Vision Payroll

November 27, 2011

IRS Revamps Schedule A for 2011

IRS Revamps Schedule A for 2011
IRS Revamps Schedule A for 2011
The Internal Revenue Service (IRS) has issued a revamped Schedule A for Form 940 for 2011. The revised Schedule A includes a line for every state as well as the District of Columbia, Puerto Rico, and the US Virgin Islands.

Revamped Form Necessitated by Increase in Number of Credit Reduction States

A revision to Schedule A was required since the number of states and territories subject to a credit reduction increased from three in 2010 to twenty-one in 2011.

Each State Is Listed with the Relevant Rate

The individual lines for each state, DC, PR and VI are listed with the applicable credit reduction rate. Taxpayers should simply enter the wages paid in each state and multiply by that state’s rate. Wages should be entered even for states that have a zero credit reduction rate.

Not All Taxpayers Must File Schedule A

Not every taxpayer that is required to file Form 940 is required to file Schedule A. Taxpayers that pay wages in more than one state or taxpayers that pay wages in a credit reduction state must complete and file Schedule A. Taxpayers that pay wages only in a single state that is not a credit reduction state need not complete or file Schedule A.

Rely on Vision Payroll for Your Schedule A

Vision Payroll will complete and electronically file Schedule A for all tax pay and file clients. Employers will be able to download a copy of Schedule A for their records.

November 26, 2011

IRS Releases 2011 Form 940

US Virgin Islands and Twenty States Have a Credit Reduction in 2011
US Virgin Islands and Twenty States Have a Credit Reduction in 2011
The Internal Revenue Service (IRS) has released the 2011 Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, and accompanying instructions. Employers use Form 940 to report their annual Federal Unemployment Tax Act (FUTA) tax.

Twenty Credit Reduction States for 2011

There are twenty credit reduction states for 2011: Michigan, Indiana, Arkansas, California, Connecticut, Florida, Georgia, Illinois, Kentucky, Minnesota, Missouri, North Carolina, New Jersey, Nevada, New York, Ohio, Pennsylvania, Rhode Island, Virginia, and Wisconsin as well as the US Virgin Islands. The credit reduction for most Michigan employers is 0.9% and for most Indiana employers it’s 0.6%. Most employers in the other credit reduction states and the US Virgin Islands have a credit reduction of 0.3%.

2011 FUTA Rate Decreased as of July 1, 2011

The FUTA tax rate decreased to 6.0% (before SUTA credits) on July 1, 2011. The rate for the first six months of 2011 was 6.2%. Under current law, the rate will remain at 6.0% throughout 2012. The 2011 Form 940 contains lines to report wages paid before July 1, 2011 and wages paid after June 30, 2011.

Vision Payroll to File Form 940 Electronically

Vision Payroll will file Form 940 for its clients electronically with the IRS and will not submit the paper version. Employers will be able to download a copy of Form 940 for their records.

November 25, 2011

Question of the Week: What Are the Credit Reduction States for 2011?

What Are the Credit Reduction States for 2011?
What Are the Credit Reduction States for 2011?
This week’s question comes from Victoria, a corporate controller.

Victoria asks:

I read that California is going to be a credit reduction state for 2011, but heard that they be more credit reduction states. What are the credit reduction states for 2011?

Answer: The Internal Revenue Service (IRS) has released a list of credit reduction states for 2011. There are a total of twenty states and one territory.

Standard Credit Rates Is 5.4% for 2011

Generally, employers who pay their state unemployment tax by the due date for filing Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, receive a credit 5.4% against their Federal Unemployment Tax Act (FUTA) tax. This credit is claimed on Form 940. Federal law provides for a reduction in the FUTA tax credit when a state has outstanding federal loans for two years. The credit reduction is calculated on Schedule A of Form 940.

Michigan Is a 0.9% Credit Reduction States

Since this is Michigan’s third consecutive year as a credit reduction state, the credit reduction for Michigan is 0.9% for 2011.

