Or. Admin. Code § 150-316-0359

Current through Register Vol. 63, No. 11, November 1, 2024

Section 150-316-0359 - Withholding: Annual Report by Employer

(1) Definitions. As used in this rule:

(a) "Employer" has the meaning given that term in ORS 316.162 and also includes lenders, sureties, and other persons subject to withholding and reporting requirements under ORS 316.169.

(b) "Payer" has the meaning given that term in ORS 316.189(1)(g).

(c) "Payroll service provider" is any person that prepares payroll tax returns on behalf of another person for remuneration.

(d) "Periodic payment" has the meaning given that term in ORS 316.189(1)(h).

(e) "W-2" means the federal Form W-2 required to be filed under 26 USC § 6051 with the addition of the information required under section (3) of this rule.

(f) "Wages" has the meaning given that term in ORS 316.162.

(2) W-2 reports.

(a) Every employer or other payer must complete an individual W-2 for each employee. The W-2 must contain the same information as is required to be reported on a federal W-2 including:

(A) Total state and local wages;

(B) State and local tax withheld during the calendar year; and

(C) The Oregon business identification number of the employer.

(b) The employer or other payer must use a federal W-2 for purposes of section (2) of this rule. If the employer or other payer is withholding from certain periodic payments, the employer or payer must use federal Form 1099-R for purposes of section (2) of this rule.

(c) The employer or other payer must provide a copy of the W-2 to the employee within 31 days of the close of the calendar year. If an employee is terminated and requests a copy of the W-2, the employer must provide the form to the employee within 30 days of either the request or the final wage payment, whichever is later.

(d) The information in the W-2 must be filed electronically with the department.

(e) Under ORS 314.385, the due date for electronic filing of W-2s for Oregon purposes is the same as the federal due date for electronically filed W-2s.

(3) Reporting for Statewide Transit Tax Withheld.

(a) Employers must report statewide transit tax withheld in Box 14 of the W-2 with the designation ORSTT W/H in addition to the requirements in subsection (2)(a) of this rule.

Example: ORSTT W/H - $15.00

(b) Subsection (3)(a) of this rule is effective for tax years beginning on or after January 1, 2019.

(4) Employer Reconciliation Reports (Form WR and Statewide Transit Tax Annual Report).

(a) Every employer must file a summary of total compensation paid, Oregon income tax withheld, and statewide transit tax withheld for each employee. Each reconciliation report must include a reconciliation of income tax and statewide transit tax remitted to the department by the employer for the calendar year to the total of income tax and statewide transit tax withheld from employees' pay for the calendar year.

(b) The reconciliation reports for income tax withholding and statewide transit tax must be filed electronically with the department.

(c) If the reconciliation reports for income tax withholding and statewide transit tax are not filed within 30 days of the department's notice to the employer of a failure to file, a $100 failure-to-file penalty applies for each instance.

(d) If there is a difference between the amount paid to the department by the employer and the amount withheld by the employer from the employees' wages, the employer must explain the difference on the report.

(e) The due date for each reconciliation report is the same as the due date of the corresponding federal report for income tax withholding. If the employer ceases doing business, each reconciliation report is due within 30 days of termination of business.

(f) Subsection (4)(b) is effective for tax years beginning on or after January 1, 2019 for income tax withholding and statewide transit tax reconciliation reports.

(5) Payer Reconciliation Reports.

(a) Every payer must file a summary of total periodic payments paid and Oregon income tax withheld for each payee. Each reconciliation report must include a reconciliation of income tax remitted to the department by the payer for the calendar year to the total of income tax withheld from payees' pay for the calendar year.

(b) The reconciliation report for income tax withholding must be filed electronically with the department.

(c) If the reconciliation reports for income tax withholding are not filed within 30 days of the department's notice to the payer of a failure to file, a $100 failure-to-file penalty applies for each instance.

(d) If there is a difference between the amount paid to the department by the payer and the amount of income tax withheld by the payer from the payees' periodic payments, the payer must explain the difference.

