FAQs

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  • Payroll

  • Payroll Overpayments

    • A payroll claim occurs when the employee receives an excess payment of compensation and repayment is necessary.

      It is the responsibility of the Payroll and Tax Compliance Office to make timely and accurate wage/salary payments to university employees based upon information provided by university departments and in accordance with applicable state and federal laws. When the information is not provided in a timely manner, the employee may receive an overpayment for the current payroll period and subsequent periods.

    • Departments: Majority of overpayments occur due to late PCRs or late time approvals. Departments should be aware of PCRs and payroll deadlines.  If an employee is on leave or terminated and is still receiving a paycheck, please contact the office of Payroll and Tax Compliance as soon as possible.

      Employees: We encourage employees to review their paystubs regularly to become familiar with their earnings, deductions, and pay schedule. The employees have access to review their earning statements by logging onto the SAP Portal.  Contact the office of Payroll and Tax Compliance if you have any questions.

    • The Payroll and Tax Compliance Office will send a written Payroll Overpayment Notice to the employee, or former employee, detailing the amount due to TXST. The employee can repay the payroll claim directly through a payroll deduction in accordance with the state regulations (only if actively employed), by personal check, ACH or Credit Card.

    • The payroll claim can be paid directly through a payroll deduction in accordance with the state regulations (only if actively employed), by personal check, ACH or Credit Card.

      Debit (ACH) or Credit Card 
      Payments by personal check or money order. 

      Make the payment out to Texas State University and mail it to:  TXST Payroll Office , 601 University Drive, San Marcos, TX  78666

    • A key principle in wage and tax reporting is the requirement that compensation is subject to employment tax and withholding in the year received. As a consequence, and with limited exceptions, wages are subject to federal income tax (FIT), federal income tax withholding (FITW), Social Security/Medicare (FICA) and federal unemployment insurance (FUTA) at the time wages are made available to employees without substantial limitation. (IRS Reg. §1.451-2(a).)

      This doctrine of constructive receipt applies without regard to whether the wages were earned at the time of payment. For instance, a wage advance or wage overpayment continues to be subject to employment tax and withholding in the year received despite any future obligation of repayment.

    • When an overpayment is paid back in the same year, the employee’s repayment will be reflected in his or her IRS Form W-2 Wage and Tax Statement. The Payroll and Tax Compliance office will reduce the employee’s taxable wages and associated taxes for that calendar year to ensure the year-end W-2 Form is correct.

    • Because of the strict rules provided by the Internal Revenue Service regarding how to handle the repayment of wages, individuals may not necessarily recover the additional tax liability from the previous year related to the overpayment. Therefore, it is imperative that employees ensure that their payments received are correct and any overpayments are paid back in the same year.

      If an overpayment is paid back in a subsequent year, the employee’s W-2 for the year of overpayment will not reflect their repayment. The wages paid in error in the prior year remain taxable to the employee for that year because the employee received and had use of those funds during that calendar year.  The employee should consult the IRS Publication 525 (Repayments) with respect to reporting the repayment of wages for a prior year.

      IRS rules for repayment of prior year wages allow for adjustments to Social Security and Medicare wages and taxes only. Once repaid, the Payroll and Tax Compliance office will issue a corrected W-2 Form (W-2c), reducing only applicable Social Security and Medicare wages.   Keep copy of your payments as receipt, as you may take a credit on your following year’s personal income tax return.

  • W-2

      1. Go to the Texas State home page ( www.txstate.edu ).
      2. Under  Online Services , click  SAP Portal.
      3. Enter your NetID (e.g., zzz99) and SAP  password
      4. Click  Log On
      5. Click the  SAP Employee Self-Service
      6. Scroll down and click on the W-2 link
      7. Scroll down to Online Forms W-2/W-2c
      8. Under Search Results for Online Forms W-2/W-2c, click on the box   Texas State University 2020 W-2 Wage and Tax Statement,
      9. Click on Display.  
      10. Your 2020 W-2 Form should now be displayed on the same screen or the following box may be displayed at the bottom of the screen,  Do you want to open the form from eccprd.sap.txstate.edu?  Click Open
      11. After viewing, close the screen by clicking on the X located at the upper right-hand corner.
      12. Click on Log Off to exit the SAP Portal

      1. Login:  SAP Portal with your ID and password then click on Log On.
      2. Click on the W-2s link.
      3. Click on Election for Online W-2 link.
      4. At the Election for Online W-2/W-2c, click on New Election.
      5. Click on Elect for Texas State University, should view Election period open, dates, Tax Company and the current status.
      6. Election Details is next.  Click on Receive W-2 Online.
      7. A Confirmation Box pops up on the screen, click OK to consent for your W-2 Online delivery.

