New HRM Tool Tip for Deductions on Health Benefit Records

Datatech’s HRM Software has just made it a little easier to check the deductions being calculated when a Health Benefit Record is added or edited. For those who want to see what calculation the software is making to come up with the amount it will deduct for the employee, a new Tool Tip will pop up when the “Amount” box (to the right of the “Employee Cost” field) is clicked with your mouse pointer. Once you have updated your software to version 7.73.0.437 (or newer), you can make use of this new feature.

To begin using the feature, first go to the Employee Entry window and select an employee number. Then click on the Health Benefits tab. You can click the New button to add a new record, or, if an entry already exists that you want to view or edit, highlight that record and click the edit button, or simply double-click that record.

Next click the “Select Plan” button and select (or re-select) the correct Medical Plan from your menu. The deduction amount recorded in your Medical Plan should automatically populate into the “Employee Cost” field. However, suppose your deduction amount is a weekly amount and the employee gets paid monthly or semimonthly? Or suppose the amount is a monthly amount and your employee is paid weekly? How do you know the exact amount the software will deduct from each check?

The new Tool Tip now shows you what calculations are being made and what the actual deduction amount on the pay check will be. Clicking your mouse pointer in the “Amount” box to the right of the “Employee Cost” field will popup the Tool Tip, showing you the basic deduction information. Now hold the Shift key and click the Save button. This saves the entry without closing the Record you have open. Clicking your mouse pointer again over the “Amount” box now shows you any conversion factors being applied as well as the final amount that will be deducted from of each paycheck. Note the screen shot below for an example of what you might see. In this example, the Pay Cycle is “S” for Semimonthly and the Medical Plan indicates the Employee Share is $20.00 per week. A conversion factor is therefore applied to multiply the weekly amount times 52 weeks to determine the annual amount, then divide the annual amount by 24 paychecks to reach the correct semimonthly amount of $43.33 per check.

ACA Correction Report Examples

Before reading this post, make sure you have read the previous post first:  Creating ACA Replacement and Correction Files.

The ACA Correction Report allows you to see what information will be included in a correction file.  Three separate sections are printed to show what information has changed on each part of the form.  In some cases, information may only change in one part of the form, while in others, information in all three parts might change.

Regardless of what information has changed, the entire form is reported in the correction file.  The program automatically references the original form that was reported by using the Receipt ID of the original file

The program looks for specific changes in each part of the 1095-C form.  For instance, in Part I, a change to an employee’s first, middle, or last name or the S.S. #, will result in a corrected 1095-C for that employee being included in the correction file if the IRS reported a TIN Validation Error for that form.  (Other changes to information on Part I of the form, such as your company information, will not trigger the form to be included in the correction file.)  Here is an except of some changes from the Part I section:

In this example, the original reported information for each employee is printed on the first line.  The second line shows the current (corrected) information.  Information that changed is printed in bold letters.  In this example, the middle name and last name have changed for the first employee; the last name has changed for the second employee; the middle name has changed for the third employee; and the first name has changed for the last employee.

 The next except shows changes that have been made to the codes reported on Part II:

For this section, the report lists the account number and the line # (14/15/16) for the information that has changed.    As with the part I section, codes for line 14/16 or amounts for line 15 that have changed since the original electronic file was generated will be printed in bold.  In this except, the first seven employee has one or more codes on line 16 that have changed.  The last employee has code that changed on both lines 14 and 16.

The final except is for corrections to Part III of the 1095-C:

Since there may be multiple individuals that are enrolled in coverage for Part III, the report will print the original individuals reported, draw a line across the page, then list the current Part III enrollee information.

For the Part III information, there may be changes to the individuals that are enrolled as well as the months that they were enrolled in coverage.  For instance, the first employee (19) listed no longer has the month of April checked for being enrolled in coverage.  Employee 148 originally reported only one enrolled individual; now there is a second enrolled individual listed on the form.  Employee 168 originally had two enrolled individuals; now there is only the employee listed as being enrolled.

As with the other two sections, when there are differences between the original and current information, a bold font is used.  So for instance on employee 246, the first two individuals have different months checked and are printed in bold.  But the last two enrollees do not have any differences between the original and current information, so they are not printed in bold.

Creating ACA Electronic Replacement and Correction Files

Many customers have been waiting to generate correction files.  The latest update to the Human Resources Management program includes this feature.  You can use the Tools->Check For Updates option to install the latest version of HRM (7.72.0.436.)  For your reference, we will provide an overview of both the Replacement and the Correction processes here, and  step-by-step instructions will be posted later on the Datatech Support/Training page on our Website.

The online help file for the HRM program has also been updated with detailed information on creating replacement and correction files, as well as printing corrected forms in cases where this is needed.

