FY 1998

DATE:	July 23, 1997
SUBJECT:	Change in Organization Dues Deduction Amount
EFFECTIVE DATE:	September 1, 1997
CONTACT:	Janice Wolfley	(785) 296-3699
APPROVAL:
SUMMARY:	Correction to Effective Date for KAPE Organization Dues Change

This Circular will correct the effective date on Informational Circular No. 97-P-038, dated June 27, 1997. The Board of Directors for the Kansas Association of Public Employees (KAPE) has announced the following rate table effective with the pay period beginning August 10, 1997 and ending August 23, 1997, paid September 5, 1997:
 

The Division of Accounts and Reports, Payroll Services Team will make the necessary updates to the payroll system to affect all SHARP employees enrolled for the above KAPE dues deductions. Regents institutions are responsible for ensuring that these changes are reflected on all paychecks and all remittance interface files for paychecks issued on or after September 5, 1997.

SAM:JJM:CW

DATE:	August 6, 1997
SUBJECT:	Revised Fiscal Year 1998 GHI Composite Rates
EFFECTIVE DATE:	Pay Period Beginning August 10, 1997
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	Revised FY98 GHI Composite Rates

The Division of Budget has approved, published and sent agency indices for the FY98 GHI Composite Rates which are different from those included in Informational Circular number 97-P-037.  Since the first four paychecks in FY98 were charged at the lower rate included in 97-P-037, a recalculation has been done for the remaining 22 pay cycles of FY98 - resulting in yet a different rate from those published by Division of Budget. The net effect of the recalculation for your agency should be the same as if the new rate had been charged for all 26 cycles.

To illustrate how the recalculation for the new rates, an example is provided below.

Full Time Employee with Employee Dental:

The following new composite rates will be in effect for the pay period beginning August 10, 1997 and ending August 23, paid September 5, 1997:

SAM:JM:kb

DATE:	August 18, 1997
SUBJECT:	Revised Garnishment Calculations
EFFECTIVE DATE:	September 1, 1997
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	Garnishment Calculation

Effective September 1, 1997, the Federal government mandated a minimum wage rate increase to $5.15 an hour. Due to this increase, the calculations for amounts subject to garnishment have changed. The guidelines listed below should be followed for calculating the garnishment withholdings on a biweekly basis:

1. If the employee's disposable earnings are less than $309.00 for a biweekly pay period, pay the employee as if the employee's paycheck was not garnished.
2. If the employee's disposable earnings are between $309.00 and $412.00 for a biweekly pay period, pay the employee $309.00.
3. If the employee's disposable earnings are between $412.00 for a biweekly pay period, pay the employee 75% of the disposable earnings.

Regents are responsible for ensuring that these changes are reflected in all payroll checks issued on or after September 19, 1997 (i.e.; the payroll period 8/24/97-9/6/97).

SAM:JM:wem

DATE:	September 5, 1997
SUBJECT:	Kansas City Missouri Local Earnings Tax Calculation
EFFECTIVE DATE:	Paychecks issued on or after September 19, 1997
CONTACT:	Karen Banning	(785) 296-7458
APPROVAL:
SUMMARY:	Change to the Kansas City Missouri Earnings Tax Exemptions

The General Assembly of the State of Missouri has recently passed legislation that exempts from the City of Kansas City, Missouri's earnings tax "any contributions to any deferred compensation plans, such as but not limited to, any salary reduction plans, cafeteria plans or any other similar plans deferring the receipt of compensation by a resident or non-resident if such contribution is not subject to Missouri state income tax at the time such contribution is made". The savings and retirement plans which have been identified by the Payroll Services team as exempt are: KPERS (both regular and buy back amounts), VTSA, TSA (both regular and phased deductions), and Deferred Compensation (457DEF).

The new exemption is effective for all wages earned after August 27, 1997 (ie; the payroll period beginning August 24, 1997 and ending September 6, 1997, paid September 18, 1997).

SAM:JM:kb

DATE:	October 16, 1997
SUBJECT:	SHARP Bi-Weekly Payroll Schedule for Calendar Year 1998
EFFECTIVE DATE:	Calendar Year 1998
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	SHARP On-Cycle and Off-cycle Payroll Processing Schedules

Attached is the finalized SHARP bi-weekly on-cycle and off-cycle payroll schedules applicable to your agency for calendar year 1998.

The attached schedules provide important information regarding the critical payroll processing deadlines for each bi-weekly payroll period. Agency personnel responsible for payroll processing will need to ensure that all appropriate information is entered/submitted by the cutoff dates indicated on the schedules in order to ensure the timely issuance of pay for their employees. Time and leave interface agencies: please note that the deadline for submitting time and leave files for the payroll period ending December 27, 1997 is Friday, December 26. The deadline stated in Informational Circular No. 97-P-010 for submitting these files was incorrect.

SHARP off-cycle payrolls will generally be processed each Monday and Wednesday night and will include all activity entered into SHARP since the last off-cycle payroll. If a holiday occurs on a Monday or Wednesday, the off-cycle payroll will normally be changed to the following business day. Any payroll payments resulting from an off-cycle payroll will usually be dated three working days from the date the off-cycle was processed (i.e., payments resulting from a Monday off-cycle will almost always be dated the following Thursday; payments from a Wednesday off-cycle will almost always be dated the following Monday). Please note, however, that payments generated in the first off-cycle payroll for a payroll period (i.e., KA1 off-cycle) will be issued with the same paycheck/direct deposit date as the regular on-cycle pay date for that period. Agencies have until 5:00 p.m. on Mondays and Wednesdays to enter adjustment and/or supplemental data into SHARP for processing in that nights' off-cycle payroll.

Off-cycle payrolls for Regents' institutions are also regularly scheduled for each Monday and Wednesday night. Regents' institutions generally have until 5:00 p.m. on Fridays and Tuesdays to submit off-cycle payroll interface files. All interface files must then be approved by the Division of Accounts and Reports for processing by 5:00 p.m. on the following Monday or Wednesday to be included in that nights off-cycle payroll. Regents' off-cycle payrolls will be issued with the same check/advice date as the SHARP off-cycle processed that same night.

Attachment: SHARP Bi-Weekly Payroll Schedules (pdf)

DATE:	October 24, 1997
SUBJECT:	Key Payroll Processing Dates in November, 1997
EFFECTIVE DATE:	Immediately
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	Payroll processing deadlines which need to be noted due to the holidays which occur in November, 1997

Friday, November 28, 1997, is a designated holiday for state service in 1997; therefore, the pay date for the payroll period ending 11/15/97 is Wednesday, November 26, 1997. All paycheck stubs and advises issued to employees on November 14, 1997 will include a message informing the employee that the next pay date is Wednesday, November 26. Direct deposit advises will be mailed on Monday, November 24; paychecks will be mailed on Tuesday, November 25.

Due to the Veterans Day and Thanksgiving holidays in November, there are some other variations to the 'normal' payroll processing deadlines which occur during the month of November. Agencies are asked to note the following key payroll processing dates which occur on a day of the week that is different than usual:

Thursday, November 6 - Regents' on-cycle payroll files for the payroll period ending 11/01/97 are due to the Department of Administration by 6:00 am on November 6 to ensure timely issuance of the pay on November 14, 1997. (These are normally due on Friday)

Friday, November 14 - Time and leave interface agencies must have time and leave files for the period ending 11/15/97 submitted to the Department of Administration for processing by 5:00 pm on November 14 (normally due on Monday). Paper-user agencies should submit time and leave documents to Payroll Services by 5:00 pm on November 14.

Monday, November 17 - Paysheets for the on-cycle payroll for the period ending 11/15/97 will be created on November 17 (normally created on Tuesday). All job actions (i.e., promotions, terminations, new hires, leave of absences, step increases, etc.) must be entered by 5:00 pm on November 17 in order to be reflected on the paysheets for this period. The first on-cycle preliminary pay calculation for the period ending 11/15/97 will also occur on November 17; therefore, all time and leave data should be entered into SHARP and designated 'OK to process' by 5:00 pm.

Tuesday, November 18 - The last SHARP off-cycle (KA4) and the last Regents' off-cycle for the payroll period ending 11/01/97 will be processed on November 18 (normally processed on Wednesday). SHARP agencies have until 5:00 pm on November 18 to enter supplemental and/or adjustment run controls for the KA4 off-cycle payroll. Regents' off-cycle payroll files must be approved by 5:00 pm on November 18 in order to be included in the off-cycle. In order to be approved by 5:00 pm on November 18, the Regents' off-cycle payroll files must be received by 5 pm on the preceding business day. Checks for this off-cycle will be dated November 24, 1997. The KPAY303 data file for the period ending 11/01/97 will also be created on November 18.

