New out-of-state (OOS) payroll tax processing enhancements for HRMS to automate processing of payroll taxes for Oregon and Idaho are now available! All agencies that use HRMS for payroll and have employees living and/or working in Oregon or Idaho can begin using the new functionality on September 11, 2024 for the September 25, 2024 pay date.
What Has Changed
14 new tax types (12 for Oregon and 2 for Idaho)
New tax infotypes and changes to existing tax infotypes
New and revised reports
New and revised resources
Processors may notice that many infotypes and reports have slight changes to their functionality.
HRMS OOS Infotype Enhancements
The following infotypes have undergone updates to support OOS processing:
Add. Withh. Info. US (0234)
This infotype will now support records for Oregon (OR) and Idaho (ID) tax authorities. This may be necessary if an employee requires an Oregon or Idaho withholding override.
Other Taxes US (0235)
This infotype will now support records for Oregon (OR) and Idaho (ID) tax authorities. This may be necessary if an employee requires a manual exemption for an Oregon or Idaho tax type.
Residence Tax Area (0207)
This infotype will now support records for Oregon (OR) and Idaho (ID) tax areas. This will be necessary for Oregon or Idaho residents who are subject to state withholding tax.
Unemployment State (0209)
This infotype will now support records for Oregon (OR) and Idaho (ID) tax authorities. This will be necessary for employees whose work is localized to Oregon or Idaho.
Withholding Info W4/W5 US (0210)
This infotype will now support records for Oregon (OR) and Idaho (ID) tax authorities. This may be necessary for employees who submit an OR-W-4 Oregon Withholding Statement and Exemption Certificate or an ID W-4 Employee Withholding Allowance Certificate.
Work Tax Area (0208)
This infotype will now support records for Oregon (OR), City of Canby Ltd (OR06), Eugene-Springfield Ltd Auth. (OR02), Portland Tri-met Authority (OR01), Sandy Transit System (OR05), Wilsonville Transit District (OR04), and Idaho (ID) tax areas. This will be necessary for employees working in those locations and subject to work-based taxes.
CAT2/CAT3
CATs has a new Tax Area field that can be used to override the employee’s Work Tax Area. This may be necessary when the employee works in a different tax area for a portion of a pay period.
For a full list of user procedures that were updated, you may also view the Recently Updated section of the HRMS Support Hub.
HRMS OOS Report Enhancements
The following reports have undergone updates, or have been created, to support OOS processing:
Preemptive Basic Data Check Report (ZHR_RPTPYN06)
This report has been updated to include three new out-of-state infotype selections. New check boxes can be used to identify employees who have out-of-state tax areas or tax authorities entered on those three infotype records and the employee’s tax company is not set up to process out-of-state taxes. This would typically only occur upon transferring an OOS employee from an agency that was set up to process out-of-state taxes to an agency that is not set up to process out-of-state taxes.
Payroll Simulation (PC00_M10_CALC_SIMU)
A new redline has been added: Tax company XXXX with tax authority XX and tax type XXX does not exist! Please check View V_T5UTI. This new redline indicates out-of-state (OOS) employees are crossing different business areas, and the gaining agency is not configured to process OOS. Refer to Additional Steps for Out-of-State Employees – End Out-of-State Employee user procedure to ensure necessary infotypes have been ended or returned to Washington as appropriate. Send a ticket to HeretoHelp@ofm.wa.gov if one of your employees receives this redline and you need assistance clearing it. The Payroll Redline Guidance section within the Payroll Cutoff Errors page of the HRMS Support Hub has been updated to reflect this redline.
This is a new report that can be used to identify the tax area and tax authorities that may be applicable to an out-of-state employee based on where they are living and/or working.
This report works best when an employee’s Permanent residence (1) and Out-of-State Work Location (9) address records are up to date. Incorrect information, such as missing county or incorrect spelling, may result in inaccurate tax area or tax authority suggestions.
The City of Canby Ltd (OR06) is currently unavailable in this report and will not return as a suggested tax area or tax authority. This affects employees who work in the Canby Area Transit District. You can work directly with the City of Canby to verify if a specific address is within their district boundaries. This issue is being researched with SAP support.
Gap 7
Similar to the changes already made to the Payroll Posting Report, the GAP 7 has been updated with Tax Auth (Tax Authority Code) and Description (Tax Authority Title). To include these two fields into your GAP 7 reports, you will need to email HeretoHelp@ofm.wa.gov and request the new file layout. Please reference HRMS Release Notes – 11B (11/20/23) for further information.
Oregon Filing Report (ZHR_RPTPYN37) and Idaho Filing Report (ZHR_RPTPYN38)
These two new reports are available for the current payroll; however, they will not contain data until payroll results have been stored. These reports are continuing to be developed in preparation for the quarterly reporting.
Federal/State/Local EIN Report (ZHR_RPTPY061)
This report has been revised to display all employer ID numbers that have been assigned to tax companies in HRMS. Agency processors will not be able to update employee records unless their tax company is fully configured with all applicable employer identification numbers. Use this report to validate your agency’s tax company has all applicable EINs assigned.
HRMS OOS Helpful Tips
Employees will remain with existing tax configuration until agencies take action to update each employee’s tax infotypes.
HRMS is configured assuming that all Washington state agency employers will be reimbursing employers for Oregon and Idaho unemployment insurance. Meaning no taxes will be collected, but wages will be accumulated for reporting.
HRMS is configured assuming workers compensation is covered in the same state as unemployment insurance. If workers comp is covered in a different state, then manual processing may be required.
OFM strongly recommends that employees transfer between agencies on the 1st and the 16th of the month. Be very cautious when transferring OOS employees across different business areas mid-period. Out-of-state taxes process similarly to other items in HRMS where the costs for the pay period are rolled over to the gaining agency. Because of this, the employee will redline if the losing agency has OOS taxes turned on for their portion of the pay period and the gaining agency is not set up for OOS tax processing. Manual adjustments may be needed.
Training Opportunities
To help you prepare for these changes, we are offering a training session that will deep dive into the new OOS payroll tax functionality.
This session, and the one held on September 11, are being recorded and will be posted to the HRMS Support Hub. OFM strongly recommends attending a training session and reviewing new and updated resources prior to using the new functionality.
New and Updated OOS Resources
OFM has created and updated many resources to assist agency processors with the new out-of-state payroll tax functionality, including new and revised user procedures, report procedures, data definitions, and a coding guide. Here are a few important resources:
