OSPS News ~ Tax Adjustments for Quarter 1, 2026

[LOWRY Timothy * DAS]

Greetings Payroll Partners,

In January we communicated with you that OSPS will regularly be making quarterly tax adjustments to ensure accurate annual and quarterly tax reporting. These adjustments will apply to employees who had any change from wages earned (salary) to paid leave, which generates negative hours that need to be corrected as negative hours will not calculate the correct tax withholding amount for the quarter.  Workers Benefit Fund (WBF) is the most common tax adjustment due to changes made to time entry after R1.

Adjustments have been processed through off-cycle payments with zero gross and net payroll, posted at quarter-end, and will have no impact on the employees' pay. Each adjustment will include:

  *   A positive or negative entry for the tax correction.
  *   A corresponding balancing entry for state income tax (SIT).

Common Reasons for Tax Adjustments

  1.  Net Negative Pay: Statewide Transit Tax (STT) and WBF do not calculate on negative wages and require manual correction. Paid Leave Oregon adjusts only up to the quarter-to-date (QTD) withholding limit.
  2.  Retro Time Changes: Adjustments to WBF-eligible hours in prior periods can create negative hours in the current period, requiring correction to meet quarterly reporting requirements.
  3.  Reversals with Different Pay Dates: These must be moved to the correct quarter for accurate reporting and amendments.

This process will occur quarterly to ensure compliance and accurate reporting for all agencies, and the average tax adjustment is under $1.00. The list of employees impacted can be found on the Workday Drive here: Drive > Payroll Resources > Communications > Q1 2026 Tax Adjustments

If you have questions, please contact me at Timothy.Lowry at das.oregon.gov<mailto:Timothy.Lowry at das.oregon.gov>.

Thank you,

Tim

[cid:image001.png at 01DCCB67.F8183BC0]
Timothy M. Lowry (he, him)
Oregon Statewide Payroll Services Manager
971-718-4230
Oregon Department of Administrative Services<https://www.oregon.gov/das/Pages/index.aspx>


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