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USPS Calendar Year-End Close Manual
Reconciling Report 3011 and Report 527

Review Report 3011

Report 3011 will contain from three to six pages of information for each employee. Errors and discrepancies for each employee are found at the end of his or her section of the report. This employee discrepancy section will identify which databases are involved and the amount or field that is out of balance.

Common discrepancies identified on report 3011 and their causes are listed below:

Negative Fields

When an amount paid or deducted in a prior period is reversed or refunded, and the employee was not paid or the deduction was not taken in the current period, the accumulator for the particular pay or deduction will contain a negative value.

Since negative amounts cannot be reported on the W‑2 form, any negative year-to-date field that appears on the W‑2 must be corrected. These fields include gross pay, taxable earnings, taxes paid, deferred compensation amounts and dependent care reimbursement amounts. A complete list can be found in the W‑2 Process section of this manual.

An LOA may be submitted to zero out the negative field. Please include a screen print indicating the data correction and clearly explain the action that caused the negative balance.

Action is necessary only when the negative amount is in a year-to-date field that appears on the W‑2.

FIT Taxable Plus FIT Non-Taxable Does Not Equal Gross Pay

An adjustment to a non-taxable item may be reflected in the Gross Pay amount but not in FIT Non-Taxable. Use the employee pay history (HØHU2) screen to identify adjustments to pretax deductions.

Submit an LOA with a screen print of the HØATB screen to record the adjustment to the affected accumulator.

Month to Date Greater Than Year to Date

If a deduction taken in the prior year is refunded in the current year using the wrong YQ indicator, the correction may decrease only the year-to-date amount, resulting in an overstated month-to-date amount.

If the year-to-date amount is correct, no action is necessary.

FICA Taxes (OASDI and HI) Do Not Equal Correct Calculation Percentage for FICA Taxable

Overpayment

When a deduction is taken post-tax but should have been pretax, the adjustment moving the deduction from post-tax to pretax will reduce the employee’s FICA taxable wages. If the employee is not paid again during the year, the FICA taxes will not have been adjusted.

To refund the excess FICA withheld, make sure the employee is in status 01 or 03, active or terminated, and still payable on the HØBUS screen, then use the HUAU1 screen to pay the employee $0.01. This must be done before the file split.

Underpayment

An underpayment of FICA may occur when imputed income has been generated for the employee, creating a tax liability, but the employee has not been paid. This situation occurs when an employee on LWOP has selected Group Term Life Insurance over $50,000.

FICA may also be underwithheld when an employee has sufficiently large amounts of pretax deductions and there is not enough pay remaining to satisfy FICA withholding requirements.

Use report 3011 and the Employee Tax History I or Earnings History Tax I (HØHT1/HØNT1) screens to research these underpayments.

Example: The Report 3011 below shows an underpayment of FICA:

REPORT:   3011        UNIFORM STATEWIDE PAYROLL/PERSONNEL SYSTEM    PAGE:    14  
AGENCY:     999                   TEST AGENCY                 RUDATE:12/10/20CY 
                        EMPLOYEE COMPENSATION INFORMATION     RUN TIME:07:56:02 
EMPLOYEE NUMBER:    999XX000-1         DOE, JOHN O 
------------------------------------------------------------------ 
INSPECTION OF HØB, HØZ, AND H1Ø TABLES: 
 M-YTD-OASDI-TXBL(  4034.91)   TIMES OASDI-RATE  MINUS  YTD-THRD-PTY-TAX(  0.00) 
           NOT EQUAL TO M-YTD-OASDI       (         169.00) 
 M-YTD-HI-TXBL   (  4034.91)   TIMES HI-RATE      MINUS YTD-THRD-PTY-TAX(  0.00) 
           NOT EQUAL TO M-YTD-OASDI     (    58.00) 

Multiply the FICA Taxable amounts by .062 (OASDI) and .0145 (HI) to find the taxes due. The difference between FICA due and withheld is the amount to recover.

FICA Recovered From the Employee

Before the Calendar Year-End Split

Deposit the employee’s payment using:

  • T-code 188
  • PCA 99915
  • Comptroller object 3790
  • Appropriation 07738
  • Agency fund 9015

Use the USAS 57 screen, agency fund 9015, to confirm the deposit has been recorded before entering the HTMU1 screen.

Use the HTMU1 screen to enter a returned money transaction, as follows:

  • Enter the amount of the employee’s repayment in NET, and enter a minus sign (-) in the + field (adjustment indicator) on the 503 line.
  • Use reason code RM.
  • Enter the amounts of OASDI and HI recovered, and enter a plus sign (+) in the + field (adjustment indicator) on the 500 line.

Note: You must run a final regular or supplemental payroll with a payment date in CY to process this transaction and to generate a payment to IRS. Do not process the repayment on HTMU1 after the file split.

For more information on how to process returned money, see Chapter 11 “Cancellations & Reversals/Adjustments/Pending File Maintenance” of the USPS Process Guide.

