If your business paid late-filing or late-payment penalties to the IRS during the COVID-19 pandemic, a landmark court case could mean a massive refund is heading your way. In late 2025, the U.S. Court of Federal Claims handed down a major victory for taxpayers in Kwong v. United States. The court ruled that the IRS improperly assessed billions of dollars in penalties and interest during the pandemic. Because of how this ruling impacts the statute of limitations, affected businesses and individuals have a strict window to act, with a major deadline looming on July 10, 2026. Here is what you…
Our recent webinar included the topic of what happens when a business reaches various employee levels. Fifty employees is one of those major thresholds where two major regulations kick in: the Affordable Care Act (ACA) and Applicable Large Employers (ALE), both at 50 full-time equivalent employees and the Family and Medical Leave Act (FMLA), at 50 or more employees for at least 20 weeks per year. This article will delve into the minefield of what FMLA compliance means and how it helps employees balance their work lives with serious family and medical situations. For an employer, FMLA compliance means granting…
An AARP study found that 47% of American workers in 2022 were employed by a business that does not offer any type of retirement plan. They also found that Americans are 15 times more likely to save for retirement when they have a workplace plan and 20 times, when the contributions are automatic. With such a low rate of employees saving for their retirement, many states are looking at closing that gap through state-facilitated programs and mandating employers in their state to offer a retirement plan. If you are an employer who does not have a retirement plan, such as…
Overtime is a comprehensive subject, covering everything from employee eligibility to the calculation of compensation. This article will focus specifically on states with laws that differ from the federal Fair Labor Standards Act (FLSA). For employees in states not listed below, overtime calculation generally follows the federal FLSA standard. Overtime is triggered when an employee works more than 40 hours in a continuous seven-day workweek, and the required premium pay rate is one and one-half times the employee’s regular rate of pay. It is important to remember that the FLSA provides certain exemptions, such as those for agricultural workers and…
Restaurants face special rules for payroll, wages and tips that set them apart from most other businesses. In few industries do customers directly help pay employee wages through tips. These rules come mainly from the federal Fair Labor Standards Act (FLSA) and state laws, and can lead to common compliance issues, if not handled carefully. Minimum wage – While the federal minimum wage is $7.25 per hour, for tipped employees who engage in an occupation in which they customarily and regularly receive more than $30 per month in tips, their minimum wage is only $2.13 per hour in direct wages,…
Immigration and Customs Enforcement (ICE) was created in 2003, as part of the newly formed Department of Homeland Security (DHS,) following the September 11 attacks. The agency combined the enforcement and investigative branches of two older agencies: Immigration and Naturalization Service (INS,) which handled immigration matters and the U.S. Customs Service, which focused on border and trade enforcement. The goal was to strengthen national security by bringing immigration and customs enforcement under one roof. Today, one of ICE’s key responsibilities is ensuring that employers follow federal rules on verifying work eligibility through I-9 audits and, when necessary, workplace enforcement actions.…
The Federal minimum wage has remained at $7.25 per hour since 2009, but 24 states and many cities, counties and locals have set increases effective January 1st, 2026, and a few effective during 2026. The state with the highest minimum wage is D.C. (yes, I know D.C. is not a state, but in any payroll system, D.C. is selected in the state field) at $17.95 an hour, and a number of cities within Washington state are well above $20.00 per hour. Back in the “old days” of 2012, we heard of the “Fight for $15.00” movement, and looking at the…
Over the next few weeks, as your employees start to receive their 2025 W-2 form, they will likely have questions as to what all those numbers mean. For example, it is not uncommon for a salaried employee who earns a salary of “$50,000” per year question why their Box 1 Wages only reflects $45,000. Did they get underpaid? Probably not. If the employee contributes to a pension plan (aka 401(k)) or has pre-tax insurance deductions, then those amounts reduces the “taxable” wage, which is what is represented in Box 1. Some employees may also wonder why their Federal Income Tax…
The IRS has recently published Guidance for Individual Taxpayers who received Qualified Tips or Qualified Overtime Compensation in 2025, Notice 2025-69, which provides direction and examples on how individuals will be able to calculate their Qualified Tips and Qualified Overtime and claim the deduction on their 2025 1040 tax return. Tax year 2025 is a transition year, due to the retroactive nature of its start and the inability of the IRS, Social Security Administration and payroll systems to implement the changes. The amounts arrived at, by the below methods, may not be 100% accurate, but it is acceptable for 2025, according…
As discussed in our earlier blog post here, the One Big Beautiful Bill Act (OBBBA) allows for a provision of “no tax” on tips and overtime. This has turned out to be a bit of a mess, as it pertains to 2025 reporting to the employees, due to insufficient time for the Social Security Administration and the IRS to make the changes to their forms to account for it. Not to mention many payroll systems were not prepared for this brand new retroactive reporting, especially as it pertains to qualified overtime. With that being said, 2025 will be treated as…