Wednesday, November 19 - Final pay confirmation for the on-cycle payroll for the period ending 11/15/97 will occur on November 19 (normally occurs on Friday). All employees' time and leave records must be 'OK to Process' by 5:00 pm on November 19 in order for a paycheck record to be created. All deduction and tax data changes must be entered by 5:00 pm on November 19 in order to be reflected in the final paycheck created for the employee. The general ledger extract for the period ending 11/01/97 will also be created on this date. Regents' on-cycle payroll files for the payroll period ending 11/15/97 are due to the Department of Administration by 6:00 am on November 19 to ensure timely issuance of the pay on November 26, 1997. PLEASE NOTE: Only two SHARP preliminary payroll calculations will occur for the period ending 11/15/97. In addition, an off-cycle will not be available to process late paychecks with the same pay date as the on-cycle payroll. The earliest date that an employee can receive an off-cycle check for the period ending 11/15/97 is Monday, December 1, 1997, providing the necessary supplemental or adjustment run control has been entered by 5:00 pm on Monday, November 24.

Thursday, November 20 - On-line access to SHARP for all users will not be available due to batch processing which must occur to ensure timely issuance of payroll on November 26, 1997.

Friday, November 21 - Final on-cycle SHARP payroll reports, with the exception of the KPAYWAGE, will be available on November 21 in the agency directories on the MVS. Final on-cycle payroll reports (except for the KPAYWAGE) for paper-user agencies will be distributed on November 21.

Monday, November 24 - KPAYWAGE reports for the on-cycle for the payroll period ending 11/15/97 will be available on November 24 in the agency directories. KPAYWAGE reports for paper-user agencies will be distributed on November 24. The first SHARP off-cycle (KA1) and the first Regents' off-cycle for the payroll period ending 11/15/97 will be processed November 24. SHARP agencies have until 5:00 pm on this date to enter supplemental and/or adjustment run controls for the KA1 off-cycle payroll. Regents' offcycle payroll files must be approved by 5:00 pm on November 24 in order to be included in the off-cycle. In order to be approved by 5:00 pm on November 24, the Regents' off-cycle payroll files must be received by 5 pm on the preceding business day. PLEASE NOTE: paychecks for this off-cycle will be dated December 1, 1997 (NOT NOVEMBER 26). Encumbrance transactions for the SHARP on-cycle payroll for the period ending 11/15/97 will be posted to STARS during Monday night's STARS batch processing cycle.

Wednesday, November 26 - PAYDAY for the payroll period ending 11/15/97. The second SHARP off-cycle (KA2) and the second Regents' off-cycle for the payroll period ending 11/15/97 will be processed. SHARP agencies have until 5:00 pm on this date to enter supplemental and/or adjustment run controls for the KA2 off-cycle payroll. Regents' offcycle payroll files must be approved by 5:00 pm on November 26 in order to be included in the off-cycle. In order to be approved by 5:00 pm on November 26, the Regents' off-cycle payroll files must be received by 5 pm on the preceding business day. Checks for this offcycle payroll will be dated December 3, 1997.

Attached is a calendar for the month of November, 1997 which highlights the key payroll processing activity for the month. This calendar does not provide the same level of detail as that provided in this informational circular nor in the SHARP bi-weekly payroll schedule issued under Informational Circular No. 97-P-010 dated December 2, 1996. The attached calendar is intended for use as a supplementary reference tool to these informational circulars.

Please make note of the above payroll processing dates and adjust your schedules accordingly. If, in order to ensure the timely issuance of the payroll, it becomes necessary to change any of the processing dates identified above, notification of the change will be provided to all state agencies via the SHARP on-line message panel. On-line user agencies should be reviewing the SHARP message panel on a daily basis to determine if new messages have been added. Paper-user agencies will be notified of any changes to these dates via telephone.

SAM:JJM:wm

Attachment: November Calendar

DATE:	October 31, 1997
SUBJECT:	Board of Regents Institutions
EFFECTIVE DATE:	January 23, 1998
CONTACT:	Myrene Bears	(785) 296-5368
APPROVAL:
SUMMARY:	Regents Remittance Interface Files -- Change to STARS Funding.

Effective with the 1998 group health insurance (GHI) contract, payments to providers will be based on membership rather than payroll deductions. This change begins with the pay period end date of January 10, 1998 and a check issue date of January 23, 1998. The change in procedures impacts the Regents Remittance Interface File process and the STARS funding files that are sent to Payroll Services.

Remittance Interface Files:

- The last GHI data sent via the Regents Remittance Interface File Process will include all payrolls processed with check issue dates of January 3, 1998 through January 19, 1998 for the 1997 Contract Period. This file will be due on or before February 3, 1998. This will also be the last Remittance Interface File.

- Remittance interface files for organization dues, united way, OGL, death & disability (KPERS), first day coverage (KPERS) and prior service (KPERS) are no longer required. Remittances will be processed based on data from the Regents Payroll Interface files.

- To help insure that no remittance information is lost during the transition, include any payroll files submitted for the January 2, 1998 off cycle on the December 1997 Remittance Interface File due to Payroll Services by January 5, 1998. Include this data even if the file does not get processed for some reason with a January 2 check issue date or the transactions have not processed to STARS by the time the Remittance Interface file is sent.

STARS Funding File:

- The attached "Index Codes for Agency and DOA Clearing Funds" replaces the one included with the letter dated August 29, 1997 addressing "New STARS Index Codes and Regent Transaction Processing". The funding changes impact fund 7700 on the STARS Funding Interface and are required so that transfers can be made from the DOA Payroll Clearing fund to Division of Personnel Services Health Benefits Administration fund at the provider level. No change is being requested for the DA175-176 process. These changes can be migrated to production anytime after January 1, 1998, but must be in place for the checks issued January 23, 1998.

Summary:

• Remittance Interface File Process will be Eliminated:
  - Last transmission for funds other than GHI will be January 5, 1998: include check issue date of 1/2/98.
  - Last transmission for GHI will be February 5, 1998: January deductions for 1997 contract for pay cycles with check issued date through 1/19/98.
• STARS Funding File will have a change in GHI index codes for fund 7700 (DOA Payroll Clearing Fund), to be in production by the on cycle with a check issue date of 1/23/98.

Questions regarding this informational circular should be directed to the Division of Accounts and Reports, Myrene Bears, Payroll Services at (913) 296-5368.

SAM:JJM:MHB

Attachment: INDEX CODES FOR AGENCY AND DOA CLEARING FUNDS (pdf)

DATE:	October 28, 1997
SUBJECT:	Change in Organizational Dues Deduction Amount
EFFECTIVE DATE:	November 14, 1997
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	Organization Dues Change for NAGE, Locals 145, 147, and 156

The delegates to the national convention of the National Association of Government Employees (NAGE) unanimously voted to increase the dues of all NAGE members to $9.00 per bi-weekly period. Effective with the payroll period beginning October 19, 1997 and ending November 1, 1997, paid November 14, 1997, organization dues deductions for NAGE are as follows:
 

The Division of Acounts and Reports, Payroll Services Team will make the necessary updates to the payroll system to affect all SHARP employees enrolled for the above NAGE dues deductions. Regents institutions are responsible for ensuring that these changes are reflected on all paychecks and all remittance interface files for paychecks issued on or after November 14, 1997.

SAM:JJM:LAK

DATE:	November 21, 1997
SUBJECT:	Change in Social Security Base Rate
EFFECTIVE DATE:	January 1, 1998
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	Social Security Wage Base Increases to $68,400 effective January 1, 1998

Beginning January 1, 1998 the social security wage base for OASDI will be increased. The employee and employer contribution rates will remain the same.

The OASDI wage base will increase to $68,400, up from the 1997 wage limit of $65,400. The employee contribution rate remains at 6.2% with a maximum employee contribution of $4240.80. There is no limit on the Medicare wage base. The employee and employer contribution rates for the Medicare tax remain at 1.45%.

For Federal employees at Kansas State University who were hired before January 1, 1984, the employee contribution rate for reduced FICA remains at 1.45% and beginning January 1, 1994, there is no maximum. Federal employees hired after January 1, 1984 will have a contribution maximum for OASDI of $4240.80 and HI (Medicare) will have no maximum. The employer rates remain the same as the employee rates.

For Kansas Police and Fireman's program participants who are subject to the mandated Medicare coverage, the contribution rate remains at 1.45% and beginning January 1, 1994 there is no maximum.

The Department of Administration will make all of the necessary changes in the computation of payroll for SHARP agencies. Regents Institutions are responsible for implementing the new base rate changes in their respective payroll systems effective with all payroll warrants issued on or after January 1, 1998.

SAM:JJM:CW

DATE:	November 21, 1997
SUBJECT:	New Tables for State Withholding Tax for 1998
EFFECTIVE DATE:	January 1, 1998
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	New State Withholding Tax Rates Effective for Paychecks Issued On or After January 1, 1998

The Kansas Department of Revenue has issued new percentage tables for computing the state withholding tax deductions effective for all paychecks issued on or after January 1, 1998. The standard deduction for one withholding allowance remains the same at $2000.00 per year in calendar year 1998.

The attached tables have been prepared for use in computing all state withholding tax payments for wages paid on or after January 1, 1998. When calculating federal and state withholding tax by annualizing, 26 pay periods should be used to arrive at an annualized amount.

At the present time, the Internal Revenue Service has not released updated tax tables for calculating 1998 federal income tax withholding and/or earned income credit. A separate Informational Circular will be issued when those tables are released.