Last year we added an option to generate a replacement file.  The correction file is a new option.  To start with, this post will explain the purpose for each type of file and in what situations they should be used.

Time to File Your ACA Information Returns with the IRS

Now that the deadline for Paper Filing your ACA Information Returns (February 28, 2017) has come and gone, it is time to focus on making sure your Employee copies of the 1095-C forms have been furnished, either in person or postmarked, by Thursday, March 2, 2017.

And for those of you who must, or who have chosen to, file your returns electronically, you are in the final stretch of meeting your deadline to upload your files to IRS e-Services by March 31, 2017.

If you have missed the paper filing deadline, or if you haven’t already obtained your TCC from the IRS, you have the next 31 days to process your electronic submission. And since the IRS e-Services registration seems to still be an area of some confusion, we would like to remind you again that TWO responsible employees in your company must register for a user account on e-Services in order to properly process your ACA Application for TCC.

Also as a reminder, Datatech will NOT be filing any electronic information returns on behalf of our customers for 2016 reporting. We have been encouraging preparation for these deadlines in earnest since November 2016. We also have a much larger customer base using the HRM software this reporting year, and we do not have sufficient personnel to handle these kinds of requests. Additionally, the electronic file functions of your HRM Software are much better utilized if you process your own information returns.

For more information and step-by-step instructions to help you through the entire 1095-C and 1094-C process, please click on the Movie Clapboard icon in your Datatech programs to open our Support Videos training website. Once there, scroll down and click on the Annual Training link located underneath the Human Resource Management heading.

This opens the training page dedicated to the Webinar we held back in November 2016 regarding 1095-C and 1094-C Preparation. After the page opens, click on the large green button to Download a PDF of the Webinar pages. Note that there are seven sections to the training, including preparing TIN Validation Notices.

If you focus on sections two through six, and watch the associated videos for these sections, you should still be able to complete the process by the March 31, 2017 deadline. But the IRS e-Services Registration and subsequent ACA Application for TCC should be your first priorities, since these will take a few weeks to complete. After reviewing these training materials, please feel free to send specific questions to support@datatechag.com.

IRS Issues TCC Status Alert

As we know that this problem has already affected some of our customers, please be aware that the IRS has issued the alert shown below. You may use the following link to go directly to the IRS site.

https://content.govdelivery.com/accounts/USIRS/bulletins/18a392a 

UPLOADING ACA ELECTRONIC FILES

Some of our customers have reported issues with being able to find the IRS upload pages for either Test files or Production files. Here is a new link to open the IRS site where you can select which channel you want to use and then log in to upload your files, obtain your Receipt ID, and then check the status of your submission and (in the case of Production files) Download your Acknowledgement file.

After clicking on the link below an IRS web page will open. Scroll down on the far right-hand side under the header UI Channel Link, and then choose either the AIR UI Channel Login – AATS (Testing) for uploading Test files, or AIR UI Channel Login – Production for uploading your actual production files.

https://www.irs.gov/for-tax-pros/software-developers/information-returns/affordable-care-act-information-return-air-program 

Rest and recovery features added to Batch Check Entry

The Batch Payroll Check entry window now has some new features to support paying Rest and Recovery wages to employees.  Previously, you needed to use the Daily Payroll Entry window and perform all calculations for Rest and Recovery pay rates using the Daily Payroll features.  The new features added to the Batch Payroll Check entry allow customers that prefer to use this entry method to perform the same calculations.

In addition, we have added a new long-requested feature to the Batch Payroll Check entry window:  automatically calculating the break time due employees and adding the lines automatically to the payroll check.  (This feature will soon be added to the Daily Payroll Entry window as well, in case you are wondering.)

These features are available in the current release of the program.  Use the Tools->Check for Updates option to download and install the current release.

Adding Break Lines

The Add Break Line Items option allows you to enter the total time the employee worked without having to subtract out the break time when entering the hours and manaully entering the break time on separate lines.  To show how this works, here is a check that was entered where the employee worked on four separate days:

Based on the hours worked, the employee should have taken one break on the first day (23rd) and two breaks on the other days.

Clicking on the Breaks button at the bottom of the window will activate a popup menu with three options:

When you select the Add Break Line Items option, that is when the magic happens:

 

By entering the total time that the employee worked on each day, the program can consult a table that tells it how much break time the employee is due based on the hours worked.  (Of course you will need to set up that table yourself based on your company’s break policies–see below.)  Then it subtracts out the break time due to the employee from each of the days and creates a new line with the break time.  Day by day, here is what happens:

1/23/2017 – The employee worked 5 hours, and is due one break.  A break line is created for 10 minutes (.1667) using the BR wage type, and the 5 hours is changed to 4.8333.  (Remember that if an employee has any piecework wages in the pay period, all breaks must be paid at the average hourly pay rate according to AB 1513.  That is why the breaks time is subtracted from the hourly wages and paid separately for this day.)

