Non-tax Dependents Process

Imputed Income

Glossary of Terms:

• CPPS: Central Payroll Processing System
• HR: Human Resources
• PERA: Public Employees’ Retirement Association
• NTD: Non-tax dependents

CPPS Process

After determining which employees have non-tax dependents in the state benefit system, an agency’s HR/payroll unit will need to set up an additional line on the current job screen or a new job screen using earnings code NTD in CPPS. Generally, you should use the same Accounting Template or primary Accounting Template the employee is paid from. While the employee will not receive pay from the NTD earnings code, there will be an expense to the state due to the PERA and Medicare contributions required by this earnings code (NTD). The amount of NTD is determined by the employee’s health, dental, and vision insurances and number of non-tax dependents. Please refer to the Benefits Rate Sheet, for applicable fiscal year, for the amounts (located on the Central Payroll Unit website). 

If the employee is a biweekly employee, please set it up the same as below using half of the amount to be taxed. Please make sure to use the “P-pay period amount” in the “Rate Code” field and the “T-exception by time; listed” in the “Time Report Code”. If the employee is positive pay use a new Job Screen to process exception pay. Using this information, the amount will be added correctly to each biweekly payroll for the employee.

The start date should be the date that the non-tax dependent began as a non-tax dependent or the beginning of the plan year (July 1) and the stop date should be the end of the plan year (June 30). At the beginning of each plan year, the report will need to be run in the state benefit system to identify which employees need to be taxed for their non-tax dependent. This report should also be run on a monthly basis to see any changes.

If an employee is terminating, the stop date should be the end of the month in which they terminate. This amount should not be prorated like the salary amount should. If an employee is transferring between departments, the agency that deducts the benefits should tax the entire amount and not have it split between agencies. If the old agency is not deducting the benefits, the NTD earnings code should be stop-dated for the end of the month before the transfer date (e.g. 04/30/09 for a 05/11/09 transfer date).

In HRDW, the Job Listing Report can be run by earnings code NTD to verify that all employees are set up correctly and for the correct amount.

The Payroll Total Earnings should also be run to verify the correct amounts processed through payroll processing. This report should run monthly to verify the correct amounts were deducted and the correct employees were taxed.