added or updated to a deduction/benefit code at any time. The WESPaC W2 Create process reports all year-to-date dollars for the code to the selected W2 Information box regardless of when the W2 Information box was updated. Refer to IRS Instruction for Forms W-2 and W-3 for detailed information regarding W2 information fields.

WESPaC HR 2018 W2 NCESD – 11/30/2018 Page 2

WESPaC Deduction Code W2 information selections are: Box 9 Code: 2 – Advanced Earned Income Credit Box 10 Code: 1 – Employee elected Section 125 plan Dependent Care deductions Box 12 code:

D – 401k, E – 403b, F – 408(k)(6), G – 457, H – 501 (c)(18)(D) L – Substantiated Employee Business Expense Reimbursements P – Excludable Moving Expenses

W – Employee elected Section 125 plan deductions to a Health Savings Account (HSA).

AA – Designated Roth contributions under a 401(k) plan BB – Designate Roth contributions under a 403(b) plan

DD– Employer Sponsored Health Plan Costs (This amount is not taxable). EE – Designated Roth contributions under a 457(b) plan

Box 13 Code: R – Retirement deduction tax deferred. Box 14 Code:

3 – Box 14, Other. (See IRS W-2 Instructions Box 14 list). You may use this box for any other information that you want to give to your employee. NOTE: The 5-digit Ded/ben code displays in the box and your employees may not understand what that code means. Reference Pg. 20 of IRS W-2 Instructions.

Not Reported in any W2 Box: O – Other deductions flagged to decrease Federal Gross that do not fit any other W2

Information box selection. X – Non-Dependent Care Flex section 125 deductions.

WESPaC Benefit Code W2 information selections are: Box 9 Code: 2 – Advanced Earned Income Credit Box 10 Code: 1 – Value of Employer Provided or Employer Paid Dependent Care. Box 12 code: C – Life insurance Over 50,000

D – 401k, E – 403b, F – 408(k) (6), G – 457, H – 501 (c) (18) (D) M – Uncollected Social Security Tax N – Uncollected Medicare Tax R – MSA Contribution W – HSA Contribution AA – Designated Roth contributions under a 401k plan BB – Designate Roth contributions under a 403(b) plan

DD– Employer Sponsored Health Plan Costs EE – Designated Roth contributions under a 457(b) plan

FF -- Qualified small employer health reimbursement arrangement QSEHRA. Box 14 Code:

3 – Box 14, Other. Values you want to give your employees (see IRS W-2 Instructions Box 14).

Not Reported in any W2 Box: 9 – Other Taxable benefits flagged to increase Federal Gross that do not fit any other

W2 Information box selection.


Step 2 – Identify and Process all Non-Wage Benefits Some ‘Non-Wage’ or ‘Fringe Benefit’ items that are non-payroll dollars are taxable for FICA and Medicare and sometimes Federal Withholding. In WESPaC, the taxes for non-wage benefits are generated by entering a positive and negative benefit record in the employee’s Ded/Ben tab and applying it to the primary pay code.

a. Process Taxable Employer Paid Group-term Life Insurance over $50,000 dollars. Unless the sole beneficiary is the district, employer paid or employee section 125 premiums for life insurance over $50,000 are taxable. The taxable amount is based on the employee’s age and amount of coverage above $50,000. (IRS W-2 Inst. pg. 10) & (IRS Pub. 15-B, pg. 13-14).

Calculation Guidelines:

Any after tax amount the employee contributes toward the cost, whether for coverage up to $50,000 or for the excess, can be subtracted from the cost of coverage over $50,000. Age at year end Monthly cost per $1,000 Age at year end Monthly cost per $1,000 Under 25 $.05 50 to 54 .23 25 to 29 .06 55 to 59 .43 30 to 34 .08 60 to 64 .66 35 to 39 .09 65 to 69 1.27 40 to 44 .10 70+ 2.06 45 to 49 .15 Calculation Example: The district pays the entire cost of $80,000 group-term coverage for an Employee, age 40. The cost of the $30,000 (in excess of $50,000) is taxed to the employee. At age 40 this gives him taxable income of $36.00 (.10 x 12 x 30).


Setup Taxable Excess Life Insurance Benefits codes as follows: Menu: WEB HR, Setup, Codes, Benefit Codes

Taxable Excess Life Positive Amount:

Group = Other

Check the box for Cost to Employer, Print on Payroll Check (optional),

Increases Federal Gross, Increases FICA Gross, and Include in UC Wages

Pay Level = 2-Primary or 3-Must Select

W2 Information = C-Life Ins Over 50000

Object Debit, Benefit Overlay Mask are district defined

Amount Type = Amount

Vendor information is blank


Taxable Excess Life Negative Amount:

Group = Other

Check the box for Cost to Employer, and Print on Payroll Check (optional)


W2 Information = None



Vendor information is blank

Add Calculated Taxable Excess Life in the Employee’s Benefit tab and apply to the primary pay record as follows: Menu: WEB HR, Employee, Profile, Benefit Tab


b. Verify Section 125 Dependent Care Deduction Code Setup and Identify if any YTD

totals are in excess of $5,000 (IRS Pub. 15-B pg. 9) Dependent care is processed as an ongoing deduction setup in the employee’s deduction tab and applied to their primary pay record. The deduction code should be setup to defer/decrease the appropriate taxes and report the cumulative amount to the correct W2 information field.

Verify Dependent Care Deduction code(s) decrease Federal and FICA Gross. Code(s) should report to W2 Information 1-Dependent Care. Menu: WEB HR, Setup, Codes, Deduction Codes

Verify Dependent Care Calendar YTD Totals to identify amounts > $5,000.

