Refunding a Payroll Item

Owned by Former user (Deleted)
Last updated: Jun 11, 2024 by Andrea Boehm
14 min read

Refund a payroll item during a regular Payroll (Employee being paid during payroll)

1.   Go to Core/Payroll Item/Error Adjustment

   OR

                                             Employer Error Adjustment

2.   Click on , find the employee using a few characters of the Last Name, First Name  or Number.  

2a. Locate the Payroll Item you will be processing the refund for and click on

    - OR -

2b. Go to the Dashboard  and type in a few characters of Last name, First name or Number then click on employee from the list of names provided.

2c. Click on the Payroll Items tab.                                                                      

2d. Locate the Payroll Item you will be processing the refund for and click on .                                              

3.   Go to the Error Adjustments section and click on  .                                                                                               

4.   Add the refund Amount as a negative number, a Description and a Date (If you wish to process this refund at a later time, the date should be within the period beginning and ending date of a payroll being processed, not the Pay Date.  If you wish to process now leave date blank.)

In order for a refund to take place the Payroll Item Pay Cycle must be the Pay Cycle that is being processed on the Payroll. Example- Payroll Item Pay Cycle is set as Split Between First and Second Pay of the Month. The payroll being processed is the Third Pay of the month. This refund will not be processed during this pay because the Pay Cycle does not match and therefore the refund would not be processed until the next payroll processed for first or second pay of the month. 


5  Click on the  button.

                                                                                                                                                                             

6. If there is an Employer Error Adjustment involved, you will need to scroll to the Employer Error Adjustment section and click on

7. Add the refund Amount as a negative number, a Description and a Date (If you wish to process this refund at a later time, date should be within the period beginning and ending date of a payroll being processed not the Pay Date. If you wish to process now leave Date field blank.) 

8.  Click on the  button.

                                                                                                                         

    **If you want to delete the Employee or Employer Error Adjustment record, click the  button.

If there is an employer pickup involved ex-Medicare, check the box. This will update both Medicare Pickup and Medicare (employee amount paid by board) on the Employee's W2.


9.   Initialize your payroll.  On the Pay Report you will see the refund amount:

10.   Complete the Payroll processing.

Outstanding Payables

Once the refund is processed, the amount is placed in Processing>Process Outstanding Payables.  If the amount of the refund should not affect the payable total, (money was sent back to district, deposit into Payroll Clearance account), a Payables Adjustment should be posted.  To do so, go to the Payables Adjustments tab to create an offsetting entry.  Click Create, enter the Employee, the Payroll Item, the Employee Amount and/or Employer Amount, and a Description.  Click Save. If no check was sent my deduction company and need to short the current payables check, then no Payables Adjustment is needed. 

Refunding a Payroll Item in USPS-R Without Processing a Payroll-(Employee no longer being paid)

This process is normally used when an employee is no longer employed at the district, is not getting paid on the next payroll or if the district wishes to refund the payment to the employee immediately.

1.   Go to Core/ Payroll Item.

2.   Find the employee using the grid and type in a few characters of the Last Name, First Name or Number.  

2a. Locate the Payroll Item you will be processing the refund for and click on .     - OR -

2b. Go to the Dashboard  and type in a few characters of Last name, First name or Number then click on employee from the list of names provided.

2c. Click on the Payroll Items tab.                                                                      

2d. Locate the Payroll Item you will be processing the refund for and click on .                                              

3.   Go to the Error Adjustments section and click on .                                                                                               

4.   Add the refund Amount as a negative number, a Description and a Date (If you wish to process this refund at a later time, the date should be within the period beginning and ending date of a payroll being processed not the Pay Date.  If you wish to process now leave date blank.) and click on .

