Vision Payroll

September 26, 2013

Unemployment Insurance Weekly Claims Increase During Week Ending September 21, 2013

Secretary of Labor Thomas E. Perez
According to the US Department of Labor, in the week ending September 21, the advance figure for seasonally adjusted initial claims was 305,000, a decrease of 5,000 from the previous week’s revised figure of 310,000. The 4-week moving average was 308,000, a decrease of 7,000 from the previous week’s revised average of 315,000.

Advance Seasonally Adjusted Insured Unemployment Increases

The advance seasonally adjusted insured unemployment rate was 2.2% for the week ending September 14, an increase of 0.1 percentage points from the prior week’s unrevised rate.

Advance Seasonally Adjusted Insured Unemployment Increases

The advance number for seasonally adjusted insured unemployment during the week ending September 14 was 2,823,000, an increase of 35,000 from the preceding week’s revised level of 2,788,000. The 4-week moving average was 2,842,500, a decrease of 42,750 from the preceding week’s revised average of 2,885,250.

January 4, 2013

Question of the Week: Why Did My Paycheck Go Down in 2013?

Filed under: News — Tags: , , , , , — Vision @ 4:24 pm

This week’s question comes from Courteney, an office manager.

Courteney asks:

I just received my first 2013 paycheck and it is a lot less than my last check from 2012. Why did my paycheck go down in 2013?

Answer: The biggest impact most employees will see is the impact of the social security tax rate reverting to 6.2% after being 4.2% for 2011 and 2012.

Net Pay to Decrease 2% for Many Employees

For employees whose wages are subject to social security tax, many will see net pay decrease by 2% of gross pay. Employees who participate in a §125 cafeteria plan must reduce gross wages by the amount allocated to the cafeteria plan. Other adjustments to gross pay that reduce social security wages may also impact the calculation.

Social Security Wage Base Increases To $113,700 for 2013

The social security wage base increased from $110,100 in 2012 to $113,700 in 2013. Combined with the increase in the rate to 6.2%, the maximum social security tax withholding went from $4,624.20 in 2012 to $7,049.40 in 2013, or an increase of over 52%.

Federal Withholding Essentially Unchanged for Most Employees in 2013

With the release of Notice 1036 in January 2013, Vision Payroll has revised its withholding to comply with the guidance from the Internal Revenue Service (IRS). Most employees will see a small decrease of anyway from a few cents to just under $10 on a weekly paycheck, depending on federal taxable wages. Employees who earn more than $7,991 on a weekly basis will see federal withholding gradually increase over 2012 amounts. Since the highest rate is now 39.6% in 2013 compared to 35% in 2012, the differential will increase as taxable wages increase.

Vision Payroll Now Using Revised 2013 Withholding Tables for Federal Income Tax Withholding

As noted above, Vision Payroll has implemented the revised 2013 withholding tables for federal income tax withholding that were released by the IRS in Publication 1036.

January 1, 2013

Social Security Tax Rate on Employees Reverts To 6.2% of Taxable Wages

Social Security Tax Rate on Employees Reverts To 6.2% of Taxable Wages
Social Security Tax Rate on Employees Reverts To 6.2% of Taxable Wages
The temporary decrease of the social security tax rate to 4.2% has expired with the end of 2012. Beginning in 2013, the social security tax rate on employees reverts to 6.2%.

Net Pay Will Decrease Approximately 2%

Employees will notice a decrease in net pay by about 2% of gross pay. For example, if gross pay is $1000, net pay would decrease by $20. An adjustment must be made for items that reduce social security taxable wages such as §125 cafeteria plans.

Employers Social Security Tax Rate Had Not Decreased

There will be no change in the tax rate on employers as there had not been a provision to reduce it. The rate on employers remained at 6.2% throughout 2011 and 2012.

2010 Tax Act Had Temporarily Reduced the Rate To 4.2%

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (2010 Tax Act) reduced the social security tax withholding rate from 6.2% to 4.2 % effective with payments made after December 31, 2010. Although initially effective only for 2011, it was later extended to include 2012.

Contact Vision Payroll for Further Information

Contact Vision Payroll if you have any further questions on the social security tax rate.

October 16, 2012

Social Security Administration Announces 2013 Increases

Filed under: News — Tags: , , , , — Vision @ 9:59 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 $110,100 in 2012 to $113,700 in 2013.

Social Security Increases Based on CPI Change

Since there was a 1.7% increase in the Consumer Price Index (CPI-W) from the third quarter of 2011 to the third quarter of 2012, the Social Security Wage Base will also increase by 1.7%. This compares to a 3.6% increase in 2012. Wages are scheduled to be taxed at 6.2%, so the maximum tax to be paid by each employee at that rate would be $7,049.40. There is a proposal to keep the current rate of 4.2% for employees, but it has not passed at this time. About 6% of workers who pay Social Security Tax are expected to reach the maximum in 2003.

Retirement Earnings Test Exempt Amounts Increase for 2013

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 $14,640 per year or $1,220 per month in 2012. This will increase to $15,120 per year or $1,260 per month for 2013. The year an individual reaches full retirement age, $1 in benefits is withheld for every $3 above the Retirement Earnings Test Exempt Amount of $38,880 per year or $3,240 per month in 2012. This will increase to $40,080 per year or $3,340 per month for 2013. The month an individual reaches full retirement age there is no limit on earnings.