Run the Payroll Historical Report: Deduction/Benefit History Menu: WEB HR, Payroll, Reports, Historical

Edit an existing report or click Add. Add or verify Report criteria.


Click on Selection Parameters.

Add or Edit an existing template.

Select all Dependent Care deductions used in the calendar year.

Click Save and Select to complete the selection parameters.

Click Save.

Highlight report and click Print.


Check all display boxes.

Select all calendar year dated payrolls.

Click Continue.

Review employee totals to identify those greater than $5,000.


c. Process Non-Wage Taxable Benefits not reported as a separate W2 item:

a. Dependent Care deductions in excess of $5,000. b. Calculated taxable value of employee provided vehicle or district provided cell

phone. (IRS W-2 Inst. pg. 10 Fringe Benefits) c. Employee business expense allowance which does not require employee to

account for receipts-non-accountable plan. (IRS W-2 Inst) d. Calculated taxable value of nonqualified moving expense reimbursements. (IRS

W-2 Inst.). e. Taxable meals paid to employee through accounts payable. (Claim for expenses

when no over-night trip. Should be paid via payroll but sometimes is paid through AP).

Verify setup of Taxable Benefit codes as follows:

Menu: WEB HR, Setup, Codes, Benefit Codes

Taxable Benefit Positive Amount:

Group = Other

Check the box for Cost to Employer, Print on Payroll Check (optional), Increases Federal Gross, Increases FICA Gross, and Include in UC Wages.

Pay Level = 2-Primary Pay or 3-Must Select

W2 Information = 9-Other Taxable Benefits



Vendor information is blank.


Taxable Benefit Negative Amount:

Group = Other

Check the box for Cost to Employer, and Print on Payroll Check (optional).






Add Calculated Taxable Benefit Amount in the Employee’s Benefit tab and apply to the primary pay record. Menu: WEB HR, Employee, Profile, Benefit Tab


d. Process Employer Business Expense Reimbursements in excess of allowed

government rate. Accountable business expense reimbursements that are greater then the allowed government rate are taxable. The allowable rates are available from the IRS Publication 15 and the Office of Financial Management.

There are two ways to process this type of reimbursement:

Payroll Method: The entire business expense reimbursement is processed in payroll using a pay code. A reimbursable deduction code is also processed to account for the allowable (non-taxable) business expense.

AP Method: The employee was reimbursed through accounts payable, or the employee does not need to be reimbursed for out of pocket expenses because the district paid for all of the expenses.

Payroll Method

Setup a pay code to process the Business Expense Reimbursement:

Menu: WEB HR, Payroll, Setup, Codes, Pay Codes

Rate Type = No

Contract = No

Workers’ Comp Code = 615

Retirement Status = Blank


Setup a deduction code to process the amount of Allowable Business Expense:

Menu: WEB HR, Payroll, Setup, Codes, Deduction Codes

Group = Other Before

Check the box Reimbursed.

Decrease Federal and FICA Gross

Pay Level = 3-Must Select

W2 Information = L-Emp Business Exp




Add a pay record for Entire Business Expense Reimbursement payable to employee.

Menu: WEB HR, Employee, Profile, Pay Tab

Frequency = M

Amount = Entire amount to be paid to employee, Factor=1

Exclude Retirement deduction and benefit Exclude Unemployment benefit reimbursement amount < 25% of gross pay. Enter appropriate Pay Start/Stop dates.


Add a deduction to the employee for the Allowable Employee Business Expense Reimbursement portion.

Menu: WEB HR, Employee, Profile, Deduction Tab

Amount = The portion of the reimbursement that is within the government allowed rate (non-taxable).

Enter appropriate Pay Start/Stop dates.

Apply the deduction to the Business Expense Pay record being processed.


Accounts Payable Method

Setup a deduction code to process the amount of Allowable Accounts Payable Business Expense:


Group = Misc



W2 Information = L-Emp Business Exp



Setup a deduction code to process the Taxable Amount of Accounts Payable Business Expense:


Group = Other Before


Check Decreases Federal and FICA Gross






Add the two Deductions to process the Allowable and Taxable Expense Reimbursements:

Menu: WEB HR, Employee, Profile, Deduction Tab

Deduction Code APEB- records the taxable portion of business expense reimbursed through accounts payable. Enter it as a negative amount.

Deduction Code APEB= records allowable (non-taxable) portion of business expense reimbursed through accounts payable. Enter it as a positive amount.

Enter appropriate start and stop dates.

Apply both deductions to the employee’s primary pay record.


Step 3 – Process Payments for Employer Portion of FICA and

Medicare Taxes Due The district may need to pay the employer portion of FICA and Medicare taxes due to an employee receiving taxable third-party sick pay or a former employee responsible for uncollected Social Security tax and uncollected Medicare tax for group-term life insurance coverage over $50,000 dollars. This payment can be made through the following method: Process a benefit record for the employer paid amount to increase the FICA/Medicare warrant. Apply the benefit record to the employee’s primary pay record. If the employee does not have an active pay record for the December payroll, you can add a Benefit only pay record. You will need to calculate the amounts manually based on the percentages rate of the calendar year.

Example of an employee’s benefit record with a FICA and Medicare adjustment:


Setup the FICA and Medicare Adjustment Benefit Codes. Menu: WEB HR, Payroll, Setup, Codes, Benefit Codes

FICA Adjustment Benefit Code:

Group = Tax

Tax Type = FICA



W2 Information = FICA Withholding

Object Debit, Benefit Salary Overlay and Account Number are district defined

Amount Type = Amount.

Vendor Information fields: dependent on district setup for FICA/Medicare payments


Medicare Adjustment Benefit Code:

Group = Tax

Tax Type = Medicare



W2 Information = Medicare Withholding

Object Debit, Benefit Salary Overlay and Account Number are district defined


Vendor Information fields: dependent on district setup for FICA/Medicare payments.


