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Posts published in “Payroll”

FFCRA Sick & Family Leave is New and Improved

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The Families First Coronavirus Response Act (FFCRA) was the first COVID-19 Act passed by Congress on March 18, 2020. Back then, the belief was that COVID-19 would be a short-lived inconvenience where an employee may need to take a couple weeks off from work, and this Act was to allow them that benefit without cost to the employer. Here we are, a year later, still feeling the effects. The Consolidated Appropriations Act (CAA) 2021, passed on December 27, 2020, extended this federal paid leave until March 31, 2021, and we now find further extension and expansion in the recently-passed American…

Employee Retention Tax Credit – The Little Known Tax Benefit

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If your business was impacted by COVID-19, there is a significant amount of unclaimed money quite possibly waiting for you.  The amount is up to $33,000 PER EMPLOYEE.  But why have you not heard of this? Back when the CARES Act was signed by the President on March 27, 2020, COVID-19 was expected to be short-lived (remember the “15 Days to Slow the Spread” plan?) thus, the benefits were to provide short-term relief.  There were a few different major benefits in that Act, but a business was only able to select one.  This included the Paycheck Protection Program (PPP), the…

Consolidated Appropriations Act, 2021 – Business Benefits

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On December 27, 2020, President Trump signed the Consolidated Appropriations Act, 2021.  This is an Act that is signed each year, thus the 2021 suffix, and basically includes the federal government’s budget for 2021. It also includes a large section of COVID-19 related benefits for businesses. The following is a summary of what has passed.  It is a bit lengthy of a “summary,” but all good stuff. FFCRA Sick and Family Paid Leave The FFCRA tax credit has been extended through March 31, 2021, although the employer mandate has not been extended.  This means that an employer can decide whether or not…

Guide to the 2020 W-2 Form

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Over the next few weeks, as your employees start to receive their 2020 W-2 form, they will most likely have many questions as to what all those numbers mean.  For example, it is not uncommon for a salaried employee who earns $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 appears in Box 1. To assist you with questions like that, here is a handy guide…

Withholding Tax Rates Drop Drastically With New W-4 Form

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Almost three years ago, I wrote an article about the steady decline in the amount of federal income tax withheld from an employee’s check over the past three decades. This was prior to the new 2020 Form W-4 redesign, so I thought it would be interesting to revisit this chart and see its effect. As we saw three years ago, the amount of income tax withheld from an employee claiming Single with One allowance or Married with One allowance has steadily decreased, with the exception of 2009 where there was a sharp decrease that eventually returned to its pre-depression state…

2021 W-4 Form News You Can Use

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There has been no change to the 2021 W-4 Form from the recently re-designed 2020 version, other than the tax table, but there has been a bit of confusion. First off, the IRS encourages the use of the new form, but it is not required for 2021. Employees will find a more accurate withholding and, most likely, enjoy a higher net pay on every check if they do complete a new form. Payroll systems that utilize the new tax withholding table have recently been provided the ability to ‘bridge’ the 2019 and earlier form as if they were the the…

State Minimum Wage Increases 2021

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While the Federal minimum wage remains at $7.25 per hour, many states and cities/locals have set increases effective January 1st, 2021 with a few announcing a change during 2021.  With the addition of Florida, there are now 8 states on their way, or at $15.00 per hour.  A list of each state/local, along with the new hourly rate is listed below; All rates are effective January 1st, 2021 unless otherwise noted. Alaska: $10.34 Arizona: $12.15 ($9.15 for tipped employees-$3 less than minimum wage) Arkansas: $11.00 (tipped minimum wage will remain at $2.63) California: $14.00 for businesses with 26 or more…

Information Regarding Your Employees’ Rights for Time Off to Vote

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Do you know the laws on providing time off for your employees to vote? As we approach a major national election, you should review your policy to make sure you are in compliance with the law, as there can be civil and criminal penalties for violations. There is not a federal law on the books, so any time-off policy falls in the hands of the state in which the employee votes. Some states designate an amount of time while others will require paid time off, and just about all prevent you from firing or disciplining an employee for taking time…

State Income Tax Withholding Considerations

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Unless you live and work in one of the following nine states that do not tax wages, you are required to withhold state income tax on wages paid to your employees: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.  While this may sound simple enough, there are a number of considerations that need to be made, and we will go over them here, including the COVID-19 wrench in the machine. The Form First up is the form itself.  There are a few states that did not adopt their own state withholding tax form, so here is…

Employee Social Security Tax Deferral – an Employer Nightmare with More Questions than Answers

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On August 8, 2020, the President issued an Executive Order (EO) to allow an employee to elect to defer their Social Security tax payment, on wages earned from September 1, 2020 through December 31, 2020, to a later date. Rightfully so, the EO lacked details on implementation, which would be up to the U.S. Treasury to determine. Late Friday afternoon on August 28, 2020, the IRS published Notice 2020-65, and while the notice does provide details, it is still lacking rules and guidance on many points.  Most employers, since March 27, 2020, have had the ability to defer the deposit…