Indiana Is a 0.6% Credit Reduction States

Since this is Indiana’s second consecutive year as a credit reduction state, the credit reduction for Indiana is 0.6% for 2011. South Carolina, which was a first-year state for 2010, has paid off its loans and is not a credit reduction state for 2011.

Eighteen New Credit Reduction States for 2011

There are eighteen new credit reduction states for 2011. These states will have a credit reduction of 0.3% for 2011. The states are Arkansas, California, Connecticut, Florida, Georgia, Illinois, Kentucky, Minnesota, Missouri, North Carolina, New Jersey, Nevada, New York, Ohio, Pennsylvania, Rhode Island, Virginia, and Wisconsin. Additionally, the US Virgin Islands also has a credit reduction of 0.3%.

Contact Vision Payroll Today

For more information on the credit reduction states in 2011, be sure to contact Vision Payroll today.

October 2, 2011

New England Unemployment Rate Drops To 7.8 Percent in August

Keith Hall, Commissioner of the Bureau of Labor Statistics
Keith Hall, Commissioner of the Bureau of Labor Statistics
The New England unemployment rate was essentially unchanged at 7.8% in August, the US Bureau of Labor Statistics reported recently. Regional Commissioner Denis M. McSweeney noted that the over-the-year change in New England’s unemployment rate was not statistically significant. The national jobless rate was unchanged at 9.1%, but was 0.5 percentage point lower than a year earlier.

Pacific Division Continues to Report Highest Rate

New England is one of nine geographic divisions nationwide. Among the nine divisions, the Pacific continued to report the highest unemployment rate, 11.2% in August. The West North Central again registered the lowest rate, 6.9%. Over the month, the East North Central was the only division to experience a statistically significant unemployment rate change (+0.2 percentage point). The East North Central also recorded the only significant rate change among divisions over the year (-0.6 percentage point).

Four New England States Have Significantly Lower Rates than Rest of Nation

In August, five of the six New England states posted jobless rates that were significantly different from that of the United States. New Hampshire (5.3%), Vermont (5.9%), Massachusetts (7.4%), and Maine (7.6%) recorded lower-than-average unemployment rates and were among 25 states in the country to do so. In fact, New Hampshire reported the fourth-lowest jobless rate nationwide. In contrast, Rhode Island (10.6%) had the highest jobless rate among the New England states and was among eight states and the District of Columbia with rates significantly higher than the national average. Connecticut was among the 17 remaining states that registered unemployment rates that were not appreciably different from that of the nation.

No New England State Had a Significant Rate Increase in August

In August, seven states and the District of Columbia posted statistically significant rate increases from July. The six New England states were among the 43 remaining states that registered jobless rates that were not measurably different from those of a month earlier, though some had changes that were at least as large numerically as the significant changes.

Most States Had Minimal Change over the Last Year

Over the year, five states recorded statistically significant unemployment decreases. The District of Columbia posted the only significant rate increase from a year earlier (+1.3 percentage points). The six New England states were among the 45 states that registered jobless rates not appreciably different from those of a year earlier.

September 30, 2011

Question of the Week: What Are the IRS and DOL Doing About Workers Who Receive 1099s?

IRS Commissioner Douglas H. Shulman
IRS Commissioner Douglas H. Shulman
This week’s question comes from Steve, a small business owner.

Steve asks:

I’ve read about the Voluntary Classification Settlement Program (VCSP) and its application process with the Internal Revenue Service (IRS). What are the IRS and Department of Labor (DOL) doing about workers who receive 1099s?

Answer: The IRS and DOL are entering into agreements that include the IRS and DOL as well as several states to share information and coordinate enforcement of current laws and regulations.

Memoranda Signed at Washington Ceremony

Secretary of Labor Hilda L. Solis recently hosted a ceremony at DOL headquarters in Washington to sign a memorandum of understanding with the IRS that will improve departmental efforts to end the business practice of misclassifying employees in order to avoid providing employment protections. In addition, labor commissioners and other agency leaders representing seven states signed memoranda of understanding with the department’s Wage and Hour Division (WHD) and, in some cases, its Employee Benefits Security Administration, Occupational Safety and Health Administration, Office of Federal Contract Compliance Programs and Office of the Solicitor. The signatory states are Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Utah and Washington. Secretary Solis also announced agreements for the WHD to enter into memoranda of understanding with the state labor agencies of Hawaii, Illinois and Montana, as well as with New York’s attorney general.

