Section 3: Amounts





Recommendations Prior to Loading W2 Amounts


  • Run the following reports, which can all be accessed in the Payroll W2 Processing and Payroll modules, under Reports -> Payroll Tax Reports, as well as in the Payroll module's task list, under Final Validation Reports on the Finish tab (3.0)/Conclude tab (4.0):


  • Check for Unupdated Deduction Pay Masters:
  • OpenRDA: Payroll → Query → By Pay Identification → Job Deduction Pay Masters (PAYJDPM)


  • Range on Calendar Year and also turn off Select when Updated True on the Select tab. The report will select verified Deduction Pay Masters for the Calendar Year that have not been updated. If no records are selected, then all Payrolls have been updated. If records are selected, that the Update Payroll History step has not been completed for the Pay ID listed. Determine if this was a completed payroll in which checks/direct deposits were issued (not a payroll used for testing or correcting amounts). If the payroll was completed, return to the Pay Master to review which steps were not completed, and run those steps including the Update Payroll History process.



  • Federal/State Earnings Comparison:


  • OpenRDA: Payroll → Reports → Payroll Tax Reports


  • With very few exceptions, Federal and State Earnings should be the same. If any employees appear with a difference, determine if the difference is correct or not. If it is not correct, adjustments would need to be made prior to loading W2 amounts.



  • FICA/Medicare Earnings Comparison:


  • OpenRDA: Payroll → Reports → Payroll Tax Reports


  • Unless employees are FICA or Medicare exempt, or employees have reached the FICA wage limit, FICA and Medicare Earnings should be the same. If any employees appear with a difference, determine if the difference is correct or not. If it is not correct, adjustments would need to be made prior to loading W2 amounts.



  • FICA Earnings Calculation:


  • OpenRDA: Payroll → Reports → Payroll Tax Reports


  • This report uses the Rates and Gross Threshold for the Calendar Year entered on the Range Screen. NOTE: This report will only be accurate if the employee and employer FICA percentages are the same for the entire calendar year. If any employees appear with a difference greater than $0.12, the difference is most likely not correct, and asteriks will appear in the far right column to flag those employees. For employees with a difference, adjustments would need to be made prior to loading W2 amounts.


  • Deduction Pay Masters vs Calendar Comparison:


  • Xpert: Reports → Payroll Tax Reports → Deduction Pay Masters/Calendar Comparison → Add Calendar Year then select


  • This report compares updated Deduction Pay Masters to Deduction Calendar Summaries. Select Tax Deductions Only box to only include comparison on Tax Deductions.  These normally would be the same. When they are not the same, the report will list the employees, along with the gross and amount. If the Change Deduction Earnings/Amounts process (which updates the Deduction Calendar files, which are the files that populate Forms W-2 and 941) was used, then the Adjusted and Adjusted Date will be indicated on the report. NOTE: If differences are shown that are not the result of the Change Deduction Earnings/Amounts process having been run, please submit a Helpdesk Ticket for guidance.


  • Election Workers


  • Recommendation is to withhold FICA and Medicare for the entire year, and at year end, verify if any election workers have earned a gross over the threshold for the reporting year (See IRS.gov for threshold), which would require all wages to be subject to FICA and Medicare.


  • Refund Deductions process can be used to refund withheld FICA and Medicare to the election worker if they have earned a gross less than the threshold. OpenRDA's Board-Paid Only Benefits process can be used to adjust the matching FICA and Medicare amounts. These are optional Payroll bundles for OpenRDA 101 (the Refund Deductions bundle is located under Maintenance and the Board Paid Benefits Only process is on the task bar (Start Tab)).


  • A W2 must be filed for election workers who receive payments of $600 or more, even if no FICA, Medicare or income tax is withheld. Furthermore, a W2 must be filed for election workers who are paid less than $600 when such payment is subject to FICA/Medicare under the entity's Section 218 Agreement. There are additional considerations when the election worker is also employed by the entity in a different capacity.


  • If any questions concerning election workers, the entity should contact the State Social Security Administration concerning whether it has a Section 218 Agreement; and if it excludes election worker services along with the amount specified in the agreement.


Please contact RDA support if assistance is needed in making adjustments to taxable wages and/or deductions.


Step 1: Load W2 Amounts


Procedure


  1. Go to HR → Payroll W2 Processing → Load tab → Load Amounts from Deduction Calendar Masters 
  2. Set Tax Year – should default to current calendar year; if not, download current programs or run Payroll program updates; correct before continuing.
  3. Use Which Period – select Calendar Year; if using the W2 program; for State Unemployment reporting, choose the appropriate quarter.
  4. Range – not necessary if loading all personnel.
  5. Click Run Report.


  • NOTE: If an employee has an invalid deduction, the Load W2 Amounts process will create two W2 Masters for that employee. One W2 Master will have a blank Employer ID, which is incorrect. The other W2 Master is assigned an Employer ID, which is correct. Delete the W2 Master with the blank Employer ID.


Comments


  • Reloading W2 Masters:
    • Run Load W2 Amounts process as many times as necessary.
    • After loading W2s, look for errors; if you find errors, make corrections to the Employee Master, and run the Load W2 process again; this will OVERWRITE the incorrect W2 Masters.
    • If you find that a W2 Master was created for an employee, but should not have been, or for the wrong EIN, purge the W2 Master; running the Load W2 process again will NOT remove the erroneous master; see Appendix F for purge instructions.


Step 2: View W2 Masters


Procedure


  1. Go to HR → Payroll W2 Processing → Load tab → View Masters (in Xpert, go to Payroll → EFW2/W2 Submenu → View EFW2 Master)
  2. Highlight the appropriate W2 Master.
  3. Click Select.
  4. Make corrections if necessary.
  5. Click Save if changes were made.
  6. Click Cancel.


