OSPS News ~ Quarterly Tax Adjustments

[FLORES Fabiola * DAS]

Greetings Payroll Partners,
Over the next couple of weeks OSPS will be making quarterly tax adjustments to ensure accurate annual and quarterly tax reporting for 2025. These adjustments will apply to employees whose taxable wages or hours do not align with the expected calculation (taxable wages/hours × applicable tax rate) for Medicare, Old-Age, Survivors, and Disability Insurance (OASDI), Paid Leave Oregon, Workers' Benefit Fund (WBF), and Statewide Transit Tax (STT).
Adjustments will be 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) or federal income tax (FIT). Federal Insurance Contributions Act (FICA) adjustments are rare, as FICA typically self-corrects based on year-to-date (YTD) wages.
Common Reasons for Tax Adjustments:

  1.  Net Negative Pay: 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.
  4.  Imputed Values Without Wages: Taxes must still be captured.
  5.  Manual Negative Tax Entries: Posted without corresponding wage corrections.
  6.  Manual Overrides: Any entry that overrides calculated taxes.
  7.  Deceased Checks: Negative wages for FIT, SIT, and STT tax due to pretax deductions require manual correction. Q1 will be zeroed out; Q2-Q4 adjustments will apply to prior periods.
This process will occur quarterly to ensure compliance and accurate reporting for all agencies, and the average tax adjustment is under $1.00.
Looking forward to 2026 and beyond, we will conduct this process three times per year, near the end of the second, third, and fourth quarters. In advance of these adjustments, we will notify the payroll community in case questions arise. If you have questions, please contact me at Timothy.Lowry at das.oregon.gov<mailto:Timothy.Lowry at das.oregon.gov>.
Thank you,

Tim

[A picture containing logo  Description automatically generated]Timothy M. Lowry
Oregon Statewide Payroll Services Manager
Chief Financial Office | Office of the State Controller
971-718-4230
http://www.oregon.gov/DAS/Financial/Payroll<https://www.oregon.gov/DAS/Financial/Payroll/Pages/index.aspx>
Pronouns: he, him, his



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