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Below are details on how to properly set up a Tax Deferred Payment (TDP) agreement in HRMN.
HRMN TDP set up
Deduction Code List
For a complete list of deduction codes please review the TDP Deduction Codes.
Setting Up a Master Deduction in HRMN
- Select "D" in the "Balance Type" field of the Employee Deduction PR14.1 screen to set up a descending balance. Each deduction reduces the balance owed and allows for the payments to stop once the balance has reached zero (0).
- Enter the correct agreement amount in the "Balance Amount" field. The agreement amount may be less than the amount of the total billing statement the member has received.
- Start the first payment in the same pay period as, or the next pay period after, the date you (HR) have signed the agreement. The Begin/Effective date is the first day of a pay period. If you deduct payments before you have signed the agreement you will have to refund those payments, and withhold taxes, to the member.
Calculating the TDP Descending Balance Amount
The new TDP agreement indicates the "total billing amount," not the actual amount for the service credit the employee is agreeing to purchase. Therefore, when setting up your Master Deduction PR14.1, you will need to review the member billing statement to verify the amount that should be entered into the "balance amount" field in HRMN.
The member is instructed to complete the lower portion of the billing statement and include it with the TDP agreement form before sending to the MI-HR Service Center. If the employee has not returned the billing statement along with the agreement, you will need to request it.
Calculate and verify the purchase amount to enter in the "balance amount" field by taking the following steps.
- Verify or enter on Line 2 of the billing statement the years the member agreed to purchase on the TDP agreement.
- Multiply Line 2 of the billing statement by the cost to purchase one year of service from Line 3 of the billing statement.
- Verify and enter this amount on Line 4 of the billing statement.
- Enter the amount from Line 4 of the billing statement in the "balance amount" field of the HRMN screen PR14.1.