      Once elected you will see at the top left corner of the screen that the data was saved successfully.

    • Active employees:  All active employees will have access to the electronic W-2 by login into SAP Portal.  If you did not elect to receive your W-2 electronically a copy of your W-2 will be mailed to the current Home Address in SAP.  To opt-out of a paper W-2, you must elect to receive your W-2 electronically. 

      Former employees: Your W-2 will be mailed to the address on file.  Before leaving TXST make sure you update your address in Employee Self-Service (ESS).  

      Due to security reasons, we will not e-mail a copy of the W-2 form.

    • All printed W-2 forms are postmarked by January 31st.  Please allow two weeks to receive the W-2 via the U.S. Postal Service. 

      No reprints will be provided to active employees that signed up for electronic W-2 because an identical W-2 reprint can be downloaded from the W-2 Access System. 

    • A corrected W-2 is not required for a change in address.  But please make sure you go into SAP Portal Employee Self-Service (ESS) and update your address for all future correspondence.

    • Your name and SSN must match the information on your Social Security Card.  Send a copy of your Social Security Card, the incorrect Form W-2 and a note requesting a W-2 correction form to the office of Payroll and Tax Compliance JCK-582.  

    • The W-2 reflects taxable earnings while the pay statements reflect total earnings. 

      • The W-2 Box 1 amount represent the federal taxable wages.  Federal taxable wages are Gross Earnings minus pre-tax deductions such as health/dental/vision, parking, TexFlex Flexible Spending Accounts and retirement deductions (403(b), 457).  These deductions are itemized in boxes 12,13 and 14 of the W-2.
      • The W-2 Box 3 amount represents taxable wages that are subject to Social Security taxes.  This differs from your Gross Earnings because there are certain deductions that reduce your Social Security taxable wages such as the pre-tax medical/dental and vision insurance, pre-tax parking deduction, TexFlex Flexible Spending Accounts.   Retirement and Tax Deferred Savings Plans do not reduce your Social Security taxable wages.  There is also a cap on Social Security taxable wages each year.  Employees who have earnings in excess of this cap will no longer have a deduction for Social Security tax for the reminder of that year. 
      • The W-2 Box 5 amount represents taxable wages that are subject to Medicare taxes.  This differs from your Gross Earnings because there are certain deductions that reduce your Medicare taxable wages such as the pre-tax medical/dental and vision insurance, pre-tax parking deduction, TexFlex Flexible Spending Accounts. Retirement and Tax Deferred Savings Plans do not reduce your Medicare taxable wages. Medicare Taxable Wages do not have a cap amount in the year.

    • Your W-2 does not reflect your fiscal year salary; it reflects taxable, calendar year wages. 

    • The explanations of these codes can be found on the reverse side of your printed W-2 form. 

    • Students of TXST who are enrolled on at least a half time schedule are exempt from Social Security and Medicare taxes.   Certain foreign nationals on specific visas are also exempt from these taxes. 

    • Nonresident aliens who both qualified for a treaty exemption and completed the necessary paperwork, may receive a Form 1042-S and/ or a Forms W-2 showing their treaty exempt earnings/ other wages and taxes. The Form 1042-S is required before you can complete your income tax return. Forms 1042-S are required to be delivered by March 15th. 

    • The Payroll Department does not handle Forms 1099. You need to contact Accounts Payable at (512) 245-2777.

    • The Payroll Department does not handle Forms 1098-T.   Please contact Student Business Services by sending an email to cashiers@txstate.edu for assistance. 

  • Tax Compliance

    • REU Participants

      • As a part of your REU experience, you will receive stipend payments and reimbursements from Texas State. In some cases, Texas State may also pay some of your travel expenses directly. It is important that you understand the possible tax implications associated with those payments and your obligation to report the amounts to the financial aid office at your home university.

        Texas State University is not required to report fellowship payments (such as your stipend) and travel reimbursements to the IRS, as long as services are not required as a condition of receiving payments.