Quarter of Coverage Amounts Increases to $1,160

Also increasing for 2013 is that amount needed to earn a Social Security credit, formerly known as a quarter of coverage. In 2012, a credit is earned for every $1,130 of earnings, up to a maximum of four credits. That amount will increase to $1,160 for 2013.

Social Security Monthly Benefits to Increase in January 2013

The maximum benefit for a worker retiring at full retirement age is also increasing from $2,513 to $2,533. See the table below for other changes in Social Security benefits for 2012.

2013 Social Security Benefits

20122013
Maximum Benefit:
Worker Retiring at Full Retirement Age$2,513 per month$2,533 per month
SSI Federal Payment Standard:
Individual$698 per month$710 per month
Couple$1,048 per month$1,066 per month
SSI Resources Limit:
Individual$2,000$2,000
Couple$3,000$3,000
SSI Student Exclusion:
Monthly Limit$1,700$1,730
Annual Limit$6,840$6,960

Contact Vision Payroll Today

Contact Vision Payroll if you have any questions on the Social Security changes for 2013 or get further information at Important Facts and Figures.

June 19, 2012

Washington Unemployment Wage Base to Increase to $39,800

Filed under: News — Tags: , , , , — Vision @ 4:33 pm
WA ESD Commissioner Paul Trause
WA ESD Commissioner Paul Trause
The Washington Employment Security Department has announced an increase in the taxable wage base for 2013. The wage base will increase from $38,200 for 2012 to $39,800 for 2013.

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 Washington unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

June 17, 2012

Illinois to Implement Monthly Wage Reporting for Some Employers in 2013

Filed under: News — Tags: , , , , — Vision @ 3:45 pm
Illinois to Implement Monthly Wage Reporting for Some Employers in 2013
Illinois to Implement Monthly Wage Reporting for Some Employers in 2013
Under recently enacted Illinois Public Act 097-0689, the Save Medicaid Access and Resources Together (SMART) Act, certain Illinois employers will be required to file wage reports on a monthly basis starting in 2013.

SMART Act Mandates Monthly Filing for Employers Required to File Electronically

The law states that:

For any month which begins on or after January 1, 2013, a report of the wages paid to each of an employer’s workers shall be due on or before the last day of the month next following the calendar month in which the wages were paid if the employer is required to report such wages electronically pursuant to the regulations of the Director; otherwise a report of the wages paid to each of the employer’s workers shall be due on or before the last day of the month next following the calendar quarter in which the wages were paid.

Vision Payroll Will File Monthly for Affected Illinois Clients

Vision Payroll has already made system adjustments to implement monthly filing for all impacted Illinois clients.

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.

April 9, 2011

Illinois Adds Unemployment Tax Surcharge and Increases Wage Base

Filed under: News — Tags: , , , , , , , — Vision @ 5:59 pm
Illinois Adds Unemployment Tax Surcharge and Increases Wage Base
Illinois Adds Unemployment Tax Surcharge and Increases Wage Base
Illinois Governor Pat Quinn recently signed HB 1030 into law. The new law adds an unemployment tax surcharge, increases the taxable wage base, and reduces maximum benefits, among other provisions.

Surcharge Is for First Quarter of 2011

For the first quarter of 2011, employers are now required to pay a surcharge of 0.50% of taxable wages. Up to $90,000,000 of this surcharge is to be earmarked for interest payments for interest required to be paid under Title XII of the Social Security Act or for transfers to the state’s account in the unemployment trust fund.

Taxable Wage Base Will Increase in 2012

The taxable wage base will increase from $12,960 in 2011 to $13,560 in 2012.

Further Surcharge May Apply in 2012

If necessary to further interest payments, a surcharge will also apply to the first quarter of 2012 and the 2013 wage base will remain at $13,560. Otherwise, the 2013 wage base is scheduled to revert to the 2011 level of $12,960.

Maximum Benefits Reduced Starting in 2012

The new law also reduces the maximum total amount of benefits for an eligible individual, for specified benefit years starting in 2012, to 25 (instead of 26) times his or her weekly benefit amount plus dependents’ allowances, or to the total wages for insured work paid to such individual during the individual’s base period, whichever amount is smaller.

Contact Vision Payroll for Further Information

Contact Vision Payroll for further information on the changes to Illinois unemployment taxes.

March 15, 2010

South Dakota Increases Taxable Wage Base Through 2015

Filed under: News — Tags: , , , , , , , — Vision @ 9:24 am

South Dakota Governor Mike Rounds recently signed SB 186, which increases the taxable wage base from $10,000 in 2010, to $11,000 in 2011, $12,000 in 2012, $13,000 in 2013, $14,000 in 2014, and $15,000 in 2015. The surcharge was reduced from 1.5% to 1.0% in 2010 and to 0.75% in 2011. The maximum rate for 2010 was increased, however, from 8.5% to 9.5%. Contact Vision Payroll if you have any questions on the South Dakota unemployment tax law changes.

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