DOL and IRS Will Share Information with Participating States

The memoranda of understanding will enable the DOL to share information and coordinate law enforcement with the IRS and participating states in order to level the playing field for law-abiding employers and ensure that employees receive the protections to which they are entitled under federal and state law.

Secretary Solis: We’re Standing United to End the Practice of Misclassifying Employees

“We’re here today to sign a series of agreements that together send a coordinated message: We’re standing united to end the practice of misclassifying employees,” said Secretary Solis. “We are taking important steps toward making sure that the American dream is still available for all employees and responsible employers alike.”

Commissioner Shulman: We Will Work Together More Efficiently to Address Worker Misclassification Issues

“This agreement takes the partnership between the IRS and DOL to a new level,” said IRS Commissioner Doug Shulman. “In this new phase of our relationship, we will work together more efficiently to address worker misclassification issues, and better serve the needs of small businesses and employees.”

Misclassification Can Create Economic Pressure for Law-Abiding Business Owners

Business models that attempt to change, obscure or eliminate the employment relationship are not inherently illegal, unless they are used to evade compliance with federal labor laws — for example, if an employee is misclassified as an independent contractor and subsequently denied rights and benefits to which he or she is entitled under the law. In addition, misclassification can create economic pressure for law-abiding business owners.

Memoranda Arose as Part of the Misclassification Initiative

These memoranda of understanding arose as part of the department’s Misclassification Initiative, which was launched under the auspices of Vice President Biden’s Middle Class Task Force with the goal of preventing, detecting and remedying employee misclassification.

Contact Vision Payroll Today

Contact Vision Payroll if you have further questions on the memoranda of understanding.

September 11, 2011

CT Taxpayers Affected by Tropical Storm Irene Receive Extension of Time to File Returns and Pay Taxes

Hurricane Irene, Courtesy of NASA/NOAA GOES Project
Hurricane Irene, Courtesy of NASA/NOAA GOES Project
Due to the damage caused by Tropical Storm Irene in Connecticut beginning on August 27, 2011, President Barack Obama declared the following counties a federal disaster area: Fairfield, Hartford, Litchfield, Middlesex, New Haven, New London, Tolland and Windham. Individuals who reside or have a business in these counties may qualify for tax relief.

Declaration Leads to Extension of Payroll Tax and Other Deadlines

Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after August 26, 2011 and before September 13, 2011 as long as the deposits are made by September 12, 2011. In addition, affected taxpayers have until October 31, 2011 to file most tax returns.

Vision Payroll Is Here to Help Affected Taxpayers with Payroll Tax Issues

Contact Vision Payroll if you were affected by Tropical Storm Irene and need further information on the relief provided by the IRS.

September 7, 2011

Tip of the Week: IRS Provides Tax Relief to Victims of Hurricane Irene

The Internal Revenue Service (IRS) is providing tax relief to individual and business taxpayers impacted by Hurricane Irene.

The IRS has announced that certain taxpayers in Connecticut, Massachusetts, New Jersey, New York, North Carolina, Puerto Rico and Vermont will receive tax relief, and other locations are expected to be added in coming days following additional damage assessments by the Federal Emergency Management Agency (FEMA).

The tax relief postpones certain tax filing and payment deadlines to Oct. 31, 2011. It includes corporations and businesses that previously obtained an extension until Sept. 15, 2011, to file their 2010 returns and individuals and businesses that received a similar extension until Oct. 17. It also includes the estimated tax payment for the third quarter of 2011, which would normally be due Sept. 15.

Hurricane Irene, Courtesy of NASA/NOAA GOES Project
Hurricane Irene, Courtesy of NASA/NOAA GOES Project

The tax relief is part of a coordinated federal response to the damage caused by the hurricane and is based on local damage assessments by FEMA. For information on disaster recovery, individuals should visit disasterassistance.gov.