Add the two Benefits to process the Employer Paid Portion of FICA and Medicare.

Menu: WEB HR, Employee, Profile, Benefit Tab

Benefit Code FICAD processes the employer paid portion of FICA Taxes Due.

Benefit Code MEDAD records processes the employer paid portion of Medicare Taxes Due.

Enter appropriate start and stop dates.

Apply both deductions to the employee’s primary pay record. If the employee does not have an active pay record, process a non-rated benefit only pay record for an amount =.0001 and a factor = 1. Apply all mandatory deduction and benefits and the FICAAD/MEDAD benefits.

Sample of a Benefit Only Pay Record:


Step 4 – Run W2 Audit to verify data, review exceptions and balance

941’s

The W2 Audit Report can be run at any time. It will create a workfile of accumulated W2 information from your payroll records. This report can be used to balance your W2 information throughout the year.

Menu: HR, Payroll, Reporting, Historical, W2 Audit

An Audit Process box appears:

Click OK.


If employees are listed in the Employees in Workfile area, and you have run a payroll since the workfile was created, you will need to purge this work file.

Make sure the calendar year 2018 is selected from the drop down list.

Select Regular FICA radio button.

Click Purge (if employees exist/list in this file).

Click the Create option to create a new workfile.

Click the Deds/Bens tab.

Click on the Deds-Bens tab then click Edit.

Note: Box 14 Setup is not needed for this process and is covered in W2 – Step 2.


Click on the Deduction Remove All tab.

Click the Deduction Add option.

Select the option “Add all codes with a ‘W2 Info’ value”.

All selected codes MUST have a valid entry in the 'W2 Info' column. The 'W2 Info' field determines where the ded/ben will be placed on the W2. If you find a ded/ben code that should have an entry in the ‘W2 Info’ column and does not (or vice versa), make the correction in the Deduction Codes table or Benefit Codes table.

Repeat the Remove All and Add option for Benefits.

For more assistance in Deduction or Benefit setup, click on the Help button in the Upper Right.

Once you have the deductions and benefits selected, click OK.


Click on the Pays (Box 11) tab if your district made distributions from a 457(b) plan to the employee. Edit to select Pays as needed. This would be rare.

In order to run this report for all employees, make sure the All radio button is selected for each of the code types listed.

Click OK.

Click on the Retirement tab

On the “W2 Retirement check box should be checked when the employee has:” option: Select – A non-zero retirement deduction OR benefit in YTD history (Profile Retire Y/N flag ignored”)

On the “Retirement Deduction/Benefit codes to process:” option: Select – All Deductions/Benefits currently set up with a Group: Retirement (default).

Uncheck - Create exception message if Profile Retire Y/N flag = No/Yes and employee has non-zero retirement deduction or benefit.


Click Ok.

Click No. This report can be printed at a later time if questions about the parameters arise.

Click OK.


The W2 Audit screen becomes populated with the current work file information.

You can view W2 information for individual employees by highlighting the employee’s name and clicking on View.

Run the W2 Workfile report to verify and balance 941 and W2 totals. This report can be run for all employees, employees with exceptions only, or for totals only.

Click on Report option to run the Audit reports.


Click Report W2 Workfile.

Click Run.

From the Report Format drop down box you can choose:

A - All Employees (recommend to check both exception options)

C - Only Employees with Exceptions (recommend checking both exception options).

T - Only Total Page (recommend to check when balancing to 941,cumulative data)

Depending on your selection parameters, the report will list all employees, employees with exceptions only, or totals only. The example below shows an employee with an exception.


Recommendations for running this report:

After each payroll – run exceptions report to identify any warnings/errors.

After the end of each Quarter – run a totals page to balance cumulatively with 941 reporting data.

Before the final calendar year end payroll – run exceptions report to identify exceptions and make any necessary final payroll adjustments.

After your final calendar year end payroll – run a total page report to balance to all calendar year reported 941s.

Tips for correcting W-2 Exceptions: A: Look at the Pay/Ded/Ben Totals (YTD/FTD) report located in the Historical folder in the Payroll Reporting area. This report will break down the YTD pay and deductions amounts by employee, allowing you to search for a specific dollar amount. B: Look at the Work file creation parameters. A deduction or benefit may be labeled with the incorrect W-2 Info. C: Look at the Deduction and Benefit Code set up in the Payroll Codes area. A deduction or benefit may be set up incorrectly.

Note: Warning “***FICA wages do not equal Medicare wages” is acceptable if the

employee earned more than the defined FICA maximum wage. Otherwise, the employee

data should be reviewed.


The WESPaC W2 Process

The WESPaC W2 process is a series of 7 steps. You must follow the steps in order. Once you complete a step the next step becomes available.

Menu: HR, Payroll, Year-End, W2 Processing

Click on W2 Processing. Click Run.

Step W2.1 – Verify Federal Information for W2s

Note: As you begin the W2 process, make sure you are working in the calendar year 2018.

Click Step 1 - Enter/Verify Federal and State Information for W2s.


Verify the Employer name, address and Federal ID number. (This is the information that will print on your W2 forms. It should be the same as what is printed on your Form 941.)

Washington does not have any state income tax, but if your district processes state income tax to any other state, click Tab 2 and identify the state and your Employer State ID number.

Make any necessary changes and click OK.


Step 1a – (Optional) Allow Employees to Print W2s Electronically

This feature provides employees the option to choose if they want to print their own W2, instead of receiving a printed copy from the employer. Once this option is turned on for a specified date range, the information entered in the Employee Notification section will display automatically for each employee the first time they log into Employee Access. The employee will have access to this information from Employee Access. The employer will be able to view the employee’s response from the Profile YTD tab. W2 Electronic Setup:

You must provide this option for a minimum of 30 days.

