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Date: November 21, 2016

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 employee mailboxes. Sending your requests to the Tax and Compliance mailbox allows multiple staff to review and respond to your issue.
  • Requests must originate from the agency payroll office, not individual NYS employees. 
  • In the email subject line, list the type of request (e.g., Reissued W-2, W-2c/Corrected W-2, SS/Med Refund Request (Year), or NYC/Yonkers Income Tax refund request, etc.), EmplID, and the EmplName.  If the inquiry is in response to a bulletin, please follow the instructions outlined in the bulletin.
  • All emails must contain the Employee ID # and 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 year, an explanation of the request, and any supporting documentation and calculations.  Agencies are reminded that they should follow up with OSC inquiries for additional information related to their initial requests in a reasonable time period.  OSC’s targeted response time for all inquiries/requests is 48 hours.  However, due to year end processing and competing work priorities, this response time is not guaranteed.

Bulletin Board Messages (BBMs)

  • OSC urges Agencies to create and maintain a tracking document of all announcements.  The messages contain actions, important dates and batch numbers that could aid in answering a variety of payroll related questions from employees.

Corrected W-2 (W-2c)  

  • A correction to previously reported data on an employee’s Wage and Tax Statement (W-2).
  • When requesting a W-2c, the Agency must provide a valid reason and any corresponding backup documentation.  This information should be provided as a scanned attachment (pdf) when requesting a W-2c. 
  • The IRS does not require a corrected W-2 for an address change. 
  • In general, from May through December, W-2cs are printed monthly, unless there is a large number or special project.  From mid-February through April, W-2cs are printed weekly.  Employees must allow two weeks from the time the job goes to print for receipt of the W-2c in the mail.
  • There is a blackout period for W-2c processing from mid-December to mid-February due to year end processing of 1099-Rs (Retirement statements), W-2s, 1099s, Credit Letters, and 1042-S forms.  This period is subject to fluctuation.
  • When W-2cs are issued, Agencies are informed via a PayServ Bulletin Board Message (BBM) that lists the Batch numbers and a general description of why the W-2cs are being issued.  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 http://www.osc.state.ny.us/payroll/forms.htm) for every employee who is due a Social Security/Medicare tax refund.  Agencies must provide this completed form to their employee(s) for their signature and return allowing sufficient time to check the AC3206 box in PayServ by the established due date listed in the original bulletin board message.  OSC recommends that agencies document and track their efforts in providing this form to employees.  If an Agency does not see an NTAX722 report for their agency, then there were no corrected W-2s containing changes to the dollar amounts reported for their employees.
  • Prior Year SS/Med tax refunds are issued to employees only upon receipt from the IRS, and after an appropriate reconciliation by our Office.  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).
  • Agencies can refer to the corrected W-2 in PayServ to identify the batch number that it was issued under.  Determination if the refund has been issued to the employee can be made by reviewing BBMs and the Employee’s Paycheck data history in PayServ.
  • There are two reasons why an agency may not be able to locate an employee on the NTAX722 report:   
    • The NTAX722 report only lists employees who had a change to a previously reported wage or withholding amount (i.e., if a corrected 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 W-2 may be listed under that agency.
  • Agencies should retain copies of the NTAX722 reports, noting the batch number for all of their employees due a refund.
  • W-2cs are mailed directly to an employee’s current mailing or home address reflected in PayServ.

Reissued W-2s

  • A reprint of the originally issued W-2. 
  • Agencies can reprint W-2s dating back to 2011 from PayServ.  Enter “W-2 Reprint” in the Search box and the path will appear.  Save it as a favorite for easy reference in the future.
  • Reissued W-2s, created and issued by OSC, are mailed directly to the requesting agency for distribution to the employee.

Reissued W-2cs

  • A copy of the latest W-2c issued.
  • Will be mailed by OSC to the employee at their current address in PayServ.

Lock-in Letters

  • 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.
  • Employees and Agencies should not submit these letters to OSC for processing.  OSC will process these letters upon receipt of an original copy from the IRS.
  • If an employee has questions, they should be referred to the IRS using the phone number provided in the IRS letter.

General Tax Notices

  • A copy of the notice should be submitted to the Tax and Compliance mailbox.  The Social Security Number should be concealed, and if available, the EmplID should be written on the front page.
  • OSC will review the notice and determine if a response is warranted.
  • Responses are mailed directly to the taxing authority via certified, return receipt mail.  A copy of the response is also mailed certified, return receipt to the employee’s address included on the notice.

General Income Tax Refunds

  • Typically involve New York City or Yonkers tax refund requests.
  • NYC taxes are based on the employee’s home address.  If an employee moves into or out of NYC during the current year, we do not issue refunds for the income taxes paid.  Any refund that may be due to the employee will be received when they file their part-year tax return.
  • Yonkers taxes are based on residency and/or employment location.
  • Prior year tax refund requests will require a corrected W-2 to be issued.  Employees can only obtain a refund if they decide to file amended tax returns.

Social Security/Medicare Tax Refunds - General & Non-Resident Alien (NRA)

  • Before any requests are submitted, NRAs 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, then 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.
  • All required documentation must be submitted with the refund request directed to the Tax and Compliance mailbox.  This documentation includes the reason behind the refund request, the amount being requested, details supporting how the refund amount was calculated (please complete the attached SS/Med refund template SS-Med Refund Template for each Employee Record), a valid I-20 (F-1) or DS-2019 (J-1) that hasn’t expired (for the I-20 and DS-2019, the agency is required to have petitioned the NRA to work there 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) and a Registrar’s letter (with the begin and end dates of the semesters). 

NOTE:  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.

  • Agencies must complete the Form AC3206 process by the due date established in the BBM at the time the corrected W-2s are issued.
  • Even if an NRA is also a full-time student, the agency is still required to set up that employee’s tax data page. 
  • Prior Year SS/Med tax refunds are issued to employees only upon receipt from the IRS, and after an appropriate reconciliation by our Office.  These refunds will be issued in a separate check with a “TF7” code.  Agencies are notified of refunds via a BBM that will list the affected batch number(s).
  • Agencies can refer to the corrected W-2 in PayServ to identify the batch number that it was issued under.  Determination if the refund has been issued to the employee can be made by reviewing BBMs and the Employee’s Paycheck data history in PayServ.

Employee Address Changes

  • Changes are the responsibility of the Agency and must be entered into PayServ in a timely manner.
  • The Home Address determines taxability, while the Mailing Address is where the W-2s are mailed to employees.  The Agency has a responsibility to verify that any address change request is a valid one.
  • 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 any W-4 forms submitted by employees as soon as possible.  There is a 30-day deadline from the date of submission.
  • Employees claiming exemption from federal tax withholding must submit their W-4 form 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(s) and addresses for the appropriate agency personnel or payroll officer.  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.