The Department of Administration will make all of the necessary changes in the computation of withholding taxes for SHARP agencies. Regents Institutions are responsible for implementing the new withholding tax rates in their respective payroll systems effective with all payroll warrants issued on or after January 1, 1998.

SAM:JJM:CW

Attachment: Schedule A (State Withholding Tax) (pdf)

DATE:	November 26, 1997
SUBJECT:	New Tables for Earned Income Credit for 1998
EFFECTIVE DATE:	January 1, 1998
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	New Earned Income Credit Rates Effective for Paychecks Issued On or After January 1, 1998

The Internal Revenue Service (IRS) has issued the new percentage tables for computing the advance earned income credit (EIC) payments effective for all paychecks issued on or after January 1, 1998. The attached tables have been prepared for use in computing all EIC payments for wages paid on or after January 1, 1998. When calculating EIC by annualizing, 26 pay periods should be used to arrive at an annualized amount.

The Internal Revenue Service has released the 1998 Form W-5, Earned Income Credit Advance Payment Certificate. A copy of the 1998 Form W-5 is attached; the 1997 Form W-5 expires on December 31, 1997. The new form must be filed with the employer before advance 1998 payments can begin. Generally, employees have to successfully answer questions listed on page 2 of Form W-5 in order to be eligible for advance payments. Advance EIC qualifiers must have at least one qualifying child and expect that 1998 earned and adjusted gross income will each be less than $26,473 (include spouses' income if filing jointly), in addition to meeting other criteria. Employees cannot claim the EIC if planning to file either Form 2555 or 2555-EZ (relating to foreign earned income) for 1998. A nonresident alien may not claim the EIC for 1998 unless married to a U.S. citizen and elects to be taxed as a resident alien for all of 1998.

There are two employee status categories that can effect the amount of advance EIC payments: (a) single or married without spouse filing certificate, and (b) married with both spouses filing certificate. Married employees must indicate on Form W-5 if their spouse receives advance EIC payments. When updating the employee's EIC status in SHARP, please verify that the federal tax data record correctly reflects the employee's status as shown on the completed Form W-5.

The Department of Administration will be updating the existing SHARP federal tax data records on December 22, 1997, for all employees currently claiming the EIC to reflect an Earned Income Credit status of 'Not applicable'. The tax data record updates will be effective January 1, 1998. On-line agencies must enter a new effective-dated row into SHARP for employees who wish to claim the EIC in calendar year 1998; paper user agencies should submit an employee data sheet to the Division of Personnel Services for employees who wish to claim the EIC in 1998. The new tax data row should be added effective January 2, 1998. Please refer to Pages 19 through 28 of the SHARP Payroll Participant Guide (Rev. 10-96) for specific instructions on entering employee tax data information.

The Division of Accounts and Reports will provide a listing to agencies which identifies all employees whose EIC status was updated in SHARP on December 22, 1997. The listing will include department, employee ID, name, SSN, and EIC exempt status.

The Department of Administration will make all of the necessary changes in the computation of EIC for SHARP agencies. Regents institutions are responsible for implementing the new EIC rates in their respective payroll systems effective with all payroll warrants issued on or after January 1, 1998.

SAM:JJM:CW

Attachments: Advanced Earned Income Credit Tables (pdf)

DATE:	November 26, 1997
SUBJECT:	New Tables for Federal Withholding Tax for 1998
EFFECTIVE DATE:	January 1, 1998
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	New Federal Withholding Tax Rates Effective for Paychecks Issued On or After January 1, 1998

The Internal Revenue Service (IRS) has issued advance copies of the new federal percentage tables for computing the federal withholding tax deductions effective for all paychecks issued on or after January 1, 1998. In addition, the standard deduction for one withholding allowance changes to $2,700.00 per year in calendar year 1998.

The attached tables have been prepared for use in computing all federal withholding tax payments for wages paid on or after January 1, 1998. When calculating federal and state withholding tax by annualizing, 26 pay periods should be used to arrive at an annualized amount. Please refer to Division of Accounts and Reports Informational Circular No. 98-P-010, issued November 21, 1997 for the state withholding tax formula.

IRS regulations require employees who claim an exempt status from federal withholding tax, for income earned in the United States, to file a new W-4 form annually; employees who claimed an exempt status in calendar year 1997 must file a new W-4 form for calendar year 1998 if they wish to continue their exempt status.

Employees may be eligible for the withholding tax exempt status if the following criteria are met:

1. The employee had no income tax liability in the previous year; and,
2. The employee anticipates no income tax liability in the upcoming year.

The Department of Administration will be updating the SHARP federal and state tax data records on December 22, 1997, for all employees currently claiming exemption from withholding; the tax data record updates will be effective January 1, 1998. On-line agencies must enter a new effectivedated row into SHARP for employees who wish to claim exemption from withholding. Paper user agencies should submit an employee data sheet to the Division of Personnel Services for employees who wish to claim exemption from withholding in 1998. The new tax data row should be added effective January 2, 1998. Please refer to Pages 19 through 28 of the SHARP Payroll Participant Guide (Rev. 10-96) for specific instructions on entering employee tax data information.

The Division of Accounts and Reports will provide a listing to agencies which identifies all employees whose withholding tax status was updated on December 22, 1997. The listing will include department, employee ID, name, SSN, and withholding tax exempt status.

The Department of Administration will make all of the necessary changes in the computation of withholding taxes for SHARP agencies. Regents institutions are responsible for implementing the new withholding tax rates in their respective payroll systems effective with all payroll warrants issued on or after January 1, 1998.

SAM:JJM:CW

Attachment:

DATE:	December 2, 1997
SUBJECT:	1997 Calendar Year-End Processing
EFFECTIVE DATE:	Immediately
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	Schedule for Processing Transactions During 1997 Calendar Year-End

As 1997 calendar year-end approaches, the Division of Accounts and Reports has begun making preparations for the issuance of calendar year 1997 Wage and Tax Statements (Forms W-2) and Non- Resident Alien Compensation Statements (1042-S). Any adjustments processed after the established cut-off dates may result in the issuance of corrected W-2's (Forms W-2C) by the Payroll Section for the employees involved.

Please keep in mind that any paycheck adjustments (except for salary underpayments) that are processed after December 31, 1997 should not include any adjustment to the amount of the original federal and/or state withholding tax deducted on the original paycheck, even if the adjustment is tax effecting. Therefore, every effort should be made to process adjustments by the established deadlines.

FINAL 1997 PAYCHECK AND 1997 PAYCHECK REVERSALS

The final on-cycle paycheck for calendar year 1997 will be issued December 24, 1997. Paychecks will be mailed on December 23, 1997 and advices will be mailed on December 22, 1997.

The Regents Institutions on-cycle files for payroll period ending December 13, 1997 are due to the Department of Administration by 6:00 a.m. on Wednesday, December 17, 1997 to ensure timely issuance of pay on December 24, 1997.

Time and leave interface agencies must have time and leave files for the period ending 12/13/97 submitted to the Department of Administration for processing by 5:00 pm on Friday, December 12 (normally due on Monday). Paper-user agencies should submit time and leave documents to Payroll Services by 5:00 pm on December 12.

Paysheets for the on-cycle payroll for the period ending 12/13/97 will be created on Monday, December 15 (normally created on Tuesday). All job actions (i.e., promotions, terminations, new hires, leave of absences, step increases, etc.) must be entered by 5:00 on December 15 in order to be reflected on the paysheets for this period. The first on-cycle preliminary pay calculation for the period ending 12/13/97 will also occur on December 15; therefore, all time and leave should be entered in SHARP and designated 'OK to process' by 5:00 in order to review preliminary paycheck data.

The last SHARP off-cycle (KA4) and the last Regents' off-cycle for the payroll period ending 11/29/97 will be processed on Tuesday, December 16 (normally processed on Wednesday). SHARP agencies have until 5:00 pm on December 16 to enter supplemental and/or adjustment run controls for the KA4 off-cycle payroll. Regents' off-cycle payroll files must be approved by 5:00 pm on December 16 in order to be included in the off-cycle. In order to be approved by 5:00 pm on December 16, the Regents' off-cycle payroll files must be received by 5 pm on the preceding business day. Checks for this off-cycle will be dated Monday, December 22, 1997. The KPAY303 data file for the period ending 11/29/97 will also be created on December 16.

Final pay confirmation for the on-cycle payroll for the period ending 12/13/97 will occur on Wednesday, December 17 (normally occurs on Friday). All employees' time and leave records must be 'OK to process' by 5:00 pm on December 17 in order for a paycheck record to be created. All deduction and tax data changes must be entered by 5:00 pm on December 17 in order to be reflected on the final paycheck created for the employee. The general ledger extract for the period ending 11/29/97 will also be created on this date. PLEASE NOTE: Only two SHARP preliminary payroll calculations will occur for the period ending 12/13/97. In addition, an off-cycle will not be available to process late paychecks with the same pay date as the on-cycle payroll. The earliest date that an employee can receive an off-cycle check for the period ending 12/13/97 is Monday, December 29, 1997, providing necessary supplemental or adjustment run control has been entered by 5:00 pm on Monday, December 22, 1997.