You must close the option by December 31 of the W2 reporting year.

IRS specific disclosure requirements must be contained in the notification. These requirements are available in Publication 15-A and the WESPaC notification screen [Info from Pub 15-A] option.

Once you set up your first year electronic option you can clone the information from one year to the next and correct any dates and contact information.

If you have not previously used this feature you must complete all of the options and text fields.

If you have used this feature previously, you can select the prior W2 processing year and then click the Clone Option to copy the information into the new W2 processing year.

Carefully Review all dates, text, and contact information for accuracy.

Click the Employee Preview Notification to view what the employee will see when they log into Employee Access during the specified date range.

Click the Info from Pub 15-A to view and verify you have met disclosure requirements

Save when complete.


Sample W2 Electronic Notification Setup Screen:

Sample Employee Notification Preview:

Save and close out of the web.


Step W2.2 – Create/Modify/Report W2 Workfile This step will enable you to create (or recreate) the workfile that is used to produce the W2s. You are also able to modify the workfile information and create W2 reports from this step. Step 2 is broken into three parts:

a. Workfile Creation starting on this page.

b. Workfile Modification starting on page 40.

c. Workfile Reports starting on page 44.

Click Step 2 Create/Modify/Report W2 Workfile.

a. Workfile Creation

The workfile can be created as many times as needed before printing the W2s. (Note: When you recreate the workfile, any changes made to the current workfile will be lost. Recommendation: Hypersnap changes as you make them so you have the information). When you create the workfile for the first time, the following message is displayed. Click OK to continue.

Note: If you have already created a W2 workfile for the calendar year, the option will read “Recreate W2 Workfile” with last created date and time stamp.


Click the All option for Employee Building, Type, and Check Loc codes.

Check whether to populate W2 Location field with Check Location or Building (Recommend Check Location)

Click the Deds-Bens tab.

Click Edit to set the parameters for Deductions and Benefits.


On the Available Deduction Codes side, click the Remove All option. This clears out what is currently selected.

On the Available Deduction Codes side, click the Add option.

Choose the option to “Add all codes with a ‘W2 info’ Value”.

Repeat the Remove All and Add option on the Available Benefit Code side.

Click the Help option to view W2 guidelines on reportable deduction/benefits as needed.

Click OK when finished with changes.

Note: All Deduction and Benefit codes with W2 info, other than none, must be added to the selected deduction and benefit codes. All selected codes MUST have a valid entry in the 'W2 Info' column. The 'W2 Info' field determines where the ded/ben will be placed on the W2.

Box 14 Setup Option: Box 14 can be used to identify other items on the employee’s W2. The most common deduction in school districts is to report dues. This provides the employee information for completing their Income Tax forms. The Box 14 Setup option provides two features: 1. Can provide a five character description of the code, such as “DUES”. 2. Can combine multiple deductions of the same type to print with one total.


Click the Box 14 Setup option to access the setup screen.

Click the Add Option.

Enter a Box 14 Description.

Click the Deduction Edit option.

Select the deduction code(s) to combine and print with this description.

Select the benefit code(s) to combine and print with this description (if applicable).

Click OK.

Add addition descriptions/codes selections as needed.

*NOTE: Close out of Box 14 Settings when done.


Click on the Retirement tab

On the “W2 Retirement check box should be checked when the employee has:” option: Select – A non-zero retirement deduction OR benefit in YTD history (Profile Retire Y/N flag ignored”)

On the “Retirement Deduction/Benefit codes to process:” option: Select – All Deductions/Benefits currently set up with a Group: Retirement (default).

Uncheck - Create exception message if Profile Retire Y/N flag = No/Yes and employee has non-zero retirement deduction or benefit.

When you have completed the W-2 create paramters, click the OK option to begin the create process.

Click OK to complete the Create W2 Workfile parameters.

Click NO. This report can be printed at a later time if questions about the parameters arise.


When the workfile has been created, click OK.

You will be prompted to run a report to list the fatal exceptions.

Click the “Fatal Exception Only” option.

Click the Print option.


Click OK on the Verify W2 Exception message.

The following report is an example of what will print if you have fatal errors. All fatal errors must be corrected before you can continue to Step W2.3.

If you do not have fatal errors, a report will print with zeros on the total page.

Close


b. Workfile Modifications The Current W2 Workfile is available to modify for the purpose of quickly making changes to W2 data, if time does not permit making these changes through normal payroll processing. If you have exceptions on the exception report they can be addressed through this option.

You would enter directly in your W2 Workfile:

1. W2 Address corrections for “Truncated Address” exceptions. 2. 3rd Party Sick Pay information 3. Statutory Employee Flag

Note: Fiscal Coordination no longer recommends updating the W2 workfile for deceased

employee federal wages (as done in previous years). Please refer to Appendix – Death of

an Employee Payroll Tax Processing.

Note: If a W2 Workfile is recreated it will overwrite any changes that have been made

through this process.

Highlight Modify Current W2 Workfile.

Click Run.

The modify screen displays employee summary information. You may select an employee and view, add, edit or delete records from the workfile.


Edit an Employee in the Workfile

To edit an employee’s W2 record, highlight the employee’s name in the W2 Workfile and

click Edit.

Click OK.

To edit an employee’s name or address, click the Edit button in box E. For all other changes, edit the appropriate field directly and click OK.


Truncated Addresses

If an employee’s address has too many characters than the W2 address field will hold, the address will be truncated on the W2. An exception message will be generated on the exception message report for all employees with a truncated address. In addition, the “Address Truncated” box will be checked on the employee’s record. To correct the truncated address, click on the edit button in box (e). The screen on the following page will appear.