Tax Relief Available So Far

Filing and payment relief is currently available to taxpayers in federal disaster areas declared in Connecticut, Massachusetts, New Jersey, New York, North Carolina, Puerto Rico and Vermont. The IRS expects to announce tax relief for taxpayers in other areas as damage assessments continue. The IRS encourages taxpayers and tax practitioners to monitor Tax Relief in Disaster Situations for updates.

So far, IRS filing and payment relief applies to the following counties and municipalities:

  • Connecticut: Fairfield, Hartford, Litchfield, Middlesex, New Haven, New London, Tolland and Windham;
  • Massachusetts: Berkshire and Franklin.
  • New Jersey: Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union and Warren.
  • New York: Albany, Clinton, Delaware, Dutchess, Essex, Greene, Montgomery, Nassau, Orange, Otsego, Rensselaer, Rockland, Saratoga, Schenectady, Schoharie, Sullivan, Suffolk, Ulster, Warren and Westchester.
  • North Carolina: Beaufort, Bertie, Brunswick, Camden, Carteret, Chowan, Craven, Currituck, Dare, Duplin, Edgecombe, Gates, Greene, Halifax, Hertford, Hyde, Johnston, Jones, Lenoir, Martin, Nash, New Hanover, Northampton, Onslow, Pamlico, Pasquotank, Perquimans, Pitt, Tyrrell, Vance, Warren, Washington and Wilson;.
  • Puerto Rico: Arroyo, Aguas Buenas, Caguas, Canovanas, Carolina, Cayey, Cidra, Coamo, Comerio, Humacao, Jayuya, Juncos, Loiza, Luquillo, Orocovis, Patillas, Ponce and San Juan.
  • Vermont: Addison, Bennington, Caledonia, Chittenden, Orange, Rutland, Washington and Windsor.

Vision Payroll is Here to Help Affected Taxpayers with Payroll Tax Issues

Contact Vision Payroll if you were affected by Hurricane Irene and need further information on the relief provided by the IRS.

August 30, 2011

New England Unemployment Rate Jumps To 7.9 Percent in July

Keith Hall, Commissioner of the Bureau of Labor Statistics
Keith Hall, Commissioner of the Bureau of Labor Statistics
The New England unemployment rate was essentially unchanged at 7.9% in July, the US Bureau of Labor Statistics reported today. Regional Commissioner Denis M. McSweeney noted that the over-the-year change in New England’s unemployment rate was not statistically significant. The national jobless rate was little changed at 9.1%, but was 0.4 percentage point lower than a year earlier.

Pacific Division Reported Highest Rate

New England is one of nine geographic divisions nationwide. Among the nine divisions, the Pacific continued to report the highest unemployment rate, 11.2% in July. The West North Central again registered the lowest rate, 6.8%. Over the month, two divisions experienced statistically significant unemployment rate changes: the East North Central (+0.3 percentage point) and Pacific (+0.2 point). Over the year, the East North Central recorded the only significant rate change among divisions (-1.0 percentage point).

Five New England States Have Significantly Lower Rates than Rest of Nation

In July, five of the six New England states posted jobless rates that were significantly different from that of the United States. New Hampshire (5.2%), Vermont (5.7%), Massachusetts (7.6%), and Maine (7.7%) recorded lower-than-average unemployment rates and were among 25 states in the country to do so. In fact, New Hampshire reported the fourth-lowest jobless rate nationwide. In contrast, Rhode Island (10.8%) had the highest jobless rate among the New England states and the fifth-highest jobless rate in the nation. Rhode Island was among eight states and the District of Columbia that had unemployment rates significantly higher than the national average. Connecticut was among the 17 remaining states in recording unemployment rates not appreciably different from that for the nation.

New Hampshire Has Significant Rate Increase in July

In July, New Hampshire was the only New England state and one of 10 states nationwide to report a statistically significant unemployment rate change from June (+0.3 percentage point). The District of Columbia also experienced a significant over-the-month rate increase (+0.4 percentage point). The remaining five New England states were among the 40 states that registered jobless rates that were not measurably different from those of a month earlier, though some had changes that were at least as large numerically as the significant changes.

