Casual Pay Guide - Chapter 3 - Deductions, Taxes and Debts

Version 1.15

Chapter 3 provides guidance for how to work with the Payroll Operations Division (POD), including the Payroll Operations Branch (POB), to perform payroll tasks related to deductions, taxes and debts for Casuals.

 

Fire Center 
POD

Salary and salary related debts or Internal Debts for casual hires will be processed by the Payroll Operations Division (POD). for the Bureau of Land Management (BLM), Bureau of Indian Affairs (BIA), Fish and Wildlife Service (FWS), and the National Park Service (NPS). The Forest Service will be responsible for performing casual debt processing in their centralized payment office.

  1. IDENTIFICATION

    The process begins when an employee has “negative pay”. Negative pay is the result of a recalculation of a prior OF 288, which resulted in a negative amount. The negative pay will not affect an employee’s current pay and it will not have any impact on the employee’s year-to-date for the year.

    The Debt Management Branch (DMB) will review a daily file to identify any employees who had a recalculation to a prior OF 288 which resulted in negative pay during the daily run. The negative pay will produce a debt record in the Debt Management System. The Debt Management Branch will provide written notification to the employee and generate a debt record in the Federal Personnel/Payroll System (FPPS).

    FPPS will calculate the pay for any subsequent payments generated by an OF 288, but will suspend payment. FPPS will provide POD with a list of all suspended payments that occurred during the daily calculate.

    The user will identify suspended payments by comparing the number of Wage and Earnings Statements (WES) with the number of OF 288’s entered. If the number of WES’s is less than the number of OF 288’s entered, the user will contact POD if the employee does not receive additional WES’s after two working days.

  2. COLLECTION

    The agencies’ current collection procedure is to collect the entire debt the next time an OF 288 is processed, regardless of when that might occur. The deductions continue until the debt is fully collected. The agencies are consulting with the Office of the Solicitor concerning the legality of continuing this practice.

    The users have requested that POD continue this practice as an interim solution for approximately three months or until they have received a response from the Solicitor’s Office.

  3. RECOVERABLES

    Once the debt has been fully collected and repaid in the current year, either by check or by payroll deductions, the employee’s record will be adjusted to reflect repayment of the debt. This can only be done for current year repayments. POD will manually close the debt record at that time. The agency must supply a cost structure for the adjustment to reflect repayment. 

For additional information on internal debts see the Casual Pay Users Manual.

A Casual may develop a debt through third part sources, child support, alimony, bankruptcy, or a tax levy. The Casual Payment Center and POD work together to process the debt.

CASUAL PAYMENT CENTER:

Casual Payment Specialist (CPS)

  • Send garnishment documentation to Debt Management Branch (D2640).

PAYROLL OPERATIONS DIVISION:

Debt Management Branch (D2640)

  • Establish debt record in FPPS

A Casual may claim exempt status for Federal and state taxes. For additional information, go to the Casual Payroll Users Manual and the Processing Form W-4 Payroll Topic on this site.

CASUAL PAYMENT CENTER:

Casual Hire

  • Submit a W-4 form to the Casual Payment Center (CPC) for state and/or Federal exemption status. For Federal exemption status, submit a new W-4 form to the Casual Payment Center after the expiration date specified on the W-4 of each year.

Casual Payment Specialist (CPS)

PAYROLL OPERATIONS DIVISION:

Debt Management Branch (D2665)

  • If a refund is requested by the Casual the following must apply:
    • The Casual Payment Center (CPC) has notified POB (D2665), taking responsibility for failure to input a valid new W-4 after February 15 and before the processing of one payment, and

    • It is still within the same tax year, and
    • The Casual requests the refund in writing as soon as it is noticed to have the wrong tax status. If payment is made five times or more, a Federal tax deduction has been taken for most of the payments, and the Casual notifies the CPC at the end of the year, no refund will be given. The Casual must file a 1040 form with the IRS at the end of the year to receive a refund.
    • Input the W-4 into FPPS
    • If a refund is requested, forward request to POB (D2665)
    • Receive request from CPC for the Casual's refund.
    • Verify:
      • The Casual Payment Center (CPC) has notified POB (D2665), taking responsibility for failure to input a valid new W-4 after February 15 and before the processing of one payment, and
      • It is still within the same tax year, and
      • The Casual requests the refund in writing as soon as it is noticed to have the wrong tax status. If payment is made five times or more, a Federal tax deduction has been taken for most of the payments, and the Casual notifies the CPC at the end of the year, no refund will be given. The Casual must file a 1040 form with the IRS at the end of the year to receive a refund.
      • Process a One Time Adjustment to refund the withheld amount if within the same year.
  

Effective January 1, 1999, the Internal Revenue Service (IRS) requires that Federal and state income tax be withheld from Casuals (emergency fire fighter/casual/AD, any emergency hires under the AD pay plan) wages.

Taxes are withheld based on withholding information provided by the Casual. Withholding is done on biweekly wages (1-14 days worked) or monthly wages (15+ days worked). Salary is annualized and the IRS withholding formula is applied by FPPS. FPPS generates a Wage and Earnings Statement (WES) for each check issued. The WES includes current and year-to-date payroll and withholding information. The CPS mails the WES.

All Casuals will be provided the opportunity to complete Federal and state income tax withholding forms.