        Specifically, Treasury Regulation 1.6041-3(n) excludes from reporting:

        Payments to individuals as scholarships or fellowship grants within the meaning of section 117(b)(1), whether or not "qualified scholarships" as described in section 117(b). This exception does not apply to any amount of a scholarship or fellowship grant that represents payment for services within the meaning of section 117(c). Instead, these amounts are required to be reported as wages on Form W-2.

        Furthermore, the instructions to IRS Form 1099-MISC read:

        Do not use Form 1099-MISC to report scholarship or fellowship grants. Scholarship or fellowship grants that are taxable to the recipient because they are paid for teaching, research, or other services as a condition for receiving the grant are considered wages and must be reported on Form W-2. Other scholarship for fellowship payments (to a degree OR NONDEGREE candidate) are not required to be reported by you to the IRS on any form. See Notice 87-31 1987-1 C.B. 475 and Regulation section 1.6041-3(n) for more information.

        Although the payments you receive will not be reported to the IRS by Texas State, the payments may be taxable under certain circumstances. It is important that you maintain your own tax records in order to prepare your annual federal income tax return.

        For specific tax questions, please consult with your tax professional as Texas State University is not authorized to provide individual tax advice.

        You may also find it helpful to read IRS Publication 970, Tax Benefits for Education, which is available at:  https://www.irs.gov/pub/irs-pdf/p970.pdf

        All other federal income tax forms and publications may be downloaded from the IRS web site at http://www.irs.gov.

      • Please be sure to inform the Financial Aid Office at your home university about the funds you are receiving through the REU program at Texas State. Under federal law, you are required to notify your Financial Aid Office of scholarship or fellowship payments that you receive to defray your educational costs. The payments received from Texas State may be taken into consideration when determining your financial aid eligibility at your home institution.

      • Please print letter provided on this link: REU Participants Tax & Financial Aid Considerations. 

    • Texas Sales & Hotel Tax Exemption

      • Any authorized agent or employee of Texas State University who is purchasing an item necessary to Texas State's exempt functions should complete all blank sections of the Exemption Certificate, sign it, and provide it to the Texas vendor to ensure the purchase is tax free. Please be specific as possible when completing the "Description" area of the certificate. A copy of the completed Exemption Certificate should be maintained in your records. 

        Upon any questioning during a State audit, responsibility for explaining the purchases will fall upon the individual whose signature is presented at the bottom of the certificate.

        In addition, please note the following: 

        • The Exemption Certificate can only be used for those purchases that further the mission of the University. It cannot be used for those purchases that will be used for the personal benefit of a private party or individual. For example, the Exemption Certificate may be completed and provided to the vendor for books purchased for addition to the Alkek Library. However, if an employee is purchasing a book for his/her personal collection, the Exemption Certificate must not be used. Please contact the Payroll and Tax Compliance if you are unsure whether the purchase is necessary to the University's exempt functions.  
        • The Exemption Certificate is only applicable to the exemption of Texas sales tax. If a purchase is made from an out-of-state vendor collecting that state's sales tax, contact the Payroll and Tax Compliance for a determination as to whether the purchase will be exempt from sales tax. States have differing requirements and statuses available, and a Texas Exemption Certificate should not be used without further clarification of Texas State's status in a particular state.  
        • Use of the Exemption Certificate for meals is restricted. The Exemption Certificate may be used for group working meals, University events, team meals, etc., but is not to be used for purchasing individual meals, even if the meal is purchased while on business travel. 
        • The Exemption Certificate cannot be used for the purchase, rental, or use of motor vehicles. 
        • Any authorized agent or University employee who is purchasing items for resale at a University event (such as food) must use the Texas Sales and Use Resale and Exemption Certificates.  The Sales & Use Tax Exemption Certification must not be used for such purchases; a resale certificate must be obtained. In addition, other tax issues may arise that must be addressed in such situations. 

         Contact the Payroll and Tax Compliance should you have questions or need clarification.

      • Texas Sales and Uset Tax Permit Number: 37547547549

        If a nonprofit organization has qualified for sales tax exemption with the Comptroller’s office, it can claim a sales tax exemption when it buys a taxable item by giving the seller a properly completed Form 01-339, Texas Sales and Use Tax Exemption Certification (exemption certificate).

