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<p class="MsoNormal">Greetings Payroll Partners, <o:p></o:p></p>
<p class="MsoNormal">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, <span style="font-family:"Segoe UI",sans-serif;color:black">
Old-Age, Survivors, and Disability Insurance</span> (OASDI), Paid Leave Oregon, Workers’ Benefit Fund (WBF), and Statewide Transit Tax (STT).
<o:p></o:p></p>
<p class="MsoNormal">Adjustments will be processed through off-cycle payments with zero gross and net payroll, posted at quarter-end, and will have
<u>no impact on the employees’ pay</u>. Each adjustment will include: <o:p></o:p></p>
<ul style="margin-top:0in" type="disc">
<li class="MsoNormal" style="mso-list:l1 level1 lfo3">A positive or negative entry for the tax correction.
<o:p></o:p></li><li class="MsoNormal" style="mso-list:l1 level1 lfo3">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. <o:p></o:p></li></ul>
<p class="MsoNormal"><b>Common Reasons for Tax Adjustments:</b> <o:p></o:p></p>
<ol style="margin-top:0in" start="1" type="1">
<li class="MsoNormal" style="mso-list:l0 level1 lfo6"><b>Net Negative Pay:</b> 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.
<o:p></o:p></li><li class="MsoNormal" style="mso-list:l0 level1 lfo6"><b>Retro Time Changes:</b> Adjustments to WBF-eligible hours in prior periods can create negative hours in the current period, requiring correction to meet quarterly reporting requirements.
<o:p></o:p></li><li class="MsoNormal" style="mso-list:l0 level1 lfo6"><b>Reversals with Different Pay Dates:</b> These must be moved to the correct quarter for accurate reporting and amendments.
<o:p></o:p></li><li class="MsoNormal" style="mso-list:l0 level1 lfo6"><b>Imputed Values Without Wages:</b> Taxes must still be captured.
<o:p></o:p></li><li class="MsoNormal" style="mso-list:l0 level1 lfo6"><b>Manual Negative Tax Entries:</b> Posted without corresponding wage corrections.
<o:p></o:p></li><li class="MsoNormal" style="mso-list:l0 level1 lfo6"><b>Manual Overrides:</b> Any entry that overrides calculated taxes.
<o:p></o:p></li><li class="MsoNormal" style="mso-list:l0 level1 lfo6"><b>Deceased Checks:</b> 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.
<o:p></o:p></li></ol>
<p class="MsoNormal">This process will occur quarterly to ensure compliance and accurate reporting for all agencies, and the average tax adjustment is under $1.00.<o:p></o:p></p>
<p class="MsoNormal">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 <b><a href="mailto:Timothy.Lowry@das.oregon.gov">Timothy.Lowry@das.oregon.gov</a>.
</b><o:p></o:p></p>
<p class="MsoNormal">Thank you,<o:p></o:p></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><b><o:p> </o:p></b></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><span style="font-family:Roboto">Tim
<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><span style="font-family:Roboto"><o:p> </o:p></span></p>
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Description automatically generated" v:shapes="Picture_x0020_1"><![endif]><b><span style="font-family:Roboto;mso-ligatures:none">Timothy
M. Lowry<o:p></o:p></span></b></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><span style="font-size:11.0pt;font-family:Roboto;color:#353535;mso-ligatures:none">Oregon Statewide Payroll Services Manager</span><span style="font-size:16.0pt;font-family:Roboto;color:#353535;mso-ligatures:none"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><span style="font-size:11.0pt;font-family:Roboto;mso-ligatures:none">Chief Financial Office | Office of the State Controller</span><span style="font-size:16.0pt;font-family:Roboto;mso-ligatures:none"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><span style="font-size:11.0pt;font-family:Roboto;mso-ligatures:none">971-718-4230<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:0in;margin-right:0in;margin-bottom:0in;margin-left:13.5pt;text-indent:-13.5pt;line-height:normal">
<span style="font-size:10.0pt;font-family:Roboto;mso-ligatures:none"><a href="https://www.oregon.gov/DAS/Financial/Payroll/Pages/index.aspx"><span style="color:blue">http://www.oregon.gov/DAS/Financial/Payroll</span></a></span><u><span style="font-size:10.0pt;color:blue"><o:p></o:p></span></u></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><i><span style="font-size:10.0pt;font-family:Roboto;mso-ligatures:none">Pronouns: he, him, his</span><o:p></o:p></i></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:14.0pt;line-height:115%;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
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