Kansas Department of Administration, Office of General Services
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Accounts and Reports

DATE:  December 30, 2010
SUBJECT: Submission of Prior Period Adjustments on Form DA-180
EFFECTIVE DATE:   January 1, 2011
A & R CONTACT: Joyce Dickerson   (785) 296-3979    Joyce.Dickerson@da.ks.gov)
APPROVAL: Kent E Olson

Submission of All Prior Period Adjustments on Form DA-180 Due to Social Security Tax Employee Rate Reduction for 2011

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 provides a two percentage point payroll tax cut for employees, reducing their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid for calendar year 2011.  The IRS has released Notice 1036 that contains this lower Social Security withholding rate and related information for implementing the change.

For SHARP agencies, any pay-affecting adjustment processed in 2011 to a check originally issued in 2010 will result in an unintended OASDI refund since the new rate will be applied to the entire gross amount of the original paycheck.  To avoid this unintended OASDI impact, all prior year SHARP pay-affecting adjustments requested in 2011 for checks issued in 2010 will need to be submitted for processing to the Division of Account and Reports, Payroll Processing Team on Form DA-180.  The ‘Attachment to DA-180’ should accompany the form.  Any pay-affecting adjustment entered for a check issued in 2010 will create an error in the off-cycle calculation.  Leave adjustments can continue to be made directly to the time sheet with no adverse effects.

Regent’s institutions are responsible for reviewing their adjustment processing to insure that prior year adjustments processed in 2011 do not generate an unintended OASDI adjustment for the entire OASDI gross based on the OASDI employee rate change.