Notes on Third Party Sick Pay


  • Non-Taxable Third-Party Sick Pay:
    • Box 12-J (Third-Party Sick Payments) – This applies if an employee that contributed to the sick pay plan received third-party sick pay payments that were paid by a third-party insurer and are NOT shown in W-2 boxes 1, 3 or 5.
    • The employee is assigned a deduction with the appropriate W2 Type (SICK PAY), which causes the appropriate amount to load in Box 12-J and print on the W-2.
    • If an amount is in Box 12-J, then Box 13 (3rd Party Sick Pay check box) will automatically display an X.
    • See below for F/W 3rd Party field
    • See separate document in OpenRDA Answers for more information: Third Party Sick Pay
  • Taxable Third-Party Sick Pay:
    • Box 12-J (Third-Party Sick Payments) does NOT apply if an employee that contributed to the sick pay plan received third-party sick payments that were paid by a third-party insurer and ARE INCLUDED in W-2 Boxes 1, 3 and 5.
    • See below for F/W 3rd Party field
    • If an amount is in the F/W field, an X will automatically display in Box 13 (Third-Party Sick Pay check box).
    • Box 12-J does NOT apply.
    • See separate document in OpenRDA Answers for more information: Third Party Sick Pay
  • F/W 3rd Party Sick Pay
    • This field is used to check Box 13 Third-Party Sick Pay, by adding a dollar amount of the Federal taxes withheld from the employee for the sick pay
    • This box on the W-2 is checked based on the sick pay agreement whether the disability payments are made by the employer under a self-insured plan or if the third-party insurer makes payments
    • The Third-Party Sick Pay box is not checked if the employer pays under self-insured plan, but should be checked if the Third-Party insurer makes the payments
    • Please refer to irs.gov and Publication 15-A for more information
    • If Box 13 Third-Party Sick should be checked, access the appropriate MMREF W2 Employee Masters after loading W-2 amounts, and enter the amount of all FEDERAL taxes withheld (Federal, FICA, and Medicare) in the F/W Third-Party field.


Comments


  • Use the W2 Master to:
    • Review W-2 information.
    • Make corrections to W-2 amounts.
    • Enter an amount in the F/W 3rd Party field, if applicable.
  • Reloading W2 Amounts will overwrite existing masters; changes made to a master would be lost.
  • If using the RDA W2 Print Service, be sure to review W2 Masters before sending your data to RDA.
  • Employer ID – If you change the Employer ID, the hyphen is acceptable; the hyphen will print on the W-2 but will be stripped out by the Electronic Filing process.
  • Compare the Employer ID field in your Payroll Deduction Descriptions to the Employer ID in the EFW2 Employer Master(s).
    • If the IDs differ, you may have omitted the step to Set Employer IDs in Deduction Descriptions.
    • Refer to Appendix E for instructions on running this report if the IDs differ.
  • W2 Types:
    • R = Employees subject to MEDICARE and FICA.
    • Q = Employees subject to MEDICARE only.


Step 3: View W2 Masters w/Blank Social Security Number


Procedure


  1. Go to HR → Payroll W2 Processing → Load tab → View Masters (in Xpert, go to Payroll → EFW2/W2 Submenu → View EFW2 Master)
  2. Click Search (binoculars).
  3. Range on Calendar Year YYYY, and on Social Security Number of (blank) to (blank).
  4. Click Select.
  5. If any masters are found, AND the Last Name field is also blank, select the master, and flag for deletion.


Comments


  • If you void all payrolls processed for an employee, the employee is loaded in to the W2 Masters with a blank SSN; this causes an error in the W-2 process; to correct, do the following:
    • Query W2 Masters, Ranging on SSN of (blank) to (blank).
      • If found, delete the master if the Last Name is also blank.
      • If Last Name is not blank, correct the SSN in W2 Masters and in Payroll.


Step 4: Set W2 Control Numbers (REQUIRED STEP)


Procedure


  1. Go to HR → Payroll W2 Processing → Load tab → Set Control Numbers (in Xpert, go to Payroll → EFW2/W2 Submenu → Set EFW2 Control Numbers)
  2. Select Calendar Year – should default to current calendar year.
  3. Starting Control Number – type the first number to assign; typically, 1 is used as the first number.
  4. Sort by Location – optional, additional sort. This will allow to print by location. If this sort is selected, the W2 Type will be ignored so to place all W2s by location. If not selected, will sort and print alphabetically and W2 Types will be separated (this sort does not affect the sort on the Electronic File)
  5. Sort by - Choose Primary Sort; choices are Employee ID, Name Last Lineage First Middle, Name First Last Middle Lineage, or Social Security Number.
  6. Range – not necessary. If setting numbers for multiple EINs, do not range on Employer ID. Numbers are assigned by Calendar Year, Employer ID and W2 Type.
  7. Click Run Report.


Comments


  • Each W2 Master is assigned a unique Control Number, in a sequence of numbers, and it becomes the unique identifier of that form.


  • Control numbers are assigned in the following order:
    • Employer ID
    • W2 Type
    • Type 0 – employees subject to MEDICARE and FICA.
    • Type 1 – employees subject to MEDICARE only.
    • Sort By – value as selected on the Range screen.


  • Use the View EFW2/W2 Masters to view the W2 Control Numbers assigned.


  • If Employer IDs were assigned incorrectly to Deduction Descriptions, this would be easily identified based on how the Control Numbers are assigned (since the first sort of Control Numbers is by Employer ID).