1042 and NRA Processing Sunday, March 18, 2001 Track: HRMS Session: S2-6007

1. 1042 and NRA ProcessingSunday, March 18, 2001Track: HRMS Session: S2-6007

2. Panel Participants: • Karen Banning, University of Kansas • Dawna Groninger, University of Kansas • Jennifer Gehrt, Kansas State University • Linda Parker, Peoplesoft • Gary Singer, Windstar Technologies, Inc.

3. University of Kansas Overview • One of the 7 Regent Institutions governed by State of Kansas • Comply with reporting of earnings for non-resident alien earnings – using State earnings codes, tax panel information reporting • Must maintain own time reporting, leave accrual and balance information using existing time reporting system • State of Kansas produces the 1042-S forms for KU employees • PeopleSoft V7.6 HRSA – No fixes applied

4. NRA Issues • Student Administration & Foreign Addresses • When a student address is entered by SA as foreign – Job Earns Distribution populated automatically • Default foreign address to ‘Home Address’ and we must manually override to local address • 1042 Balances – Earns/Taxes • The appropriate effective dates must be entered in Tax Data panels in order for correct year to be updated. • Normally this is pay period begin date

5. Job Information – FICA Status Override

6. Available Earnings Codes for NRA’s

7. Job Earnings Distribution

8. Federal Tax Data 1

9. Federal Tax Data 2

10. Federal Tax Data 3

11. State Tax Data 1

12. State Tax Data 2

13. Local Tax Data

14. Time Reporting –Time Sheet

15. Employee Payline – with NR Earns Code – after first calc.

16. JPAY159 – NRA’s Taxed

17. JPAY163 – 1042 Gross Report

18. JPAY164 – NRA’s reaching treaty max in pay period

19. JPAY310 – Mismatch earns codes on multiple employee rec’ds

20. Kansas State University Overview • Fall 2000 Enrollment = 21,929 • Active Employees = 10,000+ • Non-Resident Aliens = 1009 • 1042 forms in 2000 = 504

21. Kansas State University Overview • Use delivered PS HRMS 7.51 Education & Government NRA functionality with all relevant PS fixes applied • Use 1042 processing for payroll only--not scholarships and fellowships • Do not have PS Student Administration • Follow same basic rules and processes as the University of Kansas

22. K-State’s Solutions to Problems with NRA Processes

23. Employee Tax Data • We do not automate Employee Tax Data on Installation Table-- we always manually enter data in Tax Data

25. Address in Personal Data • Train users to not insert foreign address in “Home Address” • Use local address in the “Home Address” • Use permanent foreign address in the “Mailing Address”, if desired

27. Address in Personal Data • Will receive warning message when tabbing out of Country field on Federal Tax Data 3 panel -- that’s okay

29. Visa/Permit Data • Tracking accurate Visa data is critical • Confusing panel for employee who has had more than one Visa type • Not effective-dated--Visa displays alphabetically, not employee’s current Visa • Tricky reporting • Fixed in PS 8?

32. NRA Data Integrity • Added a Save Error Edit to State Tax Data requiring “Resident” checkbox to be ‘No’

34. NRA Data Integrity • Employee Tax Audit Reports (SQRs) vs multiple on-line edits • Run audit reports beginning last day of pay period through day of final on-cycle pay calc

35. Job Earnings Distribution Audits • Fed Tax Special Status = NRA without NRA Earnings code in JOB_EARNS_DIST record • NRA Earnings Code without Fed Tax Special Withholding Status = NRA • Multiple active Employment Records and Earning Codes in each JOB_EARNS_DIST record are not equal • Dept ID in JOB is not equal to Dept ID in JOB_EARNS_DIST

36. Visa Audits • Employee with Visa Type = J2 and FICA Status = Exempt and enrolled in < 6 credit hours • Employee with Visa Type that requires Subject to FICA • Employee with Visa Type = J2 not eligible for Tax Treaty

37. Other NRA Audits • Fed Tax Data--NRA requires additional withholding = $15.30 • NRA with Citizenship Status = ‘Alien Permanent’ is Subject to FICA

38. Look out!! • Watch for custom SQRs that update JOB in batch--must also update the JOB_EARNS_DIST record at same time

39. FICA/SUT Audit Report • J1/F1 Visas should always be exempt from FICA and SUT (unless Substantial Presence Test is met) • When FICA Exempt, SUT must be Exempt • When FICA Subject, SUT must be Nonexempt

40. Tax Treaty Table • PeopleSoft re-delivers tax treaty table with each major release and with each application update • Interim changes must be tracked and applied in your system

41. Tax Treaty Information • Tax Treaty and NRA information available on our web site: http://www.ksu.edu/hr/infomgmt/treatysum.htm • IRS Tax Treaty Information is simplified to include Income Codes 18 and 19, only

42. Substantial Presence Test • We use manual worksheet to capture SPT calculations • Enter data from worksheet in PS SPT panel so data is readily available

44. Substantial Presence Test • Start Date = Arrival Date in USA • Expiration Date = On-campus Work Permit Expires

45. Substantial Presence Test • PS 7.51 needs Arrival Date and Visa Issue Date on SPT panel--possibly there in PS 8

46. PeopleSoft/Windstar Partnership: Background • Partnership formed in December 1999 • Objective: To complement PeopleSoft’s non-resident alien taxation processing capabilities with the case-by-case tax treaty analysis capabilities in Windstar’s Tax Navigator • Windstar is developing a two-way interface between PeopleSoft Payroll and Windstar Tax Navigator

47. PeopleSoft/Windstar Partnership: Overview Windstar Tax Navigator PeopleSoft Payroll Captures immigration history data Employee Data Captures employee data Tax Treaty Analysis Results Determines foreign national’s tax residency and performs tax treaty analyses Payroll Processing (including Tax Calculations based on Treaty Rules) Prepares withholding and tax treaty exemption forms Maintains Tax Balances (including 1042) 1042 Tax Balances Produces 1042-S reports Produces 1042-S reports

48. PeopleSoft Non-Resident Alien Taxation

49. PeopleSoft Non-Resident Alien Taxation

50. Before they enroll, you must get them here