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November 22, 2011

California Announces 2012 UI, ETT, and EDI Rates

Filed under: News — Tags: , , , , — Vision @ 6:29 pm
Pam Harris, Chief Deputy Director, California EDD
Pam Harris, Chief Deputy Director, California EDD
The California Employment Development Department (EDD) recently released the 2012 UI, ETT, and SDI rates. An historical compilation of prior year rates is available in Form DE 3395.

2012 UI, ETT, and SDI Rates

The UI rate schedule in effect for 2012 is Schedule “F+.” This is Schedule F plus a 15% emergency surcharge, rounded to the nearest tenth. Schedule “F+” provides for UI contribution rates from 1.5% to 6.2%.

Exception for Employers Subject to §977(c)

Exception: Employers subject to §977(c) of the CUIC must pay at the highest rate provided by law plus an additional 2%.

Taxable Wage Limit Remains at $7,000

The taxable wage limit is $7,000 per employee.

The Voluntary UI program Is Not in Effect for 2012

The Employment Training Tax (ETT) rate for 2012 is 0.1%. The UI and ETT taxable wage limit remains at $7,000 per employee per calendar year.

SDI Rate Is Set at 1.0%

The State Disability Insurance (SDI) withholding rate for 2012 is 1.0%. The taxable wage limit is $95,585 for each employee per calendar year. The maximum to withhold for each employee is $955.85.

Notices Will Be Mailed December 30

UI, ETT, and SDI tax rates are combined on a single rate notice, Notice of Contribution Rates and Statement of UI Reserve Account (DE 2088). The DE 2088 will be mailed in December, with a mailing date of December 30. Employers will have 60 days from the December 30 mailing date to protest any item on the DE 2088 except SDI and ETT, which are specifically set by law.

New Employer Rate Set at 3.4%

For new employers, the UI tax rate is 3.4% for up to three years. Owners that purchased an established business have the option of acquiring the previous owner’s UI tax rate.

Find Out the Wage Base for All States by Visiting the Vision Payroll Unemployment Taxable Wage Base Page

Contact Vision Payroll if you have any questions on the California unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

November 20, 2011

California Releases California Employer’s Guide 2012 (DE 44)

Pam Harris, Chief Deputy Director, California EDD
Pam Harris, Chief Deputy Director, California EDD
The California Employment Development Department (EDD) has announced the release of the California Employer’s Guide 2012 DE 44 Rev. 38 (the Guide). The Guide is published to help employers understand their rights and responsibilities.

Information Presented in Chronological Sequence

Information in the Guide is presented in a chronological sequence, beginning with what employers need to know or do first, such as who is an employer, when to register, who is an employee, and what are wages.

California Generally Follows Federal Law

To simplify reporting requirements, the EDD follows federal tax guidelines and due dates whenever possible; however, California laws and rates may differ from federal laws and rates. The EDD administers payroll tax reporting laws according to the California Unemployment Insurance Code (CUIC) and California Code of Regulations (CCR).

The Guide Is an Important Resource

Regardless of the size of the business, the Guide is an important resource on the procedures required for compliance with California payroll tax laws. It clarifies both the provisions of the CUIC and CCR and their application to the business.

The Guide Provides General Information

The Guide provides general information that applies to the majority of employers. The Guide provides references to additional information on specialized topics. Information on detailed or complex issues that only apply to a small number of employers is not included in the Guide.

Contact Vision Payroll Today

Contact Vision Payroll if you have further questions on the Guide.

November 15, 2011

Vermont Minimum Wage to Increase to $8.46 January 1, 2012

Filed under: News — Tags: , , , , — Vision @ 6:12 pm
VT Govenor Peter Shumlin
VT Govenor Peter Shumlin
The Vermont Department of Labor announced recently that pursuant to Title 21 of the Vermont Statutes, Annotated §384, the minimum wage for the state of Vermont will increase from $8.15 to $8.46 per hour effective January 1, 2012. The law requires an adjustment to the minimum wage be calculated each year.

Adjustment Is Tied to Changes in CPI

The adjustment is tied to the change in the federal Consumer Price Index, US city average, not seasonally adjusted (CPI-U) for the 12 months ending in August and cannot increase more than five percent per year. The 3.7% increase in the CPI-U will result in an increase of $0.31 for 2012.

Find Out the Minimum Wage for All States by Visiting the Vision Payroll Minimum Wage Chart Page

Contact Vision Payroll if you have any questions on the Vermont minimum wage increase or visit our Minimum Wage Chart.