Most States Have Minimal Change over the Last Year

Over the year, 11 states recorded statistically significant unemployment rate changes, all decreases. The six New England states were among the 39 states and the District of Columbia that registered jobless rates not appreciably different from those of a year earlier.

August 29, 2011

Connecticut Extends Filing Deadline for Certain Business Taxes

CT DRS Commissioner Kevin Sullivan
CT DRS Commissioner Kevin Sullivan
With continuing power outages and extended recovery efforts likely to take longer than originally anticipated, Connecticut Department of Revenue Services (DRS) Commissioner Kevin Sullivan announced that taxpayers now have until September 13, 2011 to file and pay taxes due following Tropical Storm Irene.

Mailing Deadline Extended To September 13, 2011

State tax filing and payment due from August 31, 2011 through September 13, 2011 must now be mailed and postmarked by midnight on September 13, 2011. Payments by electronic funds transfer must be initiated no later than 4:30 p.m. on September 12 to be considered timely.

Many Tax Types Are Affected

Affected taxes include:

  • Sales and use tax,
  • Business use tax,
  • Room occupancy tax,
  • Admission and dues tax,
  • Alcoholic beverage tax,
  • Tourism surcharge,
  • Weekly income tax withholding,
  • Corporation business tax, and
  • Gift and estate

Contact Taxpayer Services if a Notice Is Received

If taxpayers impacted by Irene receive a late filing notice from DRS for an August 31 through September 13 filing deadline, they should call the department’s Taxpayer Services line at (860) 297-5962 to explain the situation.

Contact Vision Payroll for Assistance

Connecticut clients should contact Vision Payroll for further information on the extension.

August 6, 2011

Question of the Week: How Does the Connecticut Tax Law Change Affect My Withholding?

Filed under: News — Tags: , , — Vision @ 11:35 am
CT Governor Daniel Malloy
CT Governor Daniel Malloy
This week’s question comes from Sean, a company president. Connecticut has passed an income tax increase retroactive to January 1, 2011. How does the Connecticut tax law change affect my withholding? Answer: The Connecticut Department of Revenue Services has issued new withholding tables that take the new tax changes into effect.

Number of Tax Brackets Increases from Three To Six

The number of tax brackets under the new law changed from three (3%, 5%, and 6.5%) to six (3%, 5%, 5.5%, 6%, 6.5% and 6.7%). In addition, the 3% rate is phased out for individuals with Connecticut adjusted gross income in excess of the following amounts:

  • Single – $56,500
  • Filing separately – $50,250
  • Head of household – $78,500
  • Filing jointly or qualifying widow or widower – $100,500

Revised Withholding Tables and Calculation Rules Took Effect August 1

The withholding tax tables (the withholding tables containing the pre-calculated total amount to withhold per pay period) have been revised to reflect the new rates, the 3% phase out provision, and a catch-up withholding amount. The revised withholding tables are effective August 1, 2011.

Additionally, the withholding calculation rules have been revised to reflect the new income tax rates, the 3% phase-out provision, the recapture tax calculation, and a catch-up withholding amount.

Revised Rules and Tables Include a Catch-Up Provision

The withholding calculation rules were revised to reflect the additional income tax rates, the 3% phase-out provision, the recapture tax provision under each withholding code, and the catch-up withholding amount. The withholding calculation rules instruct employers how to calculate the amount of tax that should be withheld for the remainder of the year from employees who are affected by these changes.

The 2011 withholding tables were revised to reflect the additional income tax rates and the 3% phase-out provision for the remainder of the year. They also include a catch-up amount to make up for the withholding tax for the first seven months of 2011 in which withholding tax was calculated at the rates in effect prior to the new legislation. The catch-up amount was spread out for the remainder of the year beginning on August 1, 2011.

Vision Payroll Is Using Revised Withholding Calculation Rules

Effective August 1, 2011, Vision Payroll is using the revised withholding calculation rules to calculate withholding for Connecticut employees.

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