Agency Preparedness for Implementation of Oregon and Idaho Tax Automation
OFM is finalizing work on configuring the automation of Oregon and Idaho taxes in HRMS. To successfully apply these taxes to out-of-state employees, agencies will need to review the information below and complete any needed preparatory work for HRMS to successfully process taxes for employees living and/or working in Oregon and Idaho.
1. Review the Oregon and Idaho tax types that will be added to HRMS.
OFM is configuring 14 new tax types in HRMS (12 for Oregon and 2 for Idaho). Refer to the Tax Types Information for Agencies spreadsheet for more information.
Determine which Oregon or Idaho taxes apply to which employees. Ideally, agencies have already made these determinations and are manually collecting, paying, and reporting the correct taxes under the existing state tax wage types.
If you are not sure whether a particular tax type applies to a particular employee, then work with your legal counsel.
2. Register as an employer with Oregon and/or Idaho tax entities.
Each agency must work directly with any state or local tax entity for which they collect taxes in Oregon and Idaho to obtain a Tax ID number or Business ID number. This number is assigned by the state or local tax entity when you register as an employer and is unique to your agency.
The ID number must be provided to OFM to be configured into HRMS. This process must be completed or HRMS will not process the out-of-state taxes for your employees.
Many agencies may have already completed this process for Oregon and Idaho. Refer to the Existing Business ID Numbers spreadsheet to validate your agency’s Oregon and Idaho tax ID numbers already configured in HRMS.
3. Ensure OOS employee address information is current and correct.
For data integrity and tax processing purposes, it is important that data is entered correctly for the three Addresses (0006) Subtypes:
Permanent Residence
All employees must have an active Permanent residence record to process payroll.
Permanent residence records most commonly contain the employee’s physical address. Refer to each state’s definition of residence / resident for tax purposes.
Permanent residence records must use the 2-digit County Code. If the employee lives outside of the state of Washington, use county code 40 – Out of State.
Mailing Address
If an employee has a Mailing Address different from the Permanent Residence/physical address, the employee should have an active Mailing Address record.
If an employee has an active Mailing Address record, this is where the employee will receive mail related to payroll, retirement, or health benefits. If a mailing address is not present, mail will be sent to the Permanent Residence address.
Mailing address records must use the 2-digit County Code. If the employee lives outside of the state of Washington, use county code 40 – Out of State.
Out of State Work Location
If the employee works outside of the state of Washington, then they should have an Out of State Work Location record.
If an employee is working out of state at their permanent residence, then that address should be entered under both the Permanent residence (1) and Out of State Work Location (9) address types.
Out of country addresses can be used for this subtype.
If an out of state employee transfers to a different agency or separates from state service, Out of State Work Location records should be delimited.
• OFM recommends that you use USPS Address Lookup Tool to ensure all Addresses (0006) infotype records are entered correctly.
4. Stay Tuned for additional information.
The process to set up an employee’s taxes in HRMS is complex. More information will be communicated as we get closer to implementation. As part of this implementation, agencies can expect to:
Maintain new tax infotypes not currently maintained today.
Maintain existing tax infotypes in a slightly different way (for Oregon and Idaho taxes).
Have access to new reports to assist.
Have updated user procedures and report procedures to assist with the new processes.
Continue to manually meet Oregon and Idaho tax entities’ reporting requirements.
OFM is working to implement electronic payments to Oregon and Idaho. Information will be shared with agencies when completed. Electronic payments will only apply to state taxes; local transit district taxes will be processed through warrants.
OFM is working to update other resources on the OFM website and HRMS Support Hub related to out-of-state taxes.
