|Date: July 1, 2003||Bulletin No. 416|
|Subject||Prior Year Tax Refunds Resulting from Workers’ Compensation Board Awards|
|Purpose||To describe changes in the processing of prior year Social Security and Medicare wage adjustments resulting from Workers’ Compensation Board awards.|
|Affected Employees||Employees in the Company NYS who have a Workers’ Compensation Board Award for a prior tax year and the Award is Credited to NYS.|
When the Workers’ Compensation Board issues an award of compensation for a prior year disability period, and any portion of the award is “credited to NYS”, the State Insurance Fund sends a C8/EMP Info form to OSC. This form identifies the period of disability and the amount of the Award “credited to NYS” as reimbursement for wages previously paid on the State payroll.
The amount of the Award is exempt from taxes, including Social Security and Medicare withholdings. Since the employee originally had taxes withheld when previously paid on the State payroll, OSC must adjust the Social Security and Medicare wages for the applicable tax year(s). A refund of the Social Security and Medicare taxes must also be processed based on the adjusted wages. OSC reports both wage and tax adjustments to the Federal government as a W2C correction.The Statute of Limitations for reporting these adjustments is 3 years, 3 months, and 15 days following the last day of the calendar year in which the disability period occurred.
|Path||Compensate Employees>Maintain Payroll Process (US)>Inquire>Workers’ Comp Refund|
|System Processing Changes||
The upgraded payroll system provides a new method for processing prior year wage adjustments and refunds beginning with the tax year 2001.
Note: OSC will continue to use the voucher method when processing refunds for tax year 2000 and previous years. Also, the method currently used for processing current year wage adjustments and refunds via the Time Entry panel will also remain the same.The new method for processing prior year refunds beginning with tax year 2001 is as follows:
The agency can view the Workers’ Comp Refund page to obtain information regarding prior year Social Security and Medicare wage adjustments. The information on this page will assist the agency with keeping accurate records and in answering employee questions.The fields on this page include:
Questions that relate to changes in the processing of tax refunds related to Workers’ Compensation board awards resulting from the Payroll System (PayServ) upgrade may be direted to the Payroll Audit mailbox.Prior to August 4, questions will be answered within two business days. After August 4, questions will be answered within 24 hours.