Going paperless. Some do it to save the environment, some do it to save money, and some do it to save time. No matter what the reason, there are some things to consider when it comes to the payroll process and the payroll check. While the “check” itself becomes obsolete as many individuals go on direct deposit, it is always attached to a check stub, or as we call it, a pay statement, a detail of the employee’s wages, deductions withheld, taxes withheld, and sometimes other important information. According to the United States Department of Labor, the Fair Labor Standards Act…
Posts published in “Payroll”
Late last year, Congress passed what is titled the Protecting Americans from Tax Hikes (PATH) Act of 2015. This past week, the IRS issued Notice 2016-22 which provides guidance and Transition Relief for employers claiming the Work Opportunity Tax Credit (WOTC). If you are not familiar with the WOTC, it is a tax incentive for employers to hire and retain individuals from specific target groups. The groups include certain Veterans, Temporary Assistance for Needy Families (TANF) recipients, Food Stamp recipients, Supplemental Security Income (SSI) recipients, Vocational Rehabilitation (VR) Referred Individuals, Ex-Felons, Summer Youth employees, and effective January 1st, 2016, there is…
Reciprocal agreements relieve employees who work and live in different states from the double burden of paying taxes in both states, requiring payment only to their home state. If any of your employees are subject to reciprocal agreements, you can help them out by withholding income tax for their state of residency. How Reciprocal Agreements Work Many states that impose an income tax have entered into reciprocal agreements. For example, Kentucky has reciprocal agreements with Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia and Wisconsin. Residents of any of those states working in Kentucky are exempt from Kentucky income tax, and would pay and file income…
The Occupational Safety and Health Administration (OSHA) mandates that all employers who have more than ten employees are required to comply with the posting requirements of work related injuries. This posting is known as the OSHA 300 Log of Work-Related Injuries and Illnesses, and includes a summary of the previous year’s log of serious injiries. This information is important for employers, workers, and OSHA in evaluating the safety of a workplace, understanding industry hazards, and implementing worker protections to reduce and eliminate hazards. The due date for this posting is February 1st, 2016 for the year 2015, and it must…
Today, December 28th, 2015, the Internal Revenue Service issued Notice 2016-4, which extends the due dates for 2015 Information Reporting under I.R.C. sec 6055 and 6056, which includes the 1095-B and C forms and the 1095-B and C forms. This is great news for the many employers faced with the new filing requirements of these forms, and provides them with additional time to get their information together. The extended due date to issue the 1095-B or 1095-C forms to full-time employees has been extended from February 1st, 2016 to March 31st, 2016, as well as an extension of filing the forms to the…
This time of the year is a popular time to give gift cards to your employees as a way of showing appreciation, but you need to be sure it is reported as wages, and they pay tax on the value. Whether it is a $5 Starbucks card to a $50 gift card at a brand store, or even just a Visa gift card for $X amount, you need to include the full value of the gift in the employee’s taxable wages. The IRS considers gift cards as a cash equivalent, no matter what the value, and it does not fall under their…
On December 18, 2015, President Obama signed the Omnibus Spending Bill H.R. 2029 and the PATH Act (Protecting Americans from Tax Hikes Act of 2015) into law, which among other provisions, provides a five-year extension to the Work Opportunity Tax Credit (WOTC) program, as well as expands its scope of eligible groups. The WOTC is basically a tax incentive for employers to hire and retain individuals from specific target groups. The groups include certain Veterans, Temporary Assistance for Needy Families (TANF) recipients, Food Stamp recipients, Supplemental Security Income (SSI) recipients, Vocational Rehabilitation (VR) Referred Individuals, Ex-Felons, and Summer Youth employees.…
I have a client with a very interesting scenario in regards to Affordable Care Act (ACA) compliance and their desire to abide by the law. This client is defined as an Applicable Large Employer (ALE) by having greater than 50 Full-time Equivalent employees, therefore is bound by the Employer Shared Responsibility provisions under 4980H of the Internal Revenue Code. If they do not offer affordable health coverage to their full-time employees, they may be subject to a penalty of $2,000 per employee. In this case, the company, not wanting to be penalized, sought a health insurance agent to obtain a…
Under the provisions of the American Federal Unemployment Tax Act (FUTA), a Federal tax is levied on employers covered by the Unemployment Insurance program at a current rate of 6.0% on wages up to $7,000 a year paid to a worker. The law, however, provides a credit against federal tax liability of up to 5.4% to employers who pay state taxes timely under an approved state UI program. Accordingly, in states meeting the specified requirements, employers pay an effective Federal tax of 0.6%, or a maximum of $42 per covered worker, per year. The credit against the Federal tax may…
As 2015 is just starting to wind down, the government has already set many limits for 2016. In general, the limitations will not change as a result of the cost of living index not meeting the statutory thresholds that trigger a change. The Old-Age, Survivors, and Disability Insurance (OASDI), aka Social Security, wage limit remains unchanged at $118,500 and a tax rate of 6.20%. The last time the OASDI wage limit did not increase was between 2009 to 2011 where it remained at $106,800. Prior to 2009, the limit had always increased going all the way back to 1950. The deferral limits for your pension…