Change the employee’s Delivery Address.

Uncheck the Address Truncated box. Note: Changing the W2 address in the W2 Workfile updates the W2 address in the employee’s profile.


Third Party Sick Pay

Federal legislation requires the reporting of sick pay payments made to employees from an insurance company or other third party payer, as well as any taxes withheld on those payments. These payments must be included on the employee W-2 form, or on a separate form provided by the third party.

If you received notification of any nontaxable 3rd party sick pay amounts from your administrator, you must enter that amount directly into the W2 file.

Enter the amount in Box 12 with a code of J. This is an informational field only and the sick pay amount should not be included in boxes 1, 3, and 5. Do not include nontaxable disability payments made directly by a state.

Check Box 13, 3rd Party Sick, to indicate that you are submitting information about Third Party Sick Payments.

Click OK.

Close.


c. Workfile Reports There are many W2 Workfile reports available. These reports can be used to verify your W2 data or to provide employees with W2 information. Exceptions Only Report

The Exceptions Only Report audits the information created in the W2 workfile and reports potential problems and inconsistent data. It is automatically created during the Create W2 Workfile process.

Highlight “Report W2 Workfile – Exceptions Only” Click Run

Mark the checkboxes to check for exceptions when “FICA wages do not equal Medicare Wages” and for “Medicare Gross does not equal Gross Pay minus before FICA deductions plus FICA Taxable Benefits”.

If your district provides state income tax forms for other states, check “Federal Wage and State Wage differ by more than $1”.

Click Print. Click OK


Totals Only Report The “Totals Only” Report accumulates the amounts in the W2 workfile and prints out a report of the totals. These totals should match the grand total of the 941 reports submitted quarterly.

Highlight “Report W2 Workfile – Totals Only”

Click Run

Click Print

Click OK to the “Verify W2 Totals” message.

Click OK to view the report.

Totals listed in box 2, 3, 4, 5, 6, 7, and 8 must balance to the totals of your four 941

reports combined. DO NOT CONTIUE PROCESSING IF YOU ARE NOT IN BALANCE.


All Employees Report The All Employees Report provides information for each employee in the workfile as it appears on the W2 form. The report should be saved as a record of the employee W2 amounts.

Highlight “Report W2 Workfile – All Employees”

Click Run.

Choose Report Type “Regular FICA”.

Mark the checkboxes to check for exceptions when “FICA wages do not equal Medicare Wages” and for “Medicare Gross does not equal Gross Pay minus before FICA deductions plus FICA Taxable Benefits”.

If your district provides state income tax forms for other states, check “Federal Wage and State Wage differ by more than $1”.

Click Print, ok.

(This is a good report to save once all the exceptions have been cleaned up).


Compare W2 Workfile Against Payroll Year to Date Totals Exception Report The Compare W2 Workfile Against Payroll Year To Date Totals Exception Report compares the totals from the W2 workfile with the year to date totals from payroll.

Highlight “Compare W2 Workfile Against Payroll YTD Totals Exception Report”

Click Run

If a difference is found between the totals an exception record will be created showing the different values.

Employee Authorized Withholding Report This report generates a printout of the following data: employee, social security number, gross wages, taxable gross wages, and the total of authorized withholdings.

Highlight “Employee Authorized Withholding Report”

Click Run

Select your report parameters

Click OK

Click Ok again, to view the report.


Employee W2 Information Statement The Employee W2 Information Statement prints an individual statement for each employee. It provides W2 information and an explanation of how the amounts on the W2 form were calculated. This report can be distributed to employees as a tool to help them understand the calculations on their W2 form. It is recommended that you save this report to your saved reports file.

Highlight “Employee W2 Information Statement”

Click Run

Choose the report sequence you prefer.

Choose the Report Type “Regular FICA”.

Click Print, OK.


W2 Tax Summary Report This option prints a listing of Social Security Number, employee, federal, state, and local taxes (with the state identified) for all employee in the selected states. Employees are grouped by Tax State.

Highlight “W2 Tax Summary Report”

Click Run

(Optional) Enter State Initials to limit number of employees in that state or leave at default.

Click Print


Annual Social Security Report This report prints both FICA and Medicare Wages for each employee. At one time this report was required by the social security Administration. It is no longer required, but is available for information purposes.

Highlight “Annual Social Security Report”

Click Run



Step W2.3 – Create W2 Print Files This step creates the files to print the W2 forms.

Click Step 3 - Create W2 Print Files.

Highlight Create the W2 Print Files

Click Run.

NOTE: Districts that have opted to use the electronic W2 process will receive the following message:

Select “I understand that employees that chose Electronic will not receive a printed W2”

Click on OK

District’s using W2 Electronic process: This print process is only for the W2 that will be printed in step W2.4. After W2’s have been printed, you can return to this step and recreate your print file for all W2s to save a viewable/printable saved report to use as needed.


Choose the print sort order you wish to print. Note: this is the only place you can choose the print order of W2s.

Check to Print W2 Sort Sequence on Pressure Seal W2s. This prints the location code on the left side of the mailing address for easier sorting to building locations.

Click OK.

The file creation log displays.

Click OK.

Click Ok. You will see the following date Stamp screen. Click Close.

Click Close to return to the W2 Step by Step process.


Step W2.4 – Print the W2s This process sends the print jobs for the W2s created in step 3.

Click Step 4 - Print the W2’s.

Highlight Print Employee W2s on the 14” Perforated Universal form (#80650).

Click Run.

Click Yes to view/print the totals page.

The W-2’s Totals Page displays. Save and/or Print this page.


Select: File, exit. To close out of the Totals Report.

Click Yes to the following message.

