2002 Calendar Year Closing
Prior Year Cash Recovery
- 1) Agency receives a check or money order from the
employee for the net amount of their original check plus federal and state
tax deductions. The agency deposits these funds into their account.
- If you have outstanding recoveries that you are
collecting money on, the balance due is to be increased to add Federal &
State tax withheld.
- 2) Complete forms COP-9 and CO-1081 to begin the recovery
process. The COP-9 is to include the original gross pay, and the amount of
the FICA/Medicare and retirement deductions in their appropriate boxes on
line 1. If applicable, other deductions should be included in their
appropriate boxes. On the COP-9, the amount of the check is to include the
net plus federal and state taxes withheld.
- Form CO-1081 should reflect the total deductions being
reversed, excluding federal and state tax withheld.
- Forms COP-9 and CO-1081 are to be forwarded to the
Payroll Services Division with a copy of the agency's deposit slip showing
that the agency received the necessary amount required to process the
- 3) The Payroll Services Division will process the
reversal on the next payroll cycle. On that check date the agency will be
credited the appropriate deduction amounts.
- Payroll Services Division will also process the W-2c
adjusting the employee's taxable wage and FICA/Medicare deductions for the
appropriate tax year. The W-2c will be forwarded to the agency and should
then be forwarded to the employee. Payroll Services will report the
adjustments to the Federal and State Government.
- It is the employee's responsibility to file an amended
tax return with the IRS and the Department of Revenue Services, and if
appropriate, receive a refund of federal and/or state taxes.
- *The IRS and D.R.S. will not accept adjustments to an
employee's tax return after 3 years.
*If an agency submits a prior year cancellation that
includes federal and state deductions, Payroll Services will adjust the
COP-9 and CO-1081 to remove the deductions. The agency will be responsible
for getting this money back from the employee.
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