(e) The due date for each reconciliation report is the same as the due date of the corresponding federal report for income tax withholding. If the payer ceases doing business, each reconciliation report is due within 30 days of termination of business.

(f) Subsection (5)(b) is effective for tax years beginning on or after January 1, 2019 for income tax withholding reconciliation reports.

(6) Penalties. The department will assess penalties, as described in ORS 316.202(5), if an employer or other payer fails to file W-2s by the due date as required under subsection (2)(e) of this rule or the employer or other payer files incorrect or incomplete W-2s.

(a) A W-2 is incorrect or incomplete if one or more of the following occur:

(A) Identifying employee information is missing, such as the first or last name or social security number.

(B) The W-2 contains an incorrect statement of state income tax withheld, federal income, or state income amounts. Obvious math or clerical errors are not considered an incorrect statement for this purpose.

(C) Other information is missing or incorrect on the W-2.

(b) An employer or other payer knowingly fails to file a W-2 by the due date if:

(A)

(i) The W-2 was not received by the department on or before the due date of the corresponding federal Form W-2 for the tax year under consideration;

(ii) The employer or other payer has been assessed the penalty under ORS 316.202(5)(a) for one or more filing periods preceding the period at issue; and

(iii) The employer or other payer fails to file the W-2 upon written request to file by the department; or

(B) The department determines that the facts and circumstances in the particular case warrant penalty assessment.

(c) An employer or other payer knowingly files an incomplete, false, or misleading W-2 if one or more of the following occur:

(A) The employer or other payer has a pattern of repeatedly filing incorrect W-2s;

(B) The employer or other payer failed to correct the W-2 upon discovering incorrect information;

(C) The employer or other payer issued a corrected W-2 upon written request of the department;

(D) The amount of the potential penalty is less than the cost of complying with the requirement to include correct information on the W-2;

(E) The department determines that the facts and circumstances in the particular case warrant penalty assessment.

(d) A penalty may be assessed under ORS 316.202(5)(b) even though a prior penalty assessed under ORS 316.202(5)(a) was waived under OAR 150-305-0062.

(7) If the employer or other payer fails to produce documentation to support the information on the W-2 or the number of W-2s required to be filed, the department will use the best information available to determine the appropriate penalty assessment amount.

(8) The department may grant an exception to the filing requirements in sections (2), (4), or (5) of this rule upon a showing of undue hardship. Undue hardship is based on the facts and circumstances specific to each employer or payer and determined on a case-by-case basis.

Or. Admin. Code § 150-316-0359

1-69 as 150-316.202(2); 11-73; 12-74; 12-19-75, Renumbered; RD 10-1983, f. 12-20-83, cert. ef. 12-31-83; RD 10-1984, f. 12-5-84, cert. ef. 12-31-84; RD 13-1987, f. 12-18-87, cert. ef. 12-31-87; RD 7-1992, f. & cert. ef. 12-29-92; RD 5-1993, f. 12-30-93, cert. ef. 12-31-93, Renumbered from 150-316.202(2)-(B); RD 7-1994, f. 12-15-94, cert. ef. 12-30-94; REV 7-1999, f. 12-1-99, cert. ef. 12-31-99; REV 16-2008, f. 12-26-08, cert. ef. 1-1-09; REV 2-2014, f. & cert. ef. 7-31-14; Renumbered from 150-316.202(3), REV 63-2016, f. 8-15-16, cert. ef. 9/1/2016; REV 83-2016, f. 12-28-16, cert. ef. 1/1/2017; REV 3-2018, temporary amend filed 01/01/2018, effective 01/01/2018 through 06/29/2018; REV 78-2017, amend filed 12/28/2017, effective1/1/2018; REV 27-2018, amend filed 12/28/2018, effective 1/1/2019; REV 13-2019, amend filed 12/12/2019, effective 1/1/2020

Publications: Contact the Oregon Department of Revenue for information about how to obtain a copy of the publication referred to or incorporated by reference in this rule pursuant to ORS 183.360(2) and ORS 183.355(1)(b).

Statutory/Other Authority: ORS 305.100

Statutes/Other Implemented: ORS 316.202 & 320.550