 

**If you want to delete the Employee or Employer Error Adjustment record, click the  button.


5. Go to Processing/Payroll Item Refund.

a. Find the employee using the grid and search by Last Name or Number.

b. Click on next to the appropriate record. 

c. Click   

d, For Check processing:                                                                                                                                                                                                                  

    • Choose the Payment Option (Check Payment)                                                                                      
    • Bank Account (Default Bank Account is defaulted or you can choose from the drop down)        
    • Starting Check Number will automatically default to the next available Payroll Check Number                           
    • Transaction Date is already defaulted to the current date. This can be changed if desired.                                                                                                                                                                
    • Choose the Output Format (XML-export file for printing or PDF)                                                                                                                                                        
    • Pay Plan (Choose from drop down)                                                                                                                                             
    • File Name is defaulted (PayrollItemRefundYYYY-MM_DD.xml) can be changed if desired.                                                                                                                                                                                        
    • Click 

6. Transfer the PayrollItemRefund.xml file to your desktop or a folder of your choosing to upload the file to your printing software to print out the check.

7. For ACH Processing:                                                                                                                                                                                             

    • Choose the Payment Option (ACH Electronic Payment)                                                                                                                                        
    • Transaction Date is already defaulted to the current date. This can be changed if desired           
    • Choose the ACH Source (Payroll ACH Transfer) from the drop down                                                                                                                                    
    • Pay Plan (Choose from drop down)                                                                                                                        
    • File Name is defaulted (ACH_BankName.txt) can be changed if desired                                                                      
    • Click      

8.Transfer the ACHSXXXXXXXX.txt file to your desktop or a folder of your choosing and upload the file to the bank’s website.     

To get a detail print out of the Refund of Payroll Item for this employee, go to Payments/Refund/Refund Payments, select the employee and click on

To see the Adjustments that were made for this refund, go to Core/Adjustments and search for the employee:

Outstanding Payables

Once the refund is processed, the amount is placed in Processing>Process Outstanding Payables.  If the amount of the refund should not affect the payable total, (money was sent back to district, deposit into Payroll Clearance account), a Payables Adjustment should be posted.  To do so, go to the Payables Adjustments tab to create an offsetting entry.  Click Create, enter the Employee, the Payroll Item, the Employee Amount and/or Employer Amount, and a Description.  Click Save. If no check was sent my deduction company and need to short the current payables check, then no Payables Adjustment is needed. 


Adjusting Employer Paid Amount Without Refund Processing

  1. To enter in the refunded employer amount without processing through a pay go to Core/Adjustments and click                                                                                                                                                                                      

2. Find the Employee, the Payroll Item from the drop down, the Type-Board Amount of payroll item from the drop down. Enter a Transaction Date or choose date from the calendar.

Enter the refund Amount as a negative figure. A Description can be added if desired.                                                                               

3.. Click 

**If a refund Adjustment for the board is not processed through a pay, you will need to manually update USAS as there is not a file that is created when processing using Adjustments.  This amount will not show in Employer Distribution.

**If there is employer pickup involved ex-Medicare, you may also need to add an Adjustment for Type- Board Pickup Amount of Payroll Item.  This will update both the Employee paid portion by the board and the Board's Pickup Amount of Payroll Item. 



Refund of a Prior Year Annuity and processing as current year wages

  • Deposit the refund check into the payroll account.

Payroll Item

  1. Enter the negative refund as an employee adjustment on the appropriate annuity record.
  2. Process the refund-either through payroll or as a payroll item refund.
  3. After the refund is processed, using Payables Adjustments reverse the negative amount to ensure the deduction company receives the total amount from the payroll (without the refund).       

