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This document outlines what needs to be done to make a final payment for a deceased employee

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•  1. Enter Stop dates on all voluntary Payroll Items that should not be withheld. The Stop Date entered needs to be a date prior to the Pay Date that will be used for the employee's final pay.
•  2. Change the Federal Payroll Item Rate Type to Percent and set the Rate to equal 0.000. This prevents Federal tax from being withheld.  Adjustments to update the Total and Applicable Gross are addressed in Steps 12 and 13.
•  3. Enter Stop dates on the Ohio, and OSDI Tax Payroll Items.
•  4. Enter a Stop date for the City Payroll Item if they DO NOT tax the payment. Enter a date prior to the last Pay Date ran in Payroll.
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  5. If retirement should not be withheld, change the Retirement Code to “None” on the Position record.

•  6. Calculate amount due to employee for most recent payroll. i.e.. accrued wages (amount earned but not yet paid), unused vacation, etc.
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  7. Change First Name field on the Core/Employee record to "Estate of " and in the Last Name field enter in the “deceased employee’s name”.

  Tip
  You will want to check with your Legal or Tax adviser to be sure of the proper usage of name.

  
  

•  8. Determine whether the payment should be processed as a physical check or a direct deposit.  If the payment should be processed as a physical check and the employee's Pay Distribution is set to the Type of DIRDEP, or if the payment should be processed as a direct deposit and the employee's Pay Distribution is set to the Type of CHECK, choose from one of the following:  
  • • If the employee is currently receiving a direct deposit and need to process a physical check:
      • Go to Core>Pay Distributions - New and find the employee.  Click Edit.
      • Edit the existing DIRDEP record, enter a date in the Stop Date field.  The Stop Date should be a date prior to the pay date being processed.  Click Save.
      • Click Add Distribution.  Select CHECK as the Type, enter a Code, Percent in the Fixed or Percent field, and 100.00 in the Rate field.  Click Save.
    • If the employee is currently receiving a physical check and need to process a direct deposit:
      • Go to Core>Pay Distributions - New and find the employee.  Click Edit.
      • Edit the existing CHECK record, enter a date in the Stop Date field.  The Stop Date should be a date prior to the pay date being processed.  Click Save.
      • Click Add Distribution.  Select DIRDEP as the Type, enter a Code, Percent in the Fixed or Percent field, and 100.00 in the Rate field.  Click Save.
    • If the employee is being processed in a special pay by themselves and normally receive a direct deposit and a physical check is to be processed, when the 'Initialize New Payroll' option is selected the 'Ignore Direct Deposit' checkbox should be marked.  No additional changes are necessary.
•  9. Process the payroll.
•  10. After pay is complete, change Name fields on Core/Employee record back to original name.
•  11. In USAS-R, create a vendor payable to the 'Estate of' or the beneficiary of the deceased employee.
  • Go to Core>Vendors and click Create to create a vendor payable to the Estate of the deceased employee.
    •  Under 1099 Section, set the Type 1099 field to Other Income.  , select the Tax ID Type, and enter a Tax ID. This will create a 1099- MISC form.
    • Under Locations, create a location for the vendor by entering the Address details. 
    • Check both the PO and 1099 checkboxes so the vendor is marked as a 1099 vendor. 
  • Click on 'Save" to create the vendor.
  • Create a Venfor Vendor Adjustment.
    • View the Vendor.  Click on 'Vendor Adjustments'  and 'create'.

    • Enter a Date, Description and the Gross amount paid to the estate in the Amount field. If you withheld Retirement annuities were withhold from this payment and it was the annuitized type (590 or 591) then the 1099 should be issued for the Taxable/Applicable gross, not the Total gross.  Check Taxable Box checked.

    • Click Post.  

      
      

      Info
      The amount will appear in the FYTD & YTD Taxable and Total amount fields on the vendor. The 1099 extract amount type limit is set to $600.00.  If this amount type limit needs to be updated, go to Periodic/1099 Extracts/Amount Type Limit field.

      
      

•  12. Using Adjustments, enter an adjustment to reduce the total gross on the 001 Federal Payroll Item by the amount of the payment made to the estate. 
  • Click Create.
    • Employee - Type or use the drop down to locate the employee.
    • Payroll Item - Federal Tax, Code:  001
    • Type - Total Gross
    • Transaction Date - Enter a Transaction Date that is in the current Posting Period.  Using a date within the current posting period will reduce the YTD/QTD, and FYTD Total Gross.
    • Amount - Total gross amount paid to the estate.  Enter this amount as a negative value.  This amount is reported on the 1099.
    • Description - Can be used for auditing purposes.
    • To Date Options - Leave all checked. 
•  13. Using Adjustments, enter an adjustment to reduce the applicable gross on the 001 Federal Payroll Item by the amount of the payment made to the estate. 
  • Click Create.
    • Employee - Type or use the drop down to locate the employee.
    • Payroll Item - Federal Tax, Code:  001
    • Type - Applicable Gross
    • Transaction Date - Enter a Transaction Date that is in the current Posting Period.  Using a date within the current posting period will reduce the YTD/QTD, and FYTD Total Gross.
    • Amount - Total applicable gross amount paid to the estate. 
      • The applicable gross is calculated by taking the gross minus any annuities withheld on the last payment.  If no annuities were withheld on the last payment, the applicable gross will equal the gross. Enter this amount as a negative value.  This amount is reported on the 1099.
    • Description - Can be used for auditing purposes.
    • To Date Options - Leave all checked  

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