On-line access to SHARP for all users will not be available on Thursday, December 18, 1997, due to batch processing which must occur to ensure timely issuance of payroll on December 24, 1997.

The final on-cycle SHARP payroll reports, with the exception of the KPAYWAGE, will be available on Friday, December 19 in the agency directories on the MVS. Final on-cycle payroll reports (except for the KPAYWAGE) for paper-user agencies will be distributed on December 19.

The KPAYWAGE reports for the on-cycle for the payroll period ending 12/13/97 will be available on December 22 in the agency directories. KPAYWAGE reports for paper-user agencies will be distributed on December 22. The first SHARP off-cycle (KA1) and the first Regents' off-cycle for the payroll period ending 12/13/97 will be processed December 22, 1997. SHARP agencies have until 5:00 pm on this date to enter supplemental and/or adjustment run controls for the KA1 off-cycle payroll. Regents' off-cycle payroll files must be approved by 5:00 pm on December 22 in order to be included in the off-cycle. In order to be approved by 5:00 pm on December 22, the Regents' offcycles payroll files must be received by 5 pm on the preceding business day. PLEASE NOTE: Paychecks for this off-cycle will be dated December 29, 1997 (NOT DECEMBER 24). Encumbrance transactions for the SHARP on-cycle payroll for the period ending 12/13/97 will be posted to STARS during Monday, December 22, 1997 nightly batch processing cycle.

The final off-cycle paycheck for calendar year 1997 will be issued on December 31, 1997 for the KA2 off-cycle processed on December 24, 1997. Any paychecks that are undeliverable should be reversed immediately. SHARP agencies have until 5:00 p.m. on December 22, 1997 to enter paycheck reversal requests to ensure processing in the December 31, 1997 off-cycle payroll (i.e. KA4 off-cycle); paper user agencies should submit Form DA-182, 'Paycheck Reversal or Reprint Request', for any paycheck reversals by 12:00 noon on December 22, 1997. Any reversal requests entered/received after 5:00 p.m./12:00 noon deadline on December 22, 1997 may result in the issuance of a W-2C to that employee. Paycheck reversals for paychecks issued on or before December 31, 1997 that are not entered by the 5:00 p.m. deadline on December 22, 1997 must be submitted immediately, via Form DA-182, to the Payroll Section in the Division of Accounts and Reports for processing. The original paycheck should accompany the DA-182.

Time and leave interface agencies must have time and leave files for the period ending 12/27/97 submitted to the Department of Administration for processing by 5:00 pm on Wednesday, December 24 (normally due on Monday). This is a change from informational circular 98-P-005. Paper-user agencies should submit time and leave documents to Payroll Services by 5:00 pm on December 24.

PAYCHECK ADJUSTMENTS (excluding salary underpayments)

SHARP agencies have until 5:00 p.m. on December 31, 1997 to enter paycheck adjustment requests for any 1997 paychecks. Adjustments processed in the December 31, 1997 off-cycle payroll will be reflected on the employee's 1997 Form W-2. If a 1997 paycheck has been previously adjusted and requires additional adjustment, form DA-180, 'Paycheck Adjustments', should be submitted to the Division of Accounts and Reports, Payroll Section by 5:00 p.m. on December 24, 1997. The December 24 deadline for submitting Form DA-180 also applies to all adjustment requests for paper user agencies. Any paycheck adjustments entered/received after the December 31/December 24  deadline may result in the issuance of a W-2C to the employee.

If an on-line user agency identifies a 1997 paycheck that needs to be adjusted after the December 31 deadline, the agency will still be able to enter the adjustment request using the 'Paycheck Adjustment' panel (located under the 'Process' menu in the 'Paysheets' window). However, the adjustment should not be entered until February 3, 1998 and, if the adjustment is tax effecting, the employee will receive a Form W-2C. Adjustment requests for any reason other than salary underpayments that are entered after December 31, 1997 but prior to February 3, 1998 will be deleted and will have to be re-entered by the agency.

SALARY UNDERPAYMENTS AND SUPPLEMENTALS

Adjustment requests entered on or after December 29, 1997 which are adjusting paychecks issued in 1997 and which have a reason code of 'A', 'D', or 'F' (i.e. salary underpayment) will not result in a W-2C; the additional earnings resulting from this type of adjustment will update the employee's 1998 payroll balances since the paycheck issue date will be in 1998. (The KA3 off-cycle generated on the night of December 29, 1997, will have an issue date of January 2, 1998.) Likewise, any supplemental requests entered by agencies, or entered centrally, on or after December 29 will also update the employee's 1998 payroll balances.

REGENTS INSTITUTIONS: OFF-CYCLE FILES

1997 Salary Underpayments and Supplementals

In order to update employee balances for 1997, any salary underpayments and supplementals must be submitted no later than 5:00 pm on Tuesday, December 23, 1997. The KA2 off-cycle for the pay period ending December 13, 1997 generated on the night of December 24, 1997 will have the issue date of December 31, 1997. These files should contain a 'C' indicating current year business and the pay adjust check date should be blank.

1998 Salary Underpayments and Supplementals

Any salary underpayments or supplementals submitted after 5:00 pm on Tuesday, December 23, 1997, will be considered to be 1998 business regardless of the pay period end date that the pay is related to. Since the paycheck issue date will be in 1998, the employee's 1998 balances will be updated. These files should contain a 'C' indicating current year business, the pay adjust check date should be blank, and the adjustment type should be 'EARNGS'.

Regents institutions may continue to submit 1998 salary underpayments and supplementals throughout the month of January 1998. The activity will be processed on the regular Monday and Wednesday off-cycle schedule and will update 1998 payroll balances.

1997 Adjustments and Reversals (Excluding Salary Underpayments and Supplementals)

Regent Institutions must submit all transmittals for 1997 adjustments and paycheck reversals by 5:00 p.m. on Tuesday, December 30, 1997 in order to update the employee's 1997 W-2. The payroll interface files submitted on or before December 23, 1997 must contain a 'C' indicating current year business. Payroll interface files submitted after December 23, 1997 must contain a 'P' indicating prior year business and the pay adjust check date must contain a valid 1997 date.

Any 1997 paycheck adjustments identified after the December 30, 1997 deadline will not be processed until the February 4, 1998 off-cycle payroll. Since the files will be held, please do not begin submitting those files for processing until the week of January 26, 1998. However, Regents institutions may continue to submit activity for years 1996 and prior during the month of January. The deadline for submitting payroll interface files for the February 4 off-cycle is 5:00 p.m. on February 3, 1998.

As a reminder, separate payroll interface files must be submitted for any prior year activity and the files must be separated by calendar year (i.e., 1997 and 1996 activity cannot be included on the same payroll interface file). Furthermore, if the interface file is for prior calendar year activity, the file should contain a 'P' indicating prior year business and within every employee pay detail record, the pay adjust check date must contain a valid date corresponding to the year to be updated. Additionally, prior year pay details should never result in a change to an employee's balance for federal or state taxes. Prior year files will only be processed once a week in the Wednesday night off-cycle.

GENERAL REMINDERS

The deduction END date on the general deduction panel for 1997 United Way contributions should be dated between December 14, 1997 and December 27, 1997 in order for the last 1997 deduction to be taken on the paycheck issued December 24, 1997. Agencies should verify the deduction end date for all employees enrolled in United Way to ensure deductions are taken correctly. For calendar year 1998, agencies can enter a new row effective-dated between December 14, 1997 and December 27, 1997 in order for the first deduction for 1998 to be taken on the January 9, 1998 paycheck. If the 1998 deduction is to be taken over 26 pay periods, a deduction end date of December 13, 1998 should be entered.

It is very important that multiple adjustments for one employee be processed in the same off-cycle run. Effective January 29, 1998, depending on the type of adjustment, processing in different cycles may result in the issuance of multiple W-2C forms to the employee. Please verify prior to processing a prior year adjustment for an employee that all other paychecks are correct for that employee and do not require adjustment also.

Every effort should be made to collect all arrearage balances either by personal reimbursement or paycheck deduction prior to the cut-off date of December 31, 1997 (December 24, 1997 for paper user agencies). Please evaluate all existing arrearages for your agency and verify that collection will be made. For sufficiently large balances that cannot be collected in one sum, agencies should establish an 'Arrears Payback Schedule' as soon as possible so paycheck deductions can be made and the balance collected by the cut-off date. Also, as adjustments are processed from now until the end of the year, please monitor any new arrearage balances and collect in an expedient manner.

The 1997 W-2 forms will again be mailed directly to the employee's home address stored on the Personal Data 1 panel in the Personnel Administration window. Please make any name, address, or social security number changes to this panel by January 2, 1998 to guarantee their inclusion in the W-2 data. However, since this panel is not effective dated, the information on the panel as of the day the final W-2 data is loaded will be the data reflected on the W-2 form. This final load may take place anytime between January 4, 1998 and January 15, 1998.

Regents Institutions should make their name, address, and social security number changes by submitting them through the management reporting interface by 5:00 p.m. on January 2, 1998.

W-2 forms will be mailed on or before January 31, 1998. A message will appear on the SHARP message panel to advise agencies of the W-2 mailing date during the latter part of January.