Click Continue on the following message.

Next, the PDF print file will be created. This may take a few minutes depending on the number of W-2 forms. Below is a sample of the PDF Print File:


Click File, Print .

Select Printer: \\ESD 171-Print-01\ESD 171_W2_1099

Page Sizing & Handling Select: Fit

Click Print

Once you have printed, close out of the PDF print screen.

Click yes to the following message to save a copy of the print file in your saved reports.


Save file to your saved reports, click OK.

Click Close to return to the W2 Step by Step process screen.

IMPORTANT:

Districts printing ALL W2’s (Electronic W2 option is not provided to employees): Select YES to save the print package.

Optionally you may choose to save this into a W2 folder. Save report info box appears.

It automatically saves to HR, Payroll, Year End, Payroll, Calendar, W2 Processing.

Click OK when complete.

Districts using the electronic W2 option Select NO to save the print package. After you have completed step W2.4, printing the W2s, you will recreate a print file for all records to retain in Saved Reports. See next page for this process.


(Required for those districts using the electronic W2 option) bottom of 13.52-13.61.

Step W2.3 created print files only for those employees that chose to receive a paper version of their W2. Therefore, it is necessary to re-create the W2 Print Files along with a pseudo print process in order to save all employee W2’s for future printing requests.

Click on Create W2 Print Files to begin Step 3.

Highlight Create the W2 Print Files.

Click Run.

Select “(optional) Override the system and print all W2’s, regardless of Employee’s choice”

Click OK


Choose the print sort order you wish to print. Note: this is the only place you can choose the print order of W2s.

Check to Print W2 Sort Sequence on Pressure Seal W2s. This prints the location code on the left side of the mailing address for easier sorting to building locations.

Click OK.

The file creation log displays.

Click OK.

Click Print the W2s, step 4.


Highlight Print Employee W2s on the 14” Perforated Universal form (#80650).

Click Run.

Click Yes to continue with the process.

The Print Engine Package Viewer displays the W2 form and list of employees in the file. You

will NOT actually print these W2’s. It is necessary to run this process in order to access the Saved Reports directory.

Click the Close option.

Select YES to save the print package.

Optionally you may choose to save this into a W2 folder. (It automatically saves to HR, Payroll, Year End, Payroll, Calendar, W2 Processing).

Click OK.


Print Employer Copy of W2s

Click Print Employer W2s and click Run, yes, then options/print. This prints on 8.5 x 11 blank paper and can be printed locally or the ESD_Data Center printer.

Do not select the ESD 171-Print-01\ESD 171_W2_1099.

Click NO To Save.


Step W2.5 – Create the W2 Electronic File for Federal and State

You must have a Personal Identification Number (PIN) and password from the Social Security Administration in order to transmit the W2 file. You can register for your PIN and password, or make changes to your existing PIN and password by going on-line. (http://www.ssa.gov/bso/bsowelcome.htm)

Submit your 2018 files no later than January 31, 2019. This step creates the file that you will transmit through social security administration website.

Click Step 5 - Create the W2 Electronic File for Federal and State.

Highlight Enter and/or Verify Setup Information for W2 Electronic File Submission.

Click Run.


Click on Tab 1 – Enter and/or Verify Contact Information.

Verify the information and make modifications as needed.

Click on tab 2 – Enter and/or Verify Company Information.

Verify the information and make modifications as needed.

Click on tab 3 – Enter and/or Verify Submitter Information.

Verify the information and make modifications as needed. (Note: The Submitter’s

Authorized PIN from the SSA is required on this tab (IT NEEDS TO BE CURRENT AND

ACCURATE).

Click OK when finished.


To create the file for submission, highlight Create W2 Electronic Submission File(s).

Click Run.

.

Check the Employer Third Party Sick Pay box if you are reporting Third Party Sick Pay (Taxable or non-taxable (you have any Box 12 – J items).

Enter the amount of Third Party withholding paid by your district.

Select your district Export\Fin Sec folder.

For State Disk Type, choose C-Create One File.

Click OK.

The following report will print. Verify the totals listed and save the report to your saved files.


Click Close.

The View Electronic File Date/Time Stamps screen will display next. Make a note of the file names and location. Make sure it is saved to your Fin_Sec Folder. Make sure the number of files created is 1.

Click Close.

Click Close again, to return to the W2 step by step process.


Step W2.6 – Create Individual W2 PDF Files. This step will allow you to create a W2 PDF file for each employee. The PDF files can be viewed and/or printed from the Employee Profile YTD tab and from the View W2 button in Employee Access.

Click on Step 6 – Create Individual W2 PDF Files.

Click Run.

This option allows you to create individual W2 PDF files for each employee. This process may take several minutes. After they are created, the PDF Files can be viewed/printed from the View W2 screen in Employee Profile and from the View W2 button in Employee Access (once you have made it accessible in step 7).

Highlight Create Individual W2 PDF Files.

Click Run. (will take some time)

Click OK to the following message:

Click Close to return to the W2 Step by Step process.


HR Employee Profile Access to W2 PDF File: (Allows viewing & printing of Employee W-2s) Web, HR, Employee, Employee Profile:

Click on the Name Tab.

Highlight and copy the SS# field listed in the employee Name screen

Click on the W2 Tab.

Highlight the W2 year.

Click the View W2 option.

Paste or enter the employee’s SS#.

Click Print.


Click the View PDF option on the View W2 screen.

Click OK.

Click the download to open the PDF and view the employee’s W2.

Click File,Exit.

Click the Back button to go back to the employee’s W2 tab in employee profile.


Employee Access View W2 PDF File:

Note: The W2 information Statement and W2 PDF file will not available in employee

access until you complete the options in Step 7 to make them available.

