UPB - Repaying Payroll Overpayments – Guide for Employees

You are receiving this information because you have been overpaid on a previous payroll. Payroll overpayments must be repaid to the University of Illinois System. For tax purposes, it is in your best interest to make repayment in the same calendar year you were overpaid. Contact your unit if you have questions about the cause or circumstance of your overpayment.

Overpayment Repayment Guide

Reductions of pay for active employees

If you are actively employed with the U of I System, the overpayment amount will be recaptured from your paycheck earnings. An overpayment notification will be sent:

  • If the overpayment amount is 20% or greater than your normal earnings, the notification will give you a 2-week deadline before recapture begins. Recapture will generally occur over a two-month period unless the schedule crosses calendar years or other circumstances require altering the schedule.
  • If the overpayment is less than 20% of your normal earnings, UPB will recapture the overpayment on the next available pay.

Overpayment Notification

An overpayment notification from University Payroll & Benefits (UPB) will be sent to you detailing the type and amount of the overpayment:

  • Gross Overpayment Notification
    Gives the gross overpayment amount before taxes are taken out. This amount will be subtracted from your pay, automatically adjusting your tax withholding for that payment.
    NOTE: If you would like to request an alternate repayment arrangement, contact UPB Customer Service immediately. Do not write a check for the gross overpayment amount.
  • Net Overpayment Notification
    Gives the net overpayment amount adjusted for taxes.
    Net is used:
    • When you are no longer an active employee (not being paid)
    • When deductions require special processing
    • When the overpayment occurred in a previous calendar year
    • When you request to make repayment in the form of a personal check or money order.

If you are an active employee, the net overpayment amount will be deducted from your pay. Deductions will generally occur over a two-month period unless the schedule crosses calendar years or other circumstances require altering the schedule.
NOTE: If you would like to request an alternate repayment arrangement, contact UPB Customer Service immediately.

Overpayment Review

If you have questions about the circumstances of your overpayment, please contact your unit first. If you are unable to resolve the situation with your unit, you may contact UPB to request a review of your overpayment. When you request a review of the overpayment, a meeting will be set up within 30 days with you, your unit representative, and the Director of UPB (or designee) in order to seek resolution. Please contact UPB Customer Service to request a review.

Repayment by personal check or money order

Active employees wanting to repay with personal check or money order must contact UPB immediately to request a net overpayment amount.

Inactive or separated employees must make repayment with a personal check or money order. Please pay the net overpaid amount indicated on the Net Overpayment Notification.

Repayment agreement

In most cases, UPB schedules overpayments to be recaptured from your paycheck earnings over a two month period, unless the schedule crosses calendar years or other circumstances require altering the schedule. You may request a repayment agreement to modify the repayment schedule.

If you would like to request a repayment agreement, contact UPB Customer Service before the deadline on your notification. Repayment agreements will not be approved if the proposed schedule is unreasonable or results in repayments crossing calendar years.

Inactivity

Repayment inactivity over 90 days will result in the debt being sent to the University Bursar and ultimately to the Illinois State Comptroller (also called State Offset).

If your account is sent to the Illinois State Comptroller, any Illinois wages, tax refunds, lottery winnings, or other state payments will be intercepted by the comptroller and sent to the U of I System to satisfy the overpayment debt.

Tax Consequences

Payroll overpayments not returned to the university are considered taxable income. If repayment is made in the same year as the overpayment, your taxes will be adjusted so that your Form W-2 will accurately report wages and taxes withheld for the year.

If the repayment is made in a subsequent year:

  • State and federal income tax on Form W-2 cannot be changed. You will receive a tax letter identifying the amount and year repaid.
  • In some cases, Medicare and Social Security (if applicable) may result in issuance of a Form W-2C.

You may want to contact a tax professional and see IRS Publication 15 for more information on Wage Repayments.

Additional Notifications

  • An Overpayment Closed Notification will be sent to the employee and the unit upon satisfaction of the overpayment debt.
  • The current balance will be communicated to inactive or terminated employees periodically.

Contact UPB Customer Service through the University Payroll & Benefits Service Portal.



KeywordsOverpayment   Doc ID119770
OwnerDon S.GroupUI Training and Development Resources
Created2022-07-18 13:37:28Updated2024-02-15 14:02:38
SitesUniversity of Illinois Training and Development Resources
CleanURLhttps://answers.uillinois.edu/upb-repaying-payroll-overpayments-guide-for-employees
Feedback  1   0