Attached is a calendar for the month of December 1997 which highlights the key payroll processing activity. This calendar does not provide the same level of detail as that provided in this informational circular or in the SHARP bi-weekly payroll schedules issued under Informational Circular 98-P-005, dated October 16, 1997. The attached calendar is intended for use as a supplementary reference tool to these informational circulars.

Please make note of the above payroll processing dates and adjust your schedules accordingly. If, in order to ensure the timely issuance of payroll, it becomes necessary to change any of the processing dates identified above, notification of the change will be provided to all state agencies via the SHARP on-line message panel. On-line agencies should be reviewing the SHARP message panel on a daily basis to determine if new messages have been added. Paper-user agencies will be notified of any changes to these dates via telephone.

Attachment: December Payroll Calendar (pdf)

DATE:	December 15, 1997
SUBJECT:	Deferred Compensation Limit
EFFECTIVE DATE:	January 1, 1998
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	Limit increase to $8,000 for Deferred Compensation

Per the Internal Revenue Service Information Release 97-41, the annual deferred compensation limit under Section 457(b)(2) rises from $7,500 to $8,000, effective January 1, 1998.

Aetna will notify all Deferred Compensation Plan Participants that are currently at the limit, giving them the opportunity to increase their contributions. Please inform employees in your agency of this change.

Any questions regarding this circular should be directed to Janice Wolfley in Payroll Services, Division of Accounts and Reports at (785) 296-3699.

JJM:CJ

DATE:	December 24, 1997
SUBJECT:	Addition of New Earnings Codes
EFFECTIVE DATE:	December 28, 1997
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	Earnings Codes to Report Bonus Payments for Information Technology Positions and Earnings Codes for KUMC Nurses

Executive Directive 97-264 establishes a variety of premium pay options that are available to agencies to enhance the recruitment and retention of information technology employees. Effective with the payroll period beginning December 28, 1997, ten new earnings codes will be available for use to compensate technology employees who are eligible to receive bonus payments. Please refer to the memorandum dated December 2, 1997, issued to all state agencies by the Division of Personnel Services, that details the guidelines for these bonus payments.

The new bonus earnings codes are as follows:

New earnings codes to record the associated increase in overtime due to a bonus payment are as follows:

The Division of Personnel Services will be issuing a memorandum to agencies with instructions on how to enter the bonus codes in SHARP. Questions regarding the appropriate use of these earnings codes should be directed to Spud Kent, Division of Personnel Services, at (785) 296-2069.

At the request of the University of Kansas Medical Center, three new earnings codes have been added to the SHARP system to record different types of shift earnings for nurses. The earnings codes will be effective with the payroll period beginning December 28, 1997.

The earning codes are as follows:

JJM:CJ

DATE:	December 31, 1997
SUBJECT:	Change in Organization Dues Deduction Amount
EFFECTIVE DATE:	January 11, 1998
CONTACT:	Janice Wolfley	(785) 296-3699
APPROVAL:
SUMMARY:	Organization Dues Changes for AFSCME Locals

Please be advised that the regular bi-weekly dues for members of the following AFSCME-Kansas Public Employees' Union Council 64 will be changing effective with the payroll period beginning January 11, 1998 and ending January 24, 1998 paid February 6, 1998:
 

There is no change in the deduction amount for the following AFSCME organizational dues deduction codes: ORG270, ORG357, ORG469, and ORG777. The deduction amount for these codes remain as indicated in Informational Circular No. 97-P-017 issued January 27, 1997.

The Division of Accounts and Reports, Payroll Services team will make the necessary updates to the SHARP system to effect these changes for all employees for whom SHARP calculates pay. Regents institutions are responsible for ensuring that these changes are reflected on all paychecks issued on or after February 6, 1997.

SAM:JJM:CJ

DATE:	January 12, 1998
SUBJECT:	SHARP Bi-Weekly Payroll Schedule for Calendar Year 1998
EFFECTIVE DATE:	Calendar Year 1998
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	SHARP Off-cycle Payroll Processing Schedules

Attached is a corrected SHARP bi-weekly off-cycle payroll schedule applicable to your agency for calendar year 1998. This schedule replaces the off-cycle schedule originally issued as an attachment to informational circular 98-P-005.

The attached schedule provides important information regarding the critical off-cycle payroll processing deadlines for each bi-weekly payroll period. Please note the following corrections made to the 'SHARP KA3 5:00 pm Cutoff' dates on the attached off-cycle schedule:

Agency personnel responsible for payroll processing will need to ensure that all appropriate information is entered/submitted by the cutoff dates indicated on the schedule in order to ensure the timely issuance of pay for their employees. Please refer to informational circular 98-P-005 for further information relating to the processing of on-cycle and off-cycle payroll. There are no changes to the on-cycle schedule included with informational circular 98-P-005.

SAM:JJM:nr

Attachment: SHaRP Bi-Weekly Off-cycle Payroll Schedule for Calendar Year 1998

DATE:	January 12, 1998
SUBJECT:	W-2 Wage and Tax Statements for Calendar Year 1997
EFFECTIVE DATE:	Immediately
CONTACT:	Sunni Zentner	(785) 296-7058
APPROVAL:
SUMMARY:	Information Pertaining to Employee 1997 W-2 Statements

The final version of the KTXPR55 W-2 Listing has been generated. The KTXPR55 report contains all information printed on the 1997 W-2 Wage and Tax Statement for each employee of your agency. Agencies which are on-line users of SHARP will find the report in your agency mailbox on the MVS dated January 9, 1998. The KTXPR55 W-2 Listing will be distributed to paper user agencies via the normal report distribution process.

The KTXPR55 W-2 listing is sorted as follows: 1) by department number, 2) alphabetically by last name, and 3) by social security number (SSN). Totals are included for each 10-digit department number as well as a grand total summary for the entire agency. The 'DIST. TOTAL' represents the total number of 1997 W-2s that were printed for your agency. The Department of Administration will be preparing a STARS voucher to bill each agency for the applicable costs associated with mailing the 1997 W-2s.

In those instances where an employee has worked for more than one department, one W-2 form has been prepared which includes earnings and deductions for all departments. The W-2 information for these employees will appear on the KTXPR55 W-2 listing for the department in which the employee was last paid.

In situations where the address information is not correct or is not sufficient for postal delivery, the W-2 form will be mailed to the agency for distribution to the employee. The return address for all W-2 forms mailed this year will be the agency address.

All 1997 W-2s which are considered undeliverable to the employees and are returned to the agency by the U.S. Postal Service should be retained by the agency until April 15, 1998. At that time, they should be sorted in alphabetical order by last name, first name, middle initial within department number and returned to the Division of Accounts and Reports, Payroll Services.

In cases where the 1997 W-2 Wage and Tax Statement form does not agree with your records, please send a copy of the form to this office with an explanation. For all cases where the social security number is incorrect, please include a copy of the employee's social security card with the explanation. State agencies are not authorized to make changes on the W-2 forms. The Social Security Administration and the Kansas Department of Revenue must be notified of corrections made by the Department of Administration.

Duplicate laser printed W-2s for calendar year 1997 will be printed for distribution to the agencies on each Monday, beginning February 16, 1998 and continuing through April 13, 1998. The agencies are requested to submit one blanket request for duplicate 1997 W-2's for each printing. Requests received in the Division of Accounts and Reports, Payroll Services, by noon of each Thursday will be printed for distribution the following Monday. The requests should be in social security number order and should include each employee's name and employee ID in addition to the SSN. Requests for duplicate W-2s for years prior to 1997 should be submitted separately. Duplicate 1042S form requests should also be submitted separately.

Attachment A, which defines what items must be added (+) or subtracted (-) to arrive at the amounts shown on the W-2 form, has been included to assist agencies in answering questions regarding the W-2 forms. On-line agencies may also want to consider utilizing the SHARP KPAY318, 'Year-to-Date Balances' report to assist in answering W-2 related questions. See Accounts and Reports Informational Circular No. 97-P-005 dated October 31, 1996 for additional information regarding the KPAY318.

Some agencies will also be receiving Forms 4782, Employee Moving Expense Information, for employees of their agency who have an amount reported in Box 13P of Form W-2. Any amounts reported in Box 13P are reflected on the KTXPR55 report. Forms 4782 will be mailed on January 13, 1998 to the appropriate agencies. Please distribute each form to the appropriate employee as soon as possible. The employee will need the form to file with their tax return.

Please note that the on-cycle paychecks dated December 24, 1997 and the off-cycle paychecks dated December 31, 1997 are included in the 1997 W-2 amounts.