October 23, 2011

IRS Announces Adjustments to SIMPLE Plan Limits for 2012

IRS Announces Adjustments to SIMPLE Plan Limits for 2012
IRS Announces Adjustments to SIMPLE Plan Limits for 2012
In IR-2011-103, the Internal Revenue Service (IRS) announced cost-of-living adjustments to the limits on SIMPLE plan contributions for 2012. The limitation for SIMPLE plans is codified in §408(p)(2)(E) of the Internal Revenue Code of 1986 (IRC). This section also requires annual adjustments as necessary to keep pace with inflation in a manner similar to that required by IRC §415 for retirement plans.

2012 Contribution Limits Remains Unchanged

For 2012, the SIMPLE plan regular limitation remains at $11,500. The age 50 and over catch-up contribution remains at $2,500 for individuals who plan to reach age 50 before the end of 2012.

Contact Vision Payroll for More Information on 2012 SIMPLE Plan Changes

Contact Vision Payroll if you have questions on the SIMPLE plan contribution limits or get further information at Important Facts and Figures.

October 22, 2011

IRS Announces 2012 Retirement Plan Contribution and Compensation Limitations

IRS Announces 2012 Retirement Plan Contribution and Compensation Limitations
IRS Announces 2012 Retirement Plan Contribution and Compensation Limitations
In IR-2011-103, the Internal Revenue Service (IRS) announced that for 2012 the compensation limitation will increase from $245,000 to $250,000 under §401(a)(17), §404(l), §408(k)(3)(C), and §408(k)(6)(D)(ii) of the Internal Revenue Code of 1986 (IRC).

2012 Contribution Limit Also Increases

The contribution limit under IRC §415(c)(1)(A) for defined contribution plans will increase from $49,000 to $50,000. This limit does not include the age 50 and over catch-up contribution of $5,500 when applicable; therefore the total limitation for eligible taxpayers age 50 or over in qualifying plans will be $55,500.

Contact Vision Payroll for More Information on 2012 Retirement Plan Changes

Contact Vision Payroll if you have questions on changes to the 2012 Retirement Plan Contribution and Compensation Limitations or get further information at Important Facts and Figures.

October 21, 2011

Question of the Week: What Are the 2012 Highly Compensated Employee Limits?

What Are the 2012 Highly Compensated Employee Limits?
What Are the 2012 Highly Compensated Employee Limits?
This week’s question comes from Carla, a company president.

Carla asks:

We’re doing some compensation planning for next year. What are the 2012 Highly Compensated Employee Limits?

Answer: The IRS has just released updated information for 2012.

IRS Releases 2012 Highly Compensated Employee Limits in IR-2011-103

In IR-2011-103, the Internal Revenue Service (IRS) announced that for 2012 the Highly Compensated Employee Limitation under §414(q)(1)(B) of the Internal Revenue Code of 1986 will increase to $115,000. Non-discrimination testing in some types of retirement plans limits the deferral rate of “highly compensated employees” (HCEs) based upon the deferral rate (ADP) of the “non-highly compensated employees”.

Highly Compensated Employee Compensation Limit Had Been $110,000

For 2012 plan year testing, an HCE is anyone who was a “5-percent owner” at any time during 2011 or 2012 or anyone who received in excess of $110,000 in compensation during 2011 and, if elected by the employer, is in the top twenty percent of employees based upon compensation. The HCE limit was also $110,000 for 2010 and 2011 plan year testing. The new $115,000 limit for 2012 is to be used for 2013 plan year testing.

Look-back Provision Impacts HCE Testing Period

Since the law includes a look-back provision, employees who earned more than $110,000 in 2010 are generally considered HCEs for 2011 plan year testing, employees who will earn more than $110,000 in 2011 are generally considered HCEs for 2012 plan year testing, and employees who will earn more than $115,000 in 2012 are generally considered HCEs for 2013 plan year testing.

Contact Vision Payroll for More Information on HCEs

Contact Vision Payroll if you have questions on changes to the HCE definition for 2012 to be used in 2012 plan year testing or get further information at Important Facts and Figures.

October 19, 2011

Tip of the Week: Social Security Administration Announces 2012 Increases

Filed under: News — Tags: , , , , , — Vision @ 10:23 am
Commissioner of Social Security, Michael J. Astrue
Commissioner of Social Security, Michael J. Astrue
The Social Security Administration announced today that the Maximum Taxable Earnings or Social Security Wage Base would increase from $106,800 in 2011 to $110,100 in 2012.

Social Security Increases Based on CPI Change

Since there was a 3.6% increase in the Consumer Price Index (CPI-W) from the third quarter of 2010 to the third quarter of 2011, the Social Security Wage Base will also increase by 3.6%. This is the first increase in the Social Security Wage base since 2009. Wages are scheduled to be taxed at 6.2%, so the maximum tax to be paid by each employee at that rate would be $6,826.20. There are proposals to keep the current rate of 4.2% for employees or to reduce it to 3.1%, but none has passed at this time. About 7% of workers who pay Social Security Tax are expected to reach the maximum in 2012.