Core>Adjustments to remove negative Payroll Item warning from W2

  1.  Remove negative from annuity accumulators (MTD,QTD,FYTD,YTD).  This will remove the negative amount from the accumulators on the payroll item and remove the Negative annuity warning on the employee's W2:
    1.  
  2. Increase the QTD & YTD Total Gross on the Federal, Ohio, OSDI, Medicare & City Tax Record (if they originally honored the annuity),
    1.    
    2. Here are the rules:  Identify how the city honors annuities by checking the appropriate box in the various Honor Annuities fields.  The city tax agency should be contacted when determining what type of annuities the city honors.  Based on this configuration, it honors Non-Wages 125, which is Payroll Item 526. Then NO adjustment is needed.
      2. If NO Annuity is honored, then an adjustment is needed:
  3. These adjustments will balance W2
  4. Run the W2 report & confirm there are no errors.
  5. Run Quarter Report, Totals Summary > QTD Total and YTD Total will be off by the Refund from Prior Year adjustments of $175.90 and show a message of *** CALCULATED ADJUSTED GROSS DIFFERENT THAN TOTAL ADJUSTED GROSS FROM FEDERAL RECORDS *** And Total Annuities increased by $175.90.  

Outstanding Payables

Once the refund is processed, the amount is placed in Processing>Process Outstanding Payables.  If the amount of the refund should not affect the payable total, (money was sent back to district, deposit into Payroll Clearance account), a Payables Adjustment should be posted.  To do so, go to the Payables Adjustments tab to create an offsetting entry.  Click Create, enter the Employee, the Payroll Item, the Employee Amount and/or Employer Amount, and a Description.  Click Save. If no check was sent my deduction company and need to short the current payables check, then no Payables Adjustment is needed. 

Refund of a Prior Year Annuity and processing as prior year wages

  • Deposit the refund check into the payroll account.

Payroll Item

  1. Enter the negative refund as an Employee Error Adjustment on the appropriate annuity record.
      1. If you want to delete the Employee or Employer Error Adjustment record, click the  button.
  2. Process the refund-either through payroll or as a payroll item refund.
    2. To get a detail printout of the Refund, go to Payments/Refund/Refund Payments>select employee and click 'Detail Report':
  3. Run W2 for the employee:
  4. To remove the negative from annuity accumulators (MTD,QTD,FYTD,YTD).  This will remove the negative amount from the accumulators on the payroll item and remove the Negative annuity warning on the employee's W2.  Then to remove the Prior Year Refund from the current year, use Core/Adjustments, add negative Total Gross, Applicable Gross, Amount Withheld and Board's Amount of payroll item withheld and/or Medicare Pickup, use Board's Pickup Amount of Payroll Item, to the Payroll Items that were affected by the refund. (Use the adjustments created for the Refund to back out the prior year refund amounts)
  5. Once the refund is processed, the amount is placed in Processing>Process Outstanding Payables.  If the amount of the refund should not affect the payable total, (money was sent back to district, deposit into Payroll Clearance account), a Payables Adjustment should be posted.  To do so, go to the Payables Adjustments tab to create an offsetting entry.  Click Create, enter the Employee, the Payroll Item, the Employee Amount and/or Employer Amount, and a Description.  Click Save. If no check was sent my deduction company and need to short the current payables check, then no Payables Adjustment is needed. 
  6. Submit correction to ODJFS- To file your amendment online, please visit the jfs.ohio.gov. You may enter values manually. To file by paper, use a Request to Amend the Quarterly Tax Return (JFS-20129)to correct wage items. A separate Request to Amend the Quarterly Tax Return (JFS-20129) must be submitted for each quarter being corrected. Each employee record you wish to amend must contain a social security number, employee name, the data to be amended as originally reported, the corrected data and a reason code.
  7. Submit to IRS a Statement of Corrected Income and Tax Amount (Form W-2c) and a Transmittal of Corrected Income and Tax Amount (Form W-3c).
  8. File a Statement to Correct Information (Form 941X)
  9. Refund will affect current year Earnings Register
  10. W2 will only show current year wages after adjustments and no errors.
  11. Quarter report will be in balance after adjustments with no errors.

Delete Payroll Item>Error Adjustments or Employer Error Adjustments

If any record displayed is not going to be processed for a refund, go directly to the employee's Payroll Item>Error Adjustment or Employer Error Adjustment and click delete and then .