SAM:JJM:wm

Attachment: 1997 W-2 WAGE AND TAX STATEMENT (pdf)

DATE:	January 13, 1998
SUBJECT:	1998 W-2 Production Reports
EFFECTIVE DATE:	Immediately
CONTACT:	Sunni Zentner	(785) 296-7058
APPROVAL:
SUMMARY:	1998 W-2 Production Reports to be Run Throughout the Year

In an effort to reduce the time and effort required of Regents and SHARP agency personnel as well as Payroll Services staff at the end of the calendar year, the 1998 W-2 production reports will be produced throughout the calendar year. By producing the reports on a scheduled basis during the year, the work associated with identifying and correcting errors/address problems can be more evenly distributed. Following is a list of the dates the 1998 W-2 production reports are scheduled to be generated:

• Friday, January 23, 1998
• Friday, February 6, 1998
• Friday, March 6, 1998
• Friday, April 3, 1998
• Friday, May 1, 1998
• Friday, June 12, 1998
• Friday, July 10, 1998
• Friday, August 7, 1998
• Friday, September 4, 1998
• Friday, October 2, 1998
• Friday, October 30, 1998
• Friday, November 13, 1998
• Wednesday, November 25, 1998
• Friday, December 11, 1998
• Thursday, December 24, 1998

Agencies should anticipate finding copies of the KTXPR55 and TAX910ER reports in their agency directory on the first working day following the above listed scheduled dates. Agencies should access the TAX910ER through Rapid Filer to review the report; a copy of the TAX910ER will be distributed to paper agencies. Any necessary corrections should be processed as soon as possible to eliminate the error from appearing on the next TAX910ER report that is generated. No action is required by the agency on the KTXPR55. Once the W-2s for 1998 are complete, a "final" KTXPR55 report will be generated for each agency's information and review. An informational circular will advise agencies of the date the final KTXPR55 report is created.

In addition, the Regents' institutions will receive, via either e-mail or fax from Payroll Services, a copy of the errors from the 1998 KTAX900 report. The KTAX900 report should be thoroughly reviewed and any correcting transactions processed timely. It will continue to be the Regents' responsibility to use the Management Reporting Interface file (MRI) to reconcile the year-to-date amounts in SHARP to the year-to-date amounts in their individual payroll systems.

Regents' institutions are also reminded, in accordance with Informational Circular No. 1242 issued March 2, 1994, to submit copies of the completed forms 8233, Exemption From Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual, to Payroll Services on a timely basis.

SAM:JJM

DATE:	January 13, 1998
SUBJECT:	Addition of New Earnings Code
EFFECTIVE DATE:	Immediately
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	Earnings Code to Track Employees Who Receive Paid Leave for Union Activities

At the request of the Division of Personnel Services, the earnings code listed below has been added to allow the Labor Relations Unit to track the cost associated with employees who receive paid leave for union activities. This earnings code is effective immediately and can only be used by those employees who are active on a Meet and Confer team and have been authorized to use this earnings code by the Department of Administration, Division of Personnel Services. This earnings code does count toward leave accrual, but not FLSA.
 

SAM:JJM:wm

DATE:	January 15, 1998
SUBJECT:	IRS Notice 97-73 - Returns Relating to Higher Education Tuition and Related Expenses
EFFECTIVE DATE:	January 15, 1998
CONTACT:	Nancy Ruoff	(785) 296-5369
APPROVAL:
SUMMARY:	Notification of potential Regent reporting responsibilities for 1998 under Section 6050S of the IRC in connection with the Hope Scholarship Credit and the Lifetime Learning Credit.

This office has reviewed a copy of IRS Notice 97-73 on "Returns relating to higher education tuition and related expenses" which appeared in Internal Revenue Bulletin 1997-51, dated December 22, 1997. Attached is a copy of Notice 97-73 as it appears in I.R.B. 1997-51. This notice "describes the information reporting requirements for 1998 under Section 6050S of the Internal Revenue Code (as enacted by the Taxpayer Relief Act of 1997, Pub. L. No. 105-34, Section 201 (c), 111 Stat. 804 (the Act)) that apply to certain educational institutions in connection with the Hope Scholarship Credit and the Lifetime Learning Credit." Pending the issuance of regulations by the Treasury Dept., this notice describes who must report information, and the nature of the information that will be required to be reported under Section 6050S for 1998.

Each Board of Regents' institution will be responsible for determining the applicability of the requirements of Section 6050S to their institution and for submitting any required forms/reports to the Internal Revenue Service.

SAM:JJM:NR

Attachment: IRS Notice 97-73 (pdf)

DATE:	January 26, 1998
SUBJECT:	Change in Organization Dues Deduction Amount
EFFECTIVE DATE:	February 6, 1998
CONTACT:	Janice Wolfley	(785) 296-3699
APPROVAL:
SUMMARY:	Organization Dues Changes for ORG060

Please be advised that the regular bi-weekly organization dues for members of the Fraternal Order of Police, Lawrence Lodge #2, deduction code 'ORG060', will be changing to $10.00 per bi-weekly period effective with the payroll period beginning January 11, 1998 and ending January 24, 1998 paid February 6, 1998.

The Division of Accounts and Reports, Payroll Services team will make the necessary updates to the SHARP system to effect these changes for all employees for whom SHARP calculates pay. Regents institutions are responsible for ensuring that these changes are reflected on all paychecks issued on or after February 6, 1998.

SAM:JJM:CJ

DATE:	February 16, 1998
SUBJECT:	Issuance of IRS Revenue Procedure 98-16
EFFECTIVE DATE:	February 2, 1998
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	New IRS Standards for Student FICA Withholding Exceptions

Please be advised that the Internal Revenue Service has issued Revenue Procedure 98-16 in Internal Revenue Bulletin 1998-5. Revenue Procedure 98-16 details new IRS standards for determining if the wages of student workers are excluded from FICA withholding. In accordance with the Revenue Procedure, the substantiation requirements for colleges and universities in determining their student's FICA status are greatly simplified. Following are some key portions of the Revenue Procedure:

Copies of Internal Revenue Bulletins are available on the Internet at the IRS website located at http://www.irs.ustreas.gov.

Regents Institutions are responsible for properly determining the FICA status of employees at their institution and for withholding the correct tax amounts.

SAM:JJM:eb

• Standardization of the definitions of 'student'
• Elimination of the IRS '12/20 rule'
• Permission for each college or university to determine the appropriate number of credit or unit hours that qualify their students for the FICA exclusion
• Exclusion of FICA withholding to services performed by a student during school breaks up to five weeks in length

DATE:	March 16, 1998
SUBJECT:	Employee Taxability for the Value of Certain Uses of State-Owned Vehicles
EFFECTIVE DATE:	Immediately
CONTACT:	Nancy Ruoff	(785) 296-3146
APPROVAL:
SUMMARY:	Information Pertaining to Employee Use of State-Owned Vehicles

This Informational Circular is issued as an update to Informational Circular No. 97-P-025, dated March 10, 1997. The information provided herein is based on current provisions of Internal Revenue Code and Regulations, as well as Kansas Statutes Annotated and Administrative Regulations.

REQUIREMENTS

If a state-owned vehicle is used for business purposes only and kept on the business premisses except for business use and repair, there is no taxable "personal use". However if a vehicle is taken to an employee's personal residence (commuting) or is used for other "personal use", there is fringe benefit income. (Except for those exclusions set forth in Appendix D.)

In order to limit the fringe benefit income to commuting only, the following conditions must exist:

1. The vehicle must be owned or leased by the employer and be provided to employees for use in connection with the employer's business;
2. For business reasons, the employer requires the employee to commute to and/or from work in the vehicle;
3. The employer establishes a policy under which the employee may not use the vehicle for personal purposes, other than commuting or de minimis personal use;
4. The employer reasonably believes that, except for de minimis use, the employee does not use the vehicle for any personal purpose other than commuting;
5. The employee required to use the vehicle is not a control employee, i.e., an elected official, or appointee of the Governor who is confirmed by the Senate or other state officer comparable to the above officials; and
6. The employer accounts for the commuting use by including the appropriate amount in the employee's gross income.
7. The amount of fringe benefit income to be reported must be determined utilizing one of the IRS approved valuation methods, i.e., Annual Lease, Commuting, or Cents-Per-Mile valuation rules. See Appendix A.
8. Field employees, such as inspectors, who work (travel) out of their homes and have no office or duty location would be subject to these reporting requirements. However, only trips incidental (other than the initial trip to and the trip home at the end of the day) are considered commuting for IRS reporting purposes.

A work sheet for computing the biweekly fringe benefit income amount has been designed to assist agency personnel/payroll officers in computing the biweekly amount of the fringe benefit income. See Statement of Personal Usage for State Provided Vehicles, Appendix B.