CASUAL PAYMENT CENTER:

Casual Hire

  • Ensure appropriate forms are completed and presented to the hiring unit.
    • Withholding Allowance Certificate (W-4). A W-4 should be filed to ensure the correct Federal income tax is withheld from the Casual's pay check. If the Casual does not file a W-4, Federal income tax will be withheld at a default tax rate that is based on single marital status with zero withholding allowances. This is the highest withholding rate.
      • Federal income tax withholding forms may be ordered from the IRS, obtained from the local IRS office and reproduced locally, or downloaded from the IRS website on the Internet at http://www.irs.gov/formspubs.
    • State Income Tax Withholding Forms. State income tax withholding forms are filed to ensure the correct state income tax is withheld from the Casual's pay check. State income tax will be withheld at the hired state unless otherwise stated in a Reciprocal agreement. Casuals may request income tax be withheld from a state other than where they were hired by filing the appropriate state income tax withholding form.
      • State income tax withholding forms can be obtained from the local state tax office or from the state website link found at the IRS website. The latest information on emergency worker income tax withholding can be found at the IBC Web page at Payroll Topics This website will contain general information regarding links to state tax information, ADO Contact Lists, withholding procedures, etc.
    • Tribal Exemption Forms. Each Tribal form is unique to its tribe and is completed by the casual for input into FPPS at the CPC. The exemption is manually removed at the same timing as the State Exemption removal performed annually by the CPC.
    • Can change withholding status at any time by submitting new withholding forms. These forms must be submitted timely to the CPS. Withholding status is not retroactive to previous earnings.

Hiring Unit

  • Provide each Casual multiple opportunities to complete appropriate Federal/state/tribal income tax forms prior to the fire season (ex: during pre-season training, physical fitness testing, or at the time of hire),
  • Ensure that forms are complete. Incomplete forms should be brought to the attention of the Casual.
  • Forward original Federal/state/tribal income tax withholdings forms to the CPC or Payment Team prior to payroll processing.
  • Do not advise Casuals about tax law, personal income tax liability or the number or kind of withholding exemptions he/she should claim.

Casual Payment Specialist (CPS)

  • Enter the Federal/state/tribal income tax withholding information into FPPS prior to payroll processing. Failure to complete this results in Federal and/or state withholding at the highest rate.
  • Maintain files of the original documentation.
 
 

When and where should a Casual file Federal/state/tribal income tax withholding forms?

A Casual can file Federal/state/tribal income tax withholding forms with the local hiring unit during preseason training, physical fitness testing, or at the time of hire. The local hiring unit establishes dates for preseason training and physical fitness testing.


What happens if the Casual does not file either Federal or state income tax withholding forms?

The Casual will not be penalized or prohibited from being hired as an emergency worker if he/she does not file these forms. However, the Casual is taxed at the highest (default) rate for both Federal and state income taxes. If the Casual's personal tax situation requires a different filing status than the “default” rate, the Casual should file the appropriate forms.


Can a Casual change their income tax withholding status?

Yes. Individuals may change their withholding status at any time during the calendar year. The new withholding status becomes effective when completed forms are received by the Casual Payment Center. Withholding status is not retroactive; the Casual will not receive reimbursement of income taxes previously withheld unless a qualified error has occurred (see ‘Filing Exempt Tax Status' above).


The state the Casual lives in does not have a state income tax. Does the Casual still need to file a state tax withholding form?

No. If the Casual lives in a state that does not have a state income tax, no form is required. The payroll system will default to the “hired at” state and no state income tax is withheld. The following states do not have a state income tax:

  • Alaska
  • Florida
  • Nevada
  • New Hampshire
  • South Dakota
  • Tennessee
  • Texas
  • Washington
  • Wyoming

Where can a Casual get more information or obtain forms?

Federal income tax withholding forms can be obtained from the local IRS office or from the IRS website on the Internet at http://www.irs.gov/formspubs/index.html. The Casual can obtain state income tax withholding forms at the local state tax office or from the state website link found at the IRS website. The Casual can obtain tribal exemption forms at the hiring unit or tribal office.


Does a Casual have to file new income tax forms each year?

If the Casual is claiming exempt status for federal taxes, a new W-4 form must be filled out each year.

State income tax laws vary. Refer to the appropriate state tax form, the local state tax office, or the Internet Web site address.


How are taxes withheld from a Casual's paycheck?

FPPS withholds taxes based on the information provided by the Casual on the W-4 and state income tax forms. If no form is filed, FPPS defaults to the hired state and deducts the highest rate.

FPPS computes taxes using the IRS formula on biweekly wages (1 – 14 days worked). The biweekly wages are computed as if they were annual earnings, and the appropriate tax is withheld.


How will the Casual know how much tax is withheld from their paycheck?

The Casual receives a Wage and Earnings Statement (WES) with each check. The WES includes current and year-to-date payroll and withholding information.


How can a Casual change Federal or state income tax withholding and reclaim exempt status for the following year?

The Casual needs to submit a new W-4 claiming exempt Federal status to the Casual Payment Center after the specified exemption expiration date.

The Casual needs to submit a new state/tribal tax form claiming exempt state status to the Casual Payment Center after the specified exemption expiration date.


What does a Casual do to claim EIC?

Advanced Earned Income Credit (EIC) is no longer claimed by individuals. The Casual would claim the EIC when they file their taxes.


How does a Casual report a voluntary tax allotment if it's not on their W2?

The voluntary tax allotments will not appear on a Casual's W2 and will only appear as a deduction on the leave and earnings statement. All reconciliations will be conducted between the taxing authority and the worker (IBC will not be involved). Please make sure to print your final Wage and Earning statement. You will need to report these amounts separately on your individual tax return as "estimated tax payments" and NOT withholdings. If you have additional questions please contact the Customer Service Center at 1-888-367-1622.


 

 

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