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Date: November 21, 2016
Revised May 10, 2018

Bulletin Number: 1529

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Subject General Tax Tips

Purpose To provide Agencies with general guidance on the services and processes of the Bureau of State Payroll Services Tax Audit and Compliance Unit.

Effective Date(s)

Immediately
Agency Actions Agency Inquiries/Requests
  • All tax-related inquiries/requests 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, 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 EmplName, 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.    

Bulletin Board Messages (BBMs)

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

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.

  • This process changed in December 2014 with the implementation of the checkbox in PayServ. Bulletin #1364 was issued, and has since been revised, explaining the revised process.

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, the 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-2s, 1099-MISC, Credit Letters, and 1042-S. After the blackout period ends, the priority is processing the W-2c’s for the year in which the Statute of Limitations is expiring. OSC will begin processing W-2c’s for the current and prior years when the W-2c’s for the expiring year have been completed.
  • In general, from May through early December, Form W-2c’s are printed on the first Monday of the month. From mid-February through April, they are printed weekly.
  • When Form W-2c’s are issued, Agencies are informed via a PayServ BBM that lists the Batch numbers and a general description of why the Form W-2c’s are being issued.
  • Employees should allow two weeks from the time the W-2c’s are issued by OSC to receive the Form W-2c 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 tax refund. OSC recommends that agencies document and track their efforts in providing this form to employees. Agencies must provide this completed form to their employee(s) for their signature. It must be returned, allowing sufficient time to check the AC3206 box 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 wage or withholding amount (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).
    • 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-2c’s are mailed directly to an employee’s current mailing or home address reflected in PayServ.

Reissued Form W-2s Defintion: A reprint of the 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.
  • 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 be issued when all new Form W-2c’s have been printed (depending upon the schedule as noted in the “Corrected W-2/W-2c” section of this bulletin).
  • Will be 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 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 should be submitted to the Tax and Compliance mailbox. The agency must conceal the Social Security Number, and the EmplID should be written 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 office issuing the notice.
  • OSC will review the notice and determine if a response is warranted.
  • If a response is required, OSC will respond directly to the taxing authority via certified, return receipt mail. A copy of OSC’s response is also mailed certified, return receipt to the employee’s address included on the notice.

General Income Tax Refunds

  • General income tax refunds often involve New York City or Yonkers tax refund requests.
  • NYC taxes are based on the employee’s 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 paid. The New York State Department of Taxation and Finance will determine if a refund is due when the employee files their income tax return.
  • OSC cannot issue current year income tax refunds after the final paycheck is confirmed for the calendar year.
  • 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 & Non-Resident Alien (NRA)

  • Prior Year SS/Med tax refunds are issued to employees on a periodic basis throughout the year. Non workers’ compensation SS/Med refunds are issued in a separate check with a “TF7” code. Workers’ Compensation SS/Med refunds are also issued in a separate check with a “TFW” code.Agencies are notified of refunds via a BBM that will list the affected batch number(s) and the paycheck date.
  • 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 if they intend to take advantage of an available tax treaty.
  • 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 documentation for a Tax Refund:
    • 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 SS-Med refund 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 or Occupational Practical Training).
    • 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 the corrected W-2’s are issued, Agencies must complete the Form AC3206 by the due date established in the BBM.

Employee Address Changes

  • Employee address changes are the responsibility of the Agency and must be entered into PayServ in a timely manner.
  • The Home Address determines taxability.
  • The Mailing Address is where 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. 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. Please refer them to their tax advisor/consultant.

Employee Tax Withholding

  • IRS Publication 505 (Tax Withholding and Estimated Tax) provides guidance on employee federal tax withholding.
  • Agencies should process Form W-4’s submitted by employees as soon as possible. The IRS requires a 30-day deadline from the date of submission.
  • 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.

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 see the attached link for further information: http://www.osc.state.ny.us/payroll/directories.htm

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