Web Employee Access, Employee Information, Payroll, W2 Information

Click View W2. Enter SS#.

Click Print

Click the download to open the PDF printable file.

The employee can select the “How is my W2 calculated” button, intended to explain how the amounts on your W2 form are calculated.


Step W2.7 – W2 Process Final Checklist This step will provide you with a checklist of reminders as well as the following options: This step needs to be run to make printing/viewing available. 1. Allow View/Print of the W2 Information Statement from Employee Access. 2. Allow Printing of the W2 pdf File from Employee Access. 3. Lock the 2018W2/1099 work files (should not be done until W2/1099 files have been

transmitted to SSA/IRS). 4. Report/Email employee that registered to receive their W2s electronically.

Click Step 7 – W2 process Final Checklist.

Click Run.


The W2 Process Final Checklist screen Displays:

Click the Employee Access/Lock options Edit Option.

Click to Allow View of the Employee W2 Information Statement from Employee Access.

Click to Allow Printing of the W2 from Employee Access.

Click to lock the W2/1099R workfiles (only after the Electronic files have been

transmitted to SSA and IRS).

Click the Email Options Run option.

Click Report Only, to obtain a list of employees who have opted to receive electronic W2s.

Complete Email Subject Line.

Complete Email Body.

Click the Report and Send Emails option when you are ready to provide this notification to your employees.

The WESPaC W2 process is complete.


January/February 2018 Processing Items

Step 5 - Update Tax Tables (Before first 2018 dated payroll calculate) The following process will update your Federal, FICA/Medicare, and EIC tax tables for the new calendar year. The new rates are automatically loaded into the tables when you run the update. The tax tables must be updated before you process your first 2018 dated payroll calculation.

Run this process after January 1, 2018,

Menu: HR, Payroll, Year End

Highlight Update Tax Tables and click Run:

Click the drop-down arrow and select yes, to change the current tax calculation year to 2018.

Click OK.

Click Yes.

2019 Maximum Wage Employee Rate Employer Rates FICA Max = $132,900 6.2% 6.2% Medicare Max = 9,999,999.99 1.45% 1.45%


Step 6 – Update Unemployment Rates (Before first 2019 dated payroll

calculate) Menu: HR, Payroll, Utilities/ Payroll Tables/Unemployment Compensation Wage - UC

Highlight Unemployment Compensation Wage. Click Run.

Click Add to enter the New Year information.

Enter Tax Year 2019

State = WA00

Enter the Maximum Wage for the year= $49,800

*Enter the individual Rate for your district.

Check Active before January dated payroll is ran.

Click OK.

Note: Cooperative districts should add the 2019 Tax Year minimum wage amount

as $49,800, using the current rate for your district effective September 2018. Non-

cooperative districts should add the 2019 Tax Year minimum wages amount as

$49,800, using the rate provided by Employment Security Department effective

January 1, 2019.


Step 7 – Update Workers’ Compensation Rates (before first 2019

dated payroll calculate) Menu: HR, Payroll, Utilities

Highlight Worker’s Compensation Rate Table. Click Run.

Click Add to enter the rates for the New Year.

Enter WC code 613.

Enter the effective date of 01/01/2019

Enter the Accident Fund rate currently applicable to your district. (See Screenshot)

Enter the Employee Pension rate= .0516

Enter the Employer Pension rate= .0516

Click OK.

Repeat this process for the 614 WC code.

Add WC 615 without any rates. Click Save.

01/01/19 Effective Workers Compensation Rates: Supplemental Pension and Asbestos Fund assessment rates change January 1, 2018. Note: Accident Fund Employer rates for 613 and 614 remain the same. Rates are assessed per district and became effective September 1, 2018.


Step 8 – Run Calendar Close Year (Before February 2019 dated

payroll calculate) The Calendar Close Year process must be completed before running a calculate for a February

dated payroll and can be done any time AFTER completing January payroll. Menu: HR, Payroll, Year End

Highlight Close Calendar Year and click Run.

Verify the current calendar year is 2018 and the next calendar year is 2019.

Verify that Calendar Year Closed is No.

Use the drop down arrow to answer “Yes” to “Would you like to close the current calendar year?”

Check the box to “Capture Calendar Year Benefits/TSA Deductions”. (This will update a user defined screen in the employee profile with gross pay, and tax deferred benefit and deduction information for the calendar year.)

Enter a record date of 12/31/2018.

Click OK.

Verify that current calendar year in the screenshot above, is 2018.

Click Yes.


Click OK.

Click Yes.

Click OK.

The Calendar Year Benefits that were created can now be viewed in the employees’ profiles. Menu: HR, Profile

Select an employee to view.

Click the drop down arrow for the user defined screens.

Select Calendar Year Benefits.

Click the icon to the right of the drop down arrow to see the information.


Appendix Reporting Employer Sponsored Group Health Plan Costs

W-2 Information field code DD=Employer Sponsored Group Health Plan cost added to

both Deduction and Benefit Code files. The following exert is provided from the IRS Affordable Care Act Tax Provision:

Employer-Provided Health Coverage — Not Taxable; Reporting is Voluntary for

All Employers for 2011 and Small Employers for 2013

Starting in tax year 2011, the Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan. To give employers more time to update their payroll systems, Notice 2010-69, issued last fall, made this requirement optional for all employers in 2011. IRS Notice 2011-28 provided further relief for smaller employers filing fewer than 250 W-2 forms by making the reporting requirement optional for them at least for 2013 and continuing this optional treatment for smaller employers until further guidance is issued. Notice 2011-28 also includes information on how to report, what coverage to include and how to determine the cost of the coverage.

The 2011 Form W-2 is available for viewing on IRS.gov. This is the W-2 that most employees will receive in early 2013. The form includes the codes that employers may

use to report the cost of coverage under an employer-sponsored group health plan.