After the Calendar Year-End Split

Deposit the employee’s payment in your agency’s funds, and enter a Doc Type 5 transaction in USAS to generate payment to the IRS for the employee and employer share of OASDI and HI tax.

Doc Type 5 Elements
  • Document type 5
  • Batch type 6
  • Transaction code 876
  • State’s share – object code 7043
  • Employee’s share – same object code used for the employee’s pay
  • Vendor number 13817984241 XØ1

Note: Submit an LOA to increase employee and agency OASDI, HI and employee FIT taxable amounts by the additional wage amount, and increase employee and agency OASDI and HI tax to include the amount remitted to the IRS. Include a screen print of the HØATC screen and the approved Doc Type 5 with the LOA. These transactions must be processed before W‑2s are generated.

FICA Not Recovered From the Employee

If you are unable to recover the underpayment from the employee, your agency is liable for the employee and employer FICA on both active and terminated employees.

When the agency pays an employee’s FICA, the tax paid on the employee’s behalf must be included in the employee’s taxable income, resulting in an increase in the tax liability for the employee and the agency. Use the following formula to calculate the amount of additional income to record:

Calculating Grossed-Up Pay

(FICA Taxable * Rates) – YTD OASDI/HI Tax = Original Underpayment
     Amount your agency is paying on employee’s behalf

FICA Tax Paid on Employee’s Behalf/.9235 = Additional Wage Amount
     Increase employee and agency OASDI/HI and FIT taxable by this amount (LOA)

Additional Wage Amount * Employer OASDI/HI Rates = Additional Employer Taxes
     Increase employer OASDI/HI taxes by this amount (LOA)

Additional Wage Amount * Employee OASDI/HI Rates = Additional Employee Taxes
     Increase employee OASDI/HI taxes by this amount (LOA)

Additional Employee Taxes + Original Underpayment = Employee OASDI/HI Due

Additional Employer Taxes = Employer OASDI/HI Due

Employee OASDI/HI Due + Employer OASDI/HI Due = Total OASDI/HI Due
     Pay IRS this amount (Doc Type 5)

You may issue a payment (Doc Type 5) to the IRS for employee and employer portions of FICA you are unable to recover.

Doc Type 5 Elements
  • Document type 5
  • Batch type 6
  • Transaction code 876
  • State’s share – object code 7043
  • Employee’s share – same object code used for the employee’s pay
  • Vendor number 13817984241 XØ1

Note: Submit an LOA to increase employee and agency OASDI, HI and employee FIT taxable amounts by the additional wage amount, and increase employee and agency OASDI and HI tax to include the amount remitted to the IRS. Include a screen print of the HØATC screen and the approved Doc Type 5 with the LOA. These transactions must be processed before W‑2s are generated.

Example: Agency pays employee FICA

Assume your agency will pay the employee’s under-withheld FICA taxes as reflected on the HØHT1 screen. The OASDI and HI TAX fields show unpaid tax of $2.16 and $.51, for a total underpayment of $2.67.

Type Description
Additional Wage Amount $2.67/.9235 = $2.89
Additional Taxes Due
OASDI
HI

$2.89 * .062 = $0.18
$2.89 * .0145 = $0.04
Original Underpayment $2.67
Employee FICA Due (Addt’l Tax + Original Underpmt) $2.89
Employer FICA Due $0.22
Amount Due IRS (Employee + Employer FICA) $2.89 + $0.22 = $3.11

To resolve the discrepancy in this example:

  • Process a Doc Type 5 to pay IRS $3.11, and
  • Submit an LOA to increase OASDI, HI and FIT taxable amounts by $2.89 (the additional wage amount), and increase agency and employee OASDI and HI tax to include the amount remitted to IRS.

Note: If an employee has been terminated on total disability, reverse all imputed income for the year; imputed income should not be reported on form W‑2 for these employees.

Researching Discrepancies Identified on Report 3011

To find the cause of employee master and tax file discrepancies, research both your agency’s internally maintained information and the screens listed in the table below. Internal files may include USPS reports and queries and exception files you have kept throughout the year with your own records of problems. The following situations may result in discrepancies:

  • Employees who transferred into your agency from other USPS or non-USPS agencies.
  • USPS/USAS manual payments or reversals/cancellations.
  • Employees who received deduction refunds or adjustments from a prior year, or any refund adjustments to a terminated employee.
  • Unusual payroll situations, such as entering an adjustment in the wrong period and then terminating the employee.
Information Type USPS Screen Accumulators
Pay Accumulators HØBPA YTD, QTD, MTD
Special Pay Accumulators H1ØSP YTD, MTD
Deduction Accumulators HØZUC YTD, MTD
Cumulative Tax Data HØBUT YTD
Cumulative FIT/SIT Data HØATB YTD, MTD, QTD, PQ
Cumulative FICA Data HØATC YTD, MTD, QTD, PQ
Payment History HØHHP
HØHU1
HØHU2
HØHU3
None
Taxable History HØNT1
HØHT1
None
Deduction History HØMDE None
Special Pay History HØMSP None

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