1/24/2017 – The employee worked 10 hours earning piece wages, so the employee should have a total of two breaks.  The piecework hours amount is reduced from 10 to 9.6667, and a break line is added  for 20 minutes (.3333).

1/25/2017 – The employee worked a total of 9 hours earning piece wages at two different rates.  Again, 20 minutes of break time is due for the total hours worked.  The program takes the break time out of the line with most number of hours, so the line for 5 hours is reduced to 4.6667 and a break line is added for this day for 20 minutes (.3333).  The piecework line for four hours is not changed at all.

1/26/2017 – On this day, the employee didn’t make minimum wage.  Before the program can determine the employee’s average hourly pay rate, it must perform the minimum wage verification and add in any needed minimum wage adjustments.  That is why the MW line is added on this day for $22.67.  As on the other days, the break time while earning piecework wages is 20 minutes, and this is subtracted from the total of eight hours worked on this day.

How It Works

To create the break lines, the program needs to know two things:  how much break time should be paid to employees, and what the break line items should look like.

To set up the table defining how much break time employees should get, click on the Breaks button and select the Setup Break Time option.  The following window will appear:

If you issued Safe Harbor payments last year, this table will look similar to the break table definition used for the AB 1513 Safe Harbor Report.  It is a separate table however, so it will not have any entries by default.  You will need to set up the hours worked and break time amounts according to your companies break time policies.  For instance, if you give employees fifteen minute breaks, you would enter .25 and .50 instead of .1667 and .3333 as shown in the example above.

When creating the break lines, the program simply looks up how much time the employee worked in the Hours Worked column of the break table.  If the employees worked at least the number of hours that you entered in this column, then the employee is due the number of regular and overtime breaks entered in the 2nd and 3rd columns.

(Note:  At this time, the Doubletime Break Time is not implemented.  If you need to set up break times that should be paid at double time, contact Datatech customer support to let us know.)

The program also must know what a break line should look like.  This can include what wage type, job code, cost center and G/L # should be used on the break lines.  This is handled by a new Default checkbox on the Rest and Recovery/Non-Productive Time Definitions table:

This table lets you define what you Rest and Recovery line items look like in terms of the wage type, job code, cost center and G/L # used on the line item.  It has been used by the Daily Payroll options that update the pay rates for rest and recovery lines.  The Default checkbox needs to be checked on a single line to tell the program what template it should use to create the break lines.  If you have separate wage types for overtime or double time breaks, then you should check the Default box on the line to use for those breaks.

In our example, the break lines are simply set up to use the BR (regular breaks) or BP (overtime breaks, which was not used because there was no overtime).  Because this table does not specify a Job ID, Cost ID, or G/L # to use on break lines, when the break lines are create the same Job ID, Cost ID an G/L # entered on the original lines are used for the break lines.

The Default checkbox only applies to lines items that are set to Rest/Recovery.  It will not have any effect if you check it on a line that is set to Non-Productive time.

The example above is very simple, there are only two lines in the table.  In some cases though, customers have multiple Rest and Recovery entries in this table.  There may be different wage types or phases used for regular breaks vs. heat illness prevention breaks, or there may be other definitions set up for breaks for other reasons.  In those cases, having the Default checkbox allows you to tell the program what you want the breaks lines to look like when you have multiple entries.

Recalculating the Rest and Recovery Pay Rate

After adding the break lines, any further edits to the check line items may change the employee’s average hourly pay rate.  If this happens, click on the Breaks button again and select the Calculate R&R Pay Rate option.  The program will recalculate the employees average hourly rate and update the break lines accordingly.

Editing Hours After Adding Break Lines

If you change any hours on piecework or regular hour line items after you have created the break lines, just remember that you are not editing the total hours worked anymore.  Once the break lines have been created, the hours left on the line items will be the time spent working exclusive of breaks.

Suppose you discover an entry error where you entered 8.5 hours instead of 9.25 hours after you have created the break lines.  After a break line for twenty minutes has been created, you will have 8.1667 on the original line item.  Do not change this to 9.25 to correct your error!  Instead you will need to subtract the break time from the total time worked and enter that number.  Since 9.25 – .3333 = 8.9167, the line item should have 8.9167.

In some cases, editing the number of hours might change the amount of break time due to an employee.  If that happens, you can use the Add Break Line Items option again to recalculate the break time on the check.  The total time worked by the employee will remain the same, but the break time may be adjusted up or down depending on whether the hours were increased or decreased.