This reporting is for informational purposes only, to show employees the value of their health care benefits so they can be more informed consumers. The amount reported

does not affect tax liability, as the value of the employer contribution to health coverage continues to be excludible from an employee's income, and it is not taxable.

For more information, see the 2011 Form W-2, IR-2011-31, Notice 2010-69, Notice 2011-28, frequently asked questions and our multimedia products —an IRS YouTube

video and a webinar, Reporting of Employer Healthcare Coverage on Form W-2.

http://www.irs.gov/pub/irs-pdf/fw2.pdf

http://www.irs.gov/newsroom/article/0,,id=237870,00.html

http://www.irs.gov/pub/irs-drop/n-2010-69.pdf



http://www.irs.gov/newsroom/article/0,,id=237894,00.html

http://www.irs.gov/app/scripts/exit.jsp?dest=http%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DTFepqFnEj5I%26feature%3Dyoutu.be

http://www.irs.gov/app/scripts/exit.jsp?dest=http%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DTFepqFnEj5I%26feature%3Dyoutu.be

http://www.irs.gov/app/scripts/exit.jsp?dest=http%3A%2F%2Fwww.irsvideos.gov%2FReportingEmployerHealthcareCoverage


Appendix

WA State Health Care Authority PEBB Insurance Option for Uniform CDHP Plan

Beginning January 2013 the HCA PEBB insurance plan choices offer a Uniform CDHP plan that contains a provision for a supplemental Health Savings Account (HSA). This option designates a portion of the employer paid benefit to be allocated to the employee’s HSA. In addition, the employee may choose to contribute an additional amount into their HSA. All employee and employer contributions into an HSA plan must be reported on the W-2 in box 12 with a code W-HSA Contribution.

This HSA option requires additional deduction/benefit code setup within the WESPaC

system. This update must be completed prior to the first payroll processing this CDHP

insurance.

The following sample shows the breakdown of new deduction and benefit code setup and a sample employee deduction/benefit entry. Sample Deduction

Code Type W-2 Information CHP CDHP after tax medical deduction Misc DD-Health Plan CHP-5 CDHP before tax medical deduction Oth Before DD-Health Plan CHPH CDHP after tax HSA additional deduction Misc W-HSA CHPH5 CHDP before tax HSA additional deduction Oth Before W-HSA Sample Benefit

Code Type W-2 Information CHP CDHP medical benefit Other DD-Health Plan CHPH CDHP HSA benefit Other W-HSA Sample Employee Deduction and Benefit Records:


Appendix Deceased Employee – Payroll Tax Processing

When wages are processed through payroll after the time of death, careful consideration must be used to determine if final wages paid after death to adhere to IRS Guidelines. Refer to IRS guidelines when you are processing this final payment. There are special tax guidelines for the following:

1. Employee’s death and final pay after death are both in the same calendar year. 2. Employee’s death and final payroll after death are in different calendar years. 3. Final after death payroll includes sick leave cashout.

WESPaC process guidelines to meet these requirements are located in the WESPaC Terminating Employee – Appendix A: Death of an Employee. WESPaC always includes paid wages in the calculation of Federal Gross even if the 1FIT deductions were not applied to the payment. This is not so with FICA/Medicare Wages. If FICA/Medicare deduction/benefits are not applied to the pay record, the payment is not calculated in FICA/Medicare Wage.

IMPORTANT: You must notify Fiscal Coordination when this happens in your district.

After your final payroll, fiscal coordination will process a Manual payroll to adjust the

applicable Federal Gross wages not applicable to the employee’s W2.

To validate this data you must review the following:

Review the final check in detail to verify it was processed correctly.

Verify the amount of Federal Gross Wages processed in the final payroll after the time of death.

You may view this on the deceased employee’s Profile, Check History tab:

Also verify in the Check History tab the “M” manual check displays showing the federal Gross as a negative amount (processed by Fiscal Coordination).


Note: This will cause a W2 Warning since W2 Fed Gross wages do not equal historical Federal Gross wages. This is ok as long as the final payroll and the manual check are completed correctly.

The Amount of Federal Gross Wages reduces in the manual check must also be processed through the Accounts Payable 1099Misc process to the deceased employee beneficiary or Estate Of.


Appendix Reprinting a W2

You have two options to reprint a WESPaC W2.

1 - Locally print the PDF file copy created in step W2.6 (prints 8.5 x 11 plain paper). 2 - Reprint the original W2 (pressured sealed form to the ESD Data Center printer).

1 – Print PDF FILE

Menu: HR, Profile, YTD Tab

Select the Employee’s applicable Calendar year. Click the W2 option.

Click View PDF. Print the displayed PDF file to your local printer.

2 – Reprint original W2 on pressure sealed form. The saved print file (saved from the print Employee W2) is accessible in saved reports. Only users who have access to the Payroll, Year End, and/or W2 Process can access this file. Menu: HR, Saved Reports


Open folders to access the W2 Process files (optionally may be available from the users W2 folder.

Select the W2- EMPS-PRES-UNI file, then click view.

Use the Lookup key or scroll to select the employee who needs a reprinted W2.

Identify the page number of this W2 at the bottom of the screen.

Click File, and select Print

Use the drop down arrow to select the ESD 171-Print-01\ESD 171_W2_1099.

Click the properties button

Select the: Paper/Quality Tab

Change the Page Size to: Legal

Click Ok to go back to the Print Screen.


Enter the employee’s W2 page in the Print Page Range fields. Click Ok.

Page Scaling: None

Click OK to print.

Close the saved report.

calendar year 2018 w2 wespac data processing procedures · items to complete before the final...

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