Two New Award Wage Types Created, Two Discontinued - 04/12/11

The Tax Department has created two new award wage types to replace two that it has retired.

The new wage types are:
      1411 – Award Supplemental Rate
      1415 – Awards (Grossed Up) Supplemental Rate

The discontinued wage types are:
      1410 – Award Payment
      1414 – Award Payment Grossed Up  

The new award wage types will tax the employee at the federal supplemental rate of 25 percent, rather than the amount specified on the withholding tables. The change should reduce taxes for most recipients.

The Tax Department made the changes in response to department requests. The new wage types do not change departments’ decision-making process for determining which type to use for an employee. Departments can pick 1415 to pay taxes on the employee’s behalf, or 1411 for the employee to pay the taxes.

In addition, the Payroll Appointment Service Center (PASC) has updated its Employee Awards business process, accessible under the “People/Compensation” category on Business @ Purdue. The “Employee Awards” business process describes an option that departments with large numbers of employee awards to process can use to upload the payments. The upload process reduces the number of ADPAY forms to be completed in the departments and saves time with data entry in the PASC.

The Additional Pay Request Form (ADPAY Form) is being revised to remove the two discontinued wage types and add the new ones.

Questions about the award wage types may be referred to Linda Mundy of the Tax Department at 494-0521.