Retirement Earnings Test Exempt Amounts Increase for 2012

For workers under full retirement age who are receiving Social Security benefits, $1 in benefits is withheld for every $2 above the Retirement Earnings Test Exempt Amount of $14,160 per year or $1,180 per month in 2011. This will increase to $14,640 per year or $1,220 per month for 2012. The year an individual reaches full retirement age, $1 in benefits is withheld for every $3 above the Retirement Earnings Test Exempt Amount of $37,680 per year or $3,140 per month in 2011. This will increase to $38,880 per year or $3,240 per month for 2012. The month an individual reaches full retirement age there is no limit on earnings.

Quarter of Coverage Amounts Increases to $1,130

Also increasing for 2012 is that amount needed to earn a Social Security credit, formerly known as a quarter of coverage. In 2011, a credit is earned for every $1,120 of earnings, up to a maximum of four credits. That amount will increase to $1,130 for 2012.

Social Security Monthly Benefits to Increase in January 2012

The maximum benefit for a worker retiring at full retirement age is also increasing from $2,366 to $2,513. See the table below for other changes in Social Security benefits for 2012.

2012 Social Security Benefits

20112012
Maximum Benefit:
Worker Retiring at Full Retirement Age$2,366 per month$2,513 per month
SSI Federal Payment Standard:
Individual$674 per month$698 per month
Couple$1,011 per month$1,048 per month
SSI Resources Limit:
Individual$2,000$2,000
Couple$3,000$3,000
SSI Student Exclusion:
Monthly Limit$1,640$1,700
Annual Limit$6,600$6,840

Contact Vision Payroll Today

Contact Vision Payroll if you have any questions on the Social Security changes for 2012 or get further information at Important Facts and Figures.

October 18, 2011

Arizona Minimum Wage to Increase to $7.65 Effective January 1, 2012

Arizona Minimum Wage to Increase to $7.65 Effective January 1, 2012
Arizona Minimum Wage to Increase to $7.65 Effective January 1, 2012
The Labor Department of the Arizona Industrial Commission announced recently that pursuant to Arizona Revised Statutes §23-363, the minimum wage for the state of Arizona will increase to $7.65 per hour effective January 1, 2012. The law requires an adjustment to the minimum wage be calculated each year.

Adjustment Is Tied to Changes in CPI-U

The adjustment is tied to the US Consumer Price Index for All Urban Consumers, US City Average (CPI-U) for the 12 months ending in August. The 3.8% increase in the CPI-U will result in an increase of $0.30 for 2012. Increases are rounded to the nearest five cents.

Find Out the Minimum Wage for All States by Visiting the Vision Payroll Minimum Wage Chart Page

Contact Vision Payroll if you have any questions on the Arizona minimum wage increase or visit our Minimum Wage Chart.

October 17, 2011

Florida Minimum Wage Increases to $7.67 Effective January 1, 2012

Filed under: News — Tags: , , , , — Vision @ 5:25 pm
Florida Minimum Wage Increases to $7.67 Effective January 1, 2012
Florida Minimum Wage Increases to $7.67 Effective January 1, 2012
The Florida Department of Economic Opportunity announced recently that pursuant to the Florida Constitution, the minimum wage for the state of Florida would increase from $7.31 per hour to $7.67 effective January 1, 2012.

Adjustment Must Be Calculated Annually

The law requires an adjustment to the minimum wage that must be calculated each year. The adjustment is tied to the US Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) in the South Region for the 12 months ending in August. Since the CPI-W increased 4.9% from the previous year, an adjustment of $0.36 will be made to the minimum wage.

Find Out the Minimum Wage for All States by Visiting the Vision Payroll Minimum Wage Chart Page

Contact Vision Payroll if you have any questions on the Florida minimum wage or visit our Minimum Wage Chart.

October 15, 2011

North Dakota Unemployment Wage Base to Increase to $27,900 for 2012

Filed under: News — Tags: , , , , — Vision @ 5:11 pm
Maren Daley, Executive Director, Job Service North Dakota
Maren Daley, Executive Director, Job Service North Dakota
The Job Service North Dakota has announced an increase in the taxable wage base for 2011. The wage base will increase from $25,500 for 2011 to $27,900 for 2012.

Annual Increase Is Mandated by Law

This amount is set annually and is 70% of a statewide average wage.

Find Out the Wage Base for All States by Visiting the Vision Payroll Unemployment Taxable Wage Base Page

Contact Vision Payroll if you have any questions on the North Dakota unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

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