 

WARNING: IRS e-Services Phishing Scam

For those of you who are dealing with updating your IRS e-Services password/passphrase, be aware that the IRS has posted a warning on the e-Services login page about various emails that are circulating which ask you to update your e-Services information. The links that are provided in these emails appear to access e-Services, but are actually a phishing scam designed to capture your e-Services credentials.

If you receive such an email do not click on the links provided. To safely update your credentials you should navigate directly to the IRS website and follow its instructions. As a reminder, you can reach the e-Services site by navigating to www.irs.gov, clicking on the “for Tax Pros” tab in the upper right, then clicking the “Access e-Services”   button on the left, and finally clicking on the “Login or Register” button on the left.

Keep in mind that passwords/passphrases must be updated every 180 days.  Otherwise they will expire and the account will be disabled, possibly forcing you to repeat the registration process to regain access to your e-Services.

IRS Extends 1095-C Furnishing Requirements!

The IRS has released Notice 2016-70, which extends the due dates for furnishing 1095-C’s to employees. Use the link to see the entire Notice, but we have copied below the verbiage pertaining to this extension:

“Following consultation with stakeholders, the Department of the Treasury (Treasury) and the Service have determined that a substantial number of employers, insurers, and other providers of minimum essential coverage need additional time beyond the January 31, 2017, due date to gather and analyze the information and prepare the 2016 Forms 1095-B and 1095-C to be furnished to individuals. Accordingly, this notice extends by 30 days the due date for furnishing the 2016 Form 1095-B and the 2016 Form 1095-C, from January 31, 2017, to March 2, 2017. In view of this automatic extension, the provisions under Treas. Reg. §§ 1.6055-1(g)(4)(i)(B)(1) and 301.6056-1(g)(1)(ii)(A) allowing the Service to grant extensions of time of up to 30 days to furnish Forms 1095-B and 1095-C will not apply to the extended due date. Notwithstanding the extensions provided in this notice, employers and other coverage providers are encouraged to furnish 2016 statements as soon as they are able. Treasury and the Service have determined that there is no similar need for additional time for employers, insurers, and other providers of minimum essential coverage to file with the Service the 2016 Forms 1094-B, 1095-B, 1094-C, and 1095-C. Therefore, this notice does not extend the due date for filing with the Service the 2016 Forms 1094-B, 1095-B, 1094-C, or 1095-C, which remains February 28, 2017, if not filing electronically, or March 31, 2017, if filing electronically. However, this notice does not affect the provisions regarding automatic extensions of time for filing information returns, which remain available under the normal rules by submitting a Form 8809. See Treas. Reg. § 1.6081-1; Temp. Treas. Reg. § 1.6081-8T. It also does not affect the provisions regarding additional extensions of time to file. Id. Employers or other coverage providers that do not comply with the due dates for furnishing Forms 1095-B and 1095-C (as extended under the rules described above) or for filing Forms 1094-B, 1095-B, 1094-C, or 1095-C are subject to penalties under section 6722 or 6721 for failure to timely furnish and file, respectively. However, employers and other coverage providers that do not meet the relevant due dates should still furnish and file. The Service will take such furnishing and filing into consideration when determining whether to abate penalties for reasonable cause. The extension of the due date provided by this notice applies only to section 6055 and 6056 information statements for calendar year 2016 furnished in 2017 and does not require the submission of any request or other documentation to the Service. Because the 30-day extension of the due date to furnish granted in this notice applies automatically and is as generous as the permissive 30-day extensions of time to furnish 2016 information statements under sections 6055 and 6056 that have already been requested by some reporting entities in submissions to the Service, the Service will not formally respond to such requests. Because of the extension granted under this notice, some individual taxpayers may not receive a Form 1095-B or Form 1095-C by the time they are ready to file their 2016 tax return. Taxpayers may rely on other information received from their employer or other coverage provider for purposes of filing their returns, including determining eligibility for the premium tax credit under section 36B and confirming that they had minimum essential coverage for purposes of sections 36B and 5000A. Taxpayers do not need to wait to receive Forms 1095-B and 1095-C before filing their returns. Individuals need not send the information relied upon to the Service when filing their returns but should keep it with their tax records.”

Keep Your IRS e-Services Password Updated!

For those of you who have an IRS e-Services account, you will want to make sure that you keep your online password updated. The IRS recently informed one of our customers that if the password is not changed every 6 months, the site will require you to repeat the registration process in order to use your TCC to submit electronic files.

Since you don’t want to be caught in this scenario when the clock is ticking, it may be wise to log in and change your password now in anticipation of the 1095-C reporting in early 2017. You may also want to create a recurring calendar reminder so that you can continue to change the password every 5 months or so. This will ensure that you always have access to your e-Services account whenever you need to submit files or corrections. Thank you to former-employee-turned-client Brittany Hart for bringing this issue to our attention.