Form W-2, Wage and Tax Statement: Updates and Processing for Year End 2023

MEMORANDUM

DATE: November 9, 2023
TO: Federal Personnel and Payroll System User Group Representatives and Client Accounting Offices
FROM: Christine Zertuche-Rocha, Chief, Payroll Operations Division
SUBJECT: Action Required: Form W-2, Wage and Tax Statement: Updates and Processing for Year End 2023

As part of a combined effort to provide quality service to your employees, the Interior Business Center (IBC) wants to ensure that each employee’s pay record is accurate and complete prior to the close of the pay year 2023. The instructions for the Form W-2 will provide information related to some taxable and non-taxable income and/or fringe benefits for employees. Please use the additional information found in this memo to assist in supplementing that information.

To ensure proper processing for the current wage and tax year, all documents, that have not previously been submitted, should be provided as soon as possible, but no later than December 1, 2023. For tax purposes, income is reported in the year in which the payment is made. Reporting of taxable income may be accomplished by completing and forwarding the POD-27 Transmittal to Payroll Operations Division and applicable fillable forms outlined below by following the submission instructions outlined later in the memo.

As an alternative to completing the forms, please consider using the entitlement interface file. This eliminates the need for manual input of mass entries of certain taxable and fringe benefit pay codes to be loaded directly into FPPS. For more information on using the Entitlements Interface File IFIL0284, please use the following link under the title of ‘Reports’ on the IBC Customer Central Webpage: FPPS User Group Representatives (UGR). Please note: The only pay codes that can be used on the file are listed in the table below:

To assure an accurate Form W-2, please pay attention to the following areas:

1. Other Taxable Income- If not previously submitted, reporting of other taxable income may be accomplished by completing and forwarding the POD-16 Other Income Summary Sheet by following the submission instructions below. This type of income includes the following, but not limited to:

• All change of station allowances, including home marketing incentive payments.
• Indefinite travel payments.

2. Fringe Benefits – If not previously submitted, reporting of other fringe benefits income may be accomplished by completing and forwarding the POD-18 Report of Taxable Fringe Benefits, including a spreadsheet, by following the submission instructions outlined below. This type of income includes the following, but not limited to:

• Child Care Subsidy – Subsidy exceeding $5,000 is taxable.
• Fitness/Wellness – Employees reimbursed for a fitness program must report this as taxable  
• Qualified Transportation Benefits (including parking and transit) - Amounts reimbursed in excess of $300 per month are taxable.
• Transportation (taxable) – Use of government vehicles or leased vehicles for commuting or the use of limo services is considered taxable fringe benefits.
• Taxable non-monetary awards –
  • The “fair market” value of any significant non-monetary award presented to an employee as recognition must be included in the employee’s Form W-2 as taxable earnings.
  • Items that could be considered significant for this purpose would be pen-and-pencil sets, clocks, jackets, watches, gift certificates, tickets to events, or similar items.
  • Follow your agency policy regarding non-monetary awards that must be considered taxable earnings as fringe benefits.

3. Paid Bills for Collection – Repayment of Salary Debts for Former Employees– Submit a copy of any bill paid to your office covering salary overpayment, indicating “Salary Indebtedness Paid.” Please include the debt identification number, which was used when the debt was transferred, the date paid, and an authorized signature. For more information, refer to our user group communication dated August 31, 2023, with the subject: Repayment of 2023 Salary Debts for Former Employees | IBC Customer Central (doi.gov).

4. Undelivered Salary Checks – Salary checks that cannot be delivered to employees by December 31, 2023, should be submitted for cancellation and sent to the Review and Analysis Branch (RAB), D-2613, as soon as possible.

• Salary checks returned to RAB by December 8, 2023, can be processed as an adjustment in the pay period (PP) 2023-26.
• If received after December 8, 2023, this will require a manual year-end adjustment.
• Salary checks received after December 31, 2023, will require a Form W-2C, Corrected Wage and Tax Statement.

Please submit any current-year taxable corrections or adjustments listed above that occur in late November and December to your payroll processing section as quickly as possible. 

• Any adjustments that cannot be accomplished through the payroll processing cycle of December 16, 2023 (PP 2023-26), will require a manual year-end adjustment.
• Any adjustments received after December 29, 2023, will require a Form W-2C.

Submission Instructions for POD-27 and Associated POD-16 and/or POD-18

• Below are the acceptable ways to submit documents to your Payroll Processing Sections using one of the following options:
• For documents that contain Personally Identifiable Information (PII)
  • Secure Transport or
  • Secure fax transmission to
    • (303) 969-7272:
  • For documents submission(s) that do NOT contain PII, should be emailed to the Payroll Operations Branch POD_POB_WIP@ibc.doi.gov.

You may view and download additional information (including the fillable PDF documents for payroll clients) from the Client Interface Guide at: Payroll Manuals.

If there are any questions, please call the IBC Customer Support Center at 1 (866) 367-1272 or by email at Payroll_Helpdesk@ios.doi.gov.