POLICY

1. The State's adopted policy as stated in K.S.A. 8-301 is that all state-owned vehicles are for official state business only, and may not be used for private business or for pleasure. However, specific exceptions contained in K.A.R. 1-17-2a permit employees to drive state vehicles home as follows:
    
   1. State-owned or leased motor vehicles shall not be used to commute between the employee's residence and the employee's official work station, except:
       
      1. when parking the vehicle at the official work station overnight subjects the vehicle to a high risk of vandalism;
      2. when the vehicle is used by an official or employee who is regularly called to duty after normal work hours in connection with law enforcement activities or dealing with emergencies which result from an act of God; or
      3. for trip vehicles assigned to the traveler, on the evening of the work day immediately preceding the date of travel or the evening of the work day in which travel is completed.
   2. When the state-owned or leased motor vehicle is authorized to be used for travel to an employee's place of residence under paragraphs (1)(A) and (1)(B), the "reasonable distance" one-way between the employee's official work station and residence shall not exceed 10 miles unless the 10-mile limitation is specifically exempted by the secretary or the secretary's designee. For trip vehicles assigned to a traveler under paragraph (1)(C), "reasonable distance" shall be based on a determination that driving the vehicle home will not increase the total one-way trip mileage between the official work station and the destination by more than 10 miles.
2. All employees who have state vehicles assigned to them for one or more days and who park the vehicle overnight at their residence, are subject to the requirement for reporting of fringe benefit income under (1) the Annual Lease Valuation Rule, (2) the Commuting Valuation Rule ($1.50 per one-way trip), or (3) the Cents-Per-Mile Valuation Rule. See Appendix A. Vehicles excluded from the reporting requirement are denoted in Appendix D.
3. The value of the fringe benefit income derived from such use of state vehicles shall be determined by the agencies from work sheets and data supplied by the employees (Appendices B and C) and reported within the payroll system.

AGENCY RESPONSIBILITY

1. Agencies shall:
    
   1. Identify and notify those employees who use state vehicles and who park those vehicles overnight at their residence (commuting) or use such vehicles for other "personal use" (except for those exclusions enumerated in Appendix D) that such use of the vehicles is deemed to be fringe benefit income valued at one of the three methods set forth herein, resulting in a taxable event to the employee.
   2. Agencies shall determine and install a procedure similar to the attached accounting work sheet that will record the work days on which vehicles were parked overnight at the employee's residences and will report the calculated gross amount of such fringe benefit income for the pay period to the payroll system. The procedure will include as a minimum the data specified in the attached Statement of Personal Usage for State Provided Vehicles, Appendix B, including agency code, employee's name, social security number and vehicle license number.
2. The payroll system shall use reports or data provided by the agencies to:
    
   1. Record fringe benefit income chargeable to each affected employee listed.
   2. Calculate and withhold from each affected employee's pay the social security, Medicare and retirement contributions due.
   3. Calculate and withhold from each affected employee's pay the federal and state income tax due.
   4. Calculate the employer's share of social security, Medicare, retirement, unemployment compensation and workers compensation contributions due.
   5. Remit all withheld taxes and contributions to the appropriate authorities.
   6. Report on each affected employee's form W-2, the total fringe benefit income for the calendar year.

SAM:JJM:NR

Attachments: Appendix A "IRS Approved Methods of Reporting Fringe Benefit Income"; (pdf)
Appendix B "Statement of Personal Usage For State Provided Vehicles"; (pdf)
Appendix C "Daily Travel Log"; (pdf)
Appendix D "Vehicles Excluded From Fringe Benefit Income Reporting Requirements"  (pdf)

DATE:	March 24, 1998
SUBJECT:	New Organization for Org Dues Deductions
EFFECTIVE DATE:	April 17, 1998
CONTACT:	Janice Wolfley	(785) 296-3699
APPROVAL:
SUMMARY:	Organization Dues Deduction for ORG980

Please be advised of a new deduction code, 'ORG980', for organization dues for members of the Kansas Chapter of the International Association of Personnel in Employment Security (IAPES). The deduction will be $ 1.54 per bi-weekly period effective with the payroll period beginning March 22, 1998 and ending April 4, 1998 paid April 17, 1998. Agencies should send enrollment/termination cards to Vikki Muse at IAPES, 401Topeka Blvd., Topeka, Kansas 66603-3609.

The Division of Accounts and Reports, Payroll Services team will make the necessary updates to the SHARP system to effect these changes for all employees for whom SHARP calculates pay. Regents institutions are responsible for ensuring that these changes are reflected on all paychecks issued on or after April 17, 1998.

SAM:JJM:EB

DATE:	April 6, 1998
SUBJECT:	DA-40, Magnetic Tape/Dataset Voucher transmittal Form Regent Institutions Only
EFFECTIVE DATE:	Immediately
CONTACT:	Myrene Bears	(785) 296-5368
APPROVAL:
SUMMARY:	Changes to Transmittal Form

In order to facilitate SHARP/STARS reconciliation efforts for Regents Payroll, the attached DA- 40, Magnetic Tape/Dataset Voucher Transmittal form fields and definitions have been revised as follows.

• "Generation Dataset Number" replaces "Tape Label (if used)" Leave the field blank.
• "IN_Batch_Effective_Date: date to be processed" replaces "Month Charged to STARS" IN_Batch_Effective_Date is the same as shown on the header record of the STARS funding file: it will be the check issue date for the payroll cycle the transactions are being processed in per informational circular 98-P-005.

In addition, please submit two copies if the form is for payroll data.

Continue to submit the STARS document numbers used for clearing fund processing. If more than one document is used, an alternative to showing the range of document numbers would be to show the first five or six digits of the document number: example, S5015001 through S5015026 could be shown as S5015*** or S50150**.

SAM:JJM:MB

Attachment:DA-40 Magnetic Tape/Dataset Voucher Transmittal (pdf)

As part of the Department of Administration's commitment to provide better customer service, we have developed the following information guideline for locating missing paychecks. We continue to work closely with the U.S. Postmasters in Topeka, Kansas City and Lawrence to ascertain that the mail is being handled properly and to ensure that paychecks and advices are being distributed according to the U. S. Post Office standards for meeting customer needs.

The following steps should be followed by State Agencies Personnel/Payroll Offices when an employee reports that a paycheck has not been received on payday.

1. Verify that a paycheck has been created. This may be done by direct inquiry to SHARP in the Employee Data window under Paycheck, Paycheck Data panels or by using the KPAY002 Payroll Register. It should be noted whether payment is by an actual check or if a payroll advice has been issued for direct deposit. If a check or advice has not been created, agency personnel should first determine why and take further action as needed. If an advice has been issued, the employee should verify if a deposit has been made with their bank.

2. Verify the pay date on the check. This may be verified by on-line inquiry or the KPAY002. Issue dates could differ from expectations if the check was calculated in an off-cycle since check date is assigned by the system. Please see Informational Circular No. 98-P-005 and the revision Informational Circular No. 98-P-017 for calendar year 1998 dates. Based on the paycheck date, the mailing date may be ascertained. Paychecks are mailed one work day before the date on the check. Payroll advices are mailed two work days before the pay date. By mailing one work day before pay dates, employees should receive the paycheck on the date printed on the check. The mailing location should be noted, as some locations might require more than one day for delivery. The State of Kansas does not guarantee delivery of a paycheck on the pay date since delivery is under the jurisdiction of the U.S. Postal Service. Direct deposit should be encouraged for the most timely receipt of pay.
3. Verify the correct address information has been entered in SHARP. The Employee Payroll Data window specifies under PayrlData, Payroll Data panels whether a paycheck is delivered to the home or the mailing address. Both of these addresses are maintained in the Personnel Administration window under PersData, Personal Data, Personal Data 1 panels. The address information as of the final pay calculation determines where the check or advice is sent. Incorrect information could cause delay or lost checks and advices.
4. Agency personnel should contact the local Post Office. Such notification may assist in the locating of the missing check. However, it is difficult to track a single piece of mail which is uncertified.
5. An Agency may advance employees money due from their Agency Imprest Fund. This is the most expedient way for an employee to receive funds in the case of a missing paycheck. The agency is then responsible for collecting the money back from the employee after the paycheck is received. For further information regarding imprest funds, see the Division of Accounts and Reports Policy and Procedure Manual, filing no.10,802. Questions regarding establishing imprest funds or increasing fund balances should be directed to Bill Perry, Central Accounting Services at 785-296-7217.
6. Paycheck reprints can be requested for missing paychecks. If the reprint process has begun and the check is located, the employee will not be able to cash the check because a stop payment has been issued. Reprints are processed in off-cycles according to the payroll schedule. Do not use the reprint process in the case of an incorrect address. The reprint will have the same address as the original check. If a paycheck is lost because of an incorrect address, the original paycheck will need to be reversed and replaced with a supplemental after the address has been corrected in SHARP using the Personnel Administration window, PersData, Personal Data 1 panels. For further information regarding the reprint process, you may contact Joyce Dickerson in Payroll Services at 785-296-3979.
7. If sufficient delivery time has lapsed, usually two to three days, and all of the above steps have been taken, agency personnel should contact David Lord in Central Mail at 785- 296-3231 to report the non-receipt of paychecks. The cities and zip codes for the addresses of missing checks should be noted. Central Mail can use this information in contacting the U.S. Post Office representative in an attempt to locate the missing mail. Individuals should not be encouraged to call as it is more helpful for agency personnel to gather information in determining the scope of the problem area.

DATE:	June 15, 1998
SUBJECT:	Housing, Food Service and Other Employee Maintenance
EFFECTIVE DATE:	Immediately
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	Annual review of housing, food service and other employee maintenance rates required under K.S.A. 75-2961A and K.A.R. 1-19-9

Attached is a Form DA-171, Housing, Food Service and Other Maintenance Policy for your agency to complete. It is not necessary to return this form to the Division of Accounts and Reports. The completed form should be maintained at your agency. Any changes in rates will require entry into the SHARP system through Employee Payroll Data window, PayrlData menu, Additional Pay panel. Paper agencies should complete an Employee Data Sheet and submit it to the Division of Personnel Services for entry into SHARP.