        An authorized agent can buy items tax free by giving the seller a properly completed exemption certificate in the exempt nonprofit organization’s name. An “authorized agent” is a person designated by the exempt organization to buy items on its behalf.

        Sellers do not have to accept an exemption certificate. If a seller does not accept an exemption certificate, the exempt organization can ask the seller for a completed Assignment of Right to Refund (PDF) to request a refund directly from the Comptroller’s office.

      • If a nonprofit organization has qualified for hotel tax exemption with the Comptroller’s office, it must give the hotel a properly completed Form 12-302, Texas Hotel Occupancy Tax Exemption Certificate, and letter of hotel tax exemption from the Comptroller’s office at check-in. The exemption is only for the state hotel tax and not local hotel taxes. The Comptroller’s Tax-Exempt Entity Search lists nonprofits that are exempt from state hotel tax.

        An employee traveling on official business for the exempt organization qualifies for the exemption. A representative claiming an exemption who is not an employee of the exempt organization must pay the hotel directly with the organization’s funds, such as an organization check, credit card or direct billing, to qualify for the exemption.

    • Unrelated Business Income Taxes

      • Unrelated Business Income is an activity that is unrelated business if it meets three requirements:

        • It is a trade or business,
        • It is regularly carried on, and
        • It is not substantially related to the purpose of the exempt organization.

        If your department has any income that is not related to tuition and fees, please complete our Unrelated Business Income Tax Questionnaire or contact our Payroll and Tax Compliance office.

      • An activity is subject to UBIT if it meets the following criteria: (1) it is conducted as a trade or business, (2) is regularly carried on by the University AND (3) is not substantially related to the tax exempt purposes of the University. 

      • "Trade or business” generally includes any activity conducted for the production of income from selling goods or performing services. An activity must be conducted with intent to profit to constitute a trade or business.

        • Business conducted in a competitive manner is considered strong evidence of intent to profit.
        • Where an activity carried on for profit is an unrelated trade or business, the trade or business is not excluded merely because it does not result in profit.
        • Sustained, significant, and repeated losses generated by unrelated activities may not be considered trade or business for lack of profit motive.
        • If the University charges substantially below the cost of its goods or services, then the activity is not a trade or business, and the losses are not allowed to offset net UBI from profitable unrelated business activity.

      • Business activities are considered “regularly carried on” if they show frequency and continuity, and, are pursued in a manner similar to comparable commercial activities of nonexempt organizations.

        • An activity should not be considered regularly carried on if it is on a very infrequent or one-time basis.
        • Activities over a period of only a few weeks or days are not "regular" for the University if the same kind of activity is normally conducted by a nonexempt business on a year-round basis.
        • Year-round activities are regular even if they are conducted only one day a week.
        • Seasonal activities may be considered regularly carried on, even though they are conducted only for a short period each year.

      • A business activity is “not substantially related” to the University’s exempt tax purpose if it does not contribute importantly to accomplishing that purpose other than through the production of funds.

        To establish whether or not activities contribute importantly to the accomplishment of an exempt purpose*, the following principles apply. This list of determination factors is not exhaustive.

        • The size and extent of the activities must be considered in relation to the nature and extent of the exempt function that they intend to serve. If an activity is conducted on a scale larger than is reasonably necessary to perform an exempt purpose, it does not contribute importantly to the accomplishment of the exempt purpose. The part of the activity that is more than needed to accomplish the exempt purpose is an unrelated trade or business.
        • Dual use for both exempt and commercial purposes will not necessarily exempt the income derived from commercial use, unless the business activity contributes importantly to the accomplishment of exempt purposes.
        • Selling products of exempt functions.

        *Exempt Tax Purpose = the mission of the University: education, research and public service. 

      • Departments with activities determined to be UBI are responsible for providing the fiscal year’s UBI and associated expenses annually.

        UBI and associated expenses are to be submitted along with the department’s total income and expense. Supporting financial documentation may consist of SAP reports, worksheets and any other relative information.

        Direct costs that can be apportioned to UBI are deductible; those that cannot be apportioned directly may be reasonably allocated by the Payroll and Tax Compliance office as defined and accepted under IRS guidance.

        • Advertising
        • Contract Research
        • Sales of Merchandise
        • Licensing Agreements/Affinity Income
        • Investment Income

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