Regents institutions should also complete the Form DA-171 and maintain the completed form at their agency. Regents are responsible for updating any rate changes into their payroll system.

SAM:JJM

Attachment: DA-171 (pdf)

DATE:	June 15, 1998
SUBJECT:	VTSA Company Changes
EFFECTIVE DATE:	Immediately
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	New Tax Sheltered Annuity Company Added and Name Change for Existing Company

The following company is authorized by the Kansas Board of Regents to write tax sheltered annuities effective immediately:

Lincoln Investment Planning, Inc.
The Forst Pavilion
218 Glenside Avenue
Wyncote, PA 19095-1595

Lincoln Investment Planning, Inc. is assigned company number '413'.

The Kansas Board of Regents has also been notified that North American Security Life Insurance Company, no. '830', merged with The Manufacturers Life Insurance Company and officially changed its name to The Manufacturers Life Insurance Company of North America (Manulife North America).

Payroll Services will make the necessary modifications to the SHARP system to reflect these VTSA company changes. Regents institutions are responsible for making the necessary modifications to their payroll systems for these changes.

SAM:JJM

DATE:	June 16, 1998
SUBJECT:	Addition of New Earnings Codes
EFFECTIVE DATE:	Payroll period beginning June 14, 1998
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	Addition of New Earnings Codes for FY99

Executive Directive 98-270 establishes a 5% retention incentive pay option for University of Kansas Medical Center (KUMC) Law Enforcement personnel. The earnings code will be displayed as follows:
 

In addition, Legislators will be eligible to receive a State Per Diem rate of $72.06 in fiscal year 1999. Legislators serving in the Legislature have the option to receive the new daily rate. Legislators who serve as board members for a state agency may also receive the increased rate. The following two earnings codes have been added to SHARP to reflect the increased rate:

Each of the above earnings codes is effective with the payroll period beginning June 14 and ending June 27 paid July 10, 1998. Earnings code 'RET' is established for use only by agency 683; earnings code 'LG5' should be used only by agency 428.

SAM:JJM:CJ

DATE:	June 17, 1998
SUBJECT:	Fiscal Year 1999 Payroll Contribution Rates
EFFECTIVE DATE:	Pay Period Beginning June 14, 1998
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	Fiscal Year 1999-Employee/Employer Matching Share of Payroll Contributions and Retirement Plans

The attached schedule is a listing of the percentage rates for employer payroll contributions and employee/employer retirement plan contribution rates for fiscal year 1999. The rates for fiscal year 1999 will become effective with the on-cycle payroll period beginning June 14, 1998 and ending June 27, 1998, paid July 10, 1998. The rates for OASDI, Medicare and federal withholding taxes remain unchanged for FY99. The revised state withholding tax rates effective with all paychecks issued on or after July 1, 1998 will be forthcoming as soon as the rates are released by the Kansas Department of Revenue.

Supplementals and earnings/deduction adjustments which are processed that effect payroll periods ending on or before June 13, 1998, will be processed using the benefit contribution rates effective for the payroll period being adjusted. Taxes for supplemental and earnings/deduction adjustments will be calculated using the tax rates effective for the paycheck issue date for the off-cycle payroll being processed. Benefit contributions include: KPERS, TIAA-CREF, KPEDCP, worker's compensation insurance, state leave payment reserve assessment, flexible spending accounts administrative fee, and group health insurance (GHI). Taxes include: OASDI, Medicare, federal withholding tax, state withholding tax, local withholding tax, and unemployment compensation insurance.

For example, the off-cycle payrolls for the pay period ending June 13, 1998, which will be processed on June 22 (KA1), June 24 (KA2), June 29 (KA3), and July 1 (KA4) will be processed using the fiscal year 1998 (or prior) benefit contribution rates since they will include only adjustments/supplementals effecting periods ending on or before June 13.

Supplemental and earnings/deduction adjustments processed in the KA1 and KA2 off-cycle payrolls for the period ending June 13, 1998, will be processed using the tax rates effective for fiscal year 1998 since the payments will be dated June 26 and June 29, 1998, respectively.. However, taxes for all supplementals/adjustments processed in the KA3 and KA4 off-cycle payrolls for the period ending June 13, 1998, will be processed using the tax rates effective for fiscal year 1999 since the payments will be dated on or after July 1, 1998.

As of July 1, 1998, NO payroll processing for GHI adjustments should be made for contract year 1996. Contact Judy Allman, telephone no. (785) 368-6338, in the Division of Personnel Services, about any event maintenance changes that may affect claims processing for contract year 1996.

Please note, with the exception of paycheck reversals (which always reverse expenditures in the fiscal year originally charged), supplementals/adjustments processed in the June 22 and June 24, 1998 off-cycle payrolls for the period ending June 13,1998 will effect FY98 expenditures while supplementals/adjustments processed in the June 29 off-cycle and all off-cycles thereafter will effect FY99 expenditures regardless of the payroll period being adjusted. This applies to Regents institutions as well as SHARP agencies.

Once the KA3 off-cycle for the period ending June 27, 1998 (scheduled to be generated on July 13, 1998) has been processed, no new or outstanding paycheck reversal requests will be approved for processing until STARS FY 1998 closing has been successfully completed. STARS is scheduled to be complete by July 27, 1998.

The julian date contained in document numbers for off-cycle payrolls will start over beginning with documents processed on July 15, 1998.

IMPORTANT REMINDERS!!

To help reduce the volume of adjustments, agencies are reminded of the following:

1. Paysheets for an on-cycle payroll are created on the Tuesday night following the end of the payroll period. Any changes to the employee's job data information (ie., pay grade, rate of pay, FLSA status, etc.) that are entered after the paysheets are created will not be reflected in the employee's on-cycle paycheck for the period and will require a paycheck adjustment. Entering job data changes timely (ie., prior to the creation of paysheets) will eliminate the need for a paycheck adjustment.
2. It is extremely important for agencies to review the payroll information after each preliminary pay calculation to ensure the accuracy of the gross-to-net payroll information, including employer contributions. The KPAY002 report can be used to review gross-to-net data. On-line agencies can review employer contributions by accessing the employee's paycheck deduction information for the period (employer contributions have a deduction class of 'N').

Regents' institutions are responsible for ensuring that the correct benefit and tax contribution rates are used when calculating payroll for employees of their agencies and for ensuring that the STARS funding file and DA175/176 effect the correct fiscal year expenditures. Regents institutions are also responsible for ensuring that all appropriate payroll clearing fund indexes are established in STARS for FY 99.

SAM:JJM:klb
Attachments: Schedule of Contribution Rates (pdf)

DATE:	June 19, 1998
SUBJECT:	New Tables for State Withholding Tax for 1998
EFFECTIVE DATE:	July 1, 1998
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	New State Withholding Tax Rates Effective for Paychecks Issued On or After July 1, 1998

The Kansas Department of Revenue has issued new percentage tables for computing the state withholding tax deductions effective for all paychecks issued on or after July 1, 1998. The standard deduction for one withholding allowance remains the same at $2000.00 per year in calendar year 1998.

The attached tables have been prepared for use in computing all state withholding tax payments for wages paid on or after July 1, 1998. When calculating federal and state withholding tax by annualizing, 26 pay periods should be used to arrive at an annualized amount.

There are no changes in the federal income tax withholding or earned income credit tables.

The Department of Administration will make all of the necessary changes in the computation of withholding taxes for SHARP agencies. Regents Institutions are responsible for implementing the new withholding tax rates in their respective payroll systems effective with all payroll warrants issued on or after July 1, 1998.

SAM:JJM:CW
Attachment: Schedule A (State Withholding Tax)

DATE:	June 25, 1998
SUBJECT:	CORRECTED Tables for State Withholding Tax for 1998
EFFECTIVE DATE:	July 1, 1998
CONTACT:	Payroll Services	(785) 296-3146
APPROVAL:
SUMMARY:	CORRECTED State Withholding Tax Rates Effective for Paychecks Issued On or After July 1, 1998

Corrected State Withholding Tax Rates effective for paychecks issued on or after July 1, 1998, are attached. Schedule A has been revised for married taxpayers.

The Kansas Department of Revenue has issued new percentage tables for computing the state withholding tax deductions effective for all paychecks issued on or after July 1, 1998. The standard deduction for one withholding allowance has increased to $2500.00 per year in calendar year 1998.

The attached tables have been prepared for use in computing all state withholding tax payments for wages paid on or after July 1, 1998. When calculating federal and state withholding tax by annualizing, 26 pay periods should be used to arrive at an annualized amount.

There are no changes in the federal income tax withholding or earned income credit tables.

The Department of Administration will make all of the necessary changes in the computation of withholding taxes for SHARP agencies. Regents Institutions are responsible for implementing the new withholding tax rates in their respective payroll systems effective with all payroll warrants issued on or after July 1, 1998.

SAM:JJM:CW
Attachment: Schedule A (State Withholding Tax) (pdf)