Vision Payroll

October 13, 2010

Tip of the Week: IRS Delays Health Care Reporting Requirement on Form W-2

IRS Delays Health Care Reporting Requirement on Form W-2
IRS Delays Health Care Reporting Requirement on Form W-2
In Notice 2010-69, the Internal Revenue Service (IRS) announced that the reporting of the cost of coverage under an employer-sponsored group health plan on Form W-2, Wage and Tax Statement, would not be mandatory for 2011 Forms W-2.

Additional Time Is Needed to Make Changes to Payroll Systems

According to Notice 2010-69, “[t]he Treasury Department and the IRS have determined that this relief is appropriate to provide employers with additional time to make any necessary changes to their payroll systems or procedures in preparation for compliance with the reporting requirement.”

Aggregate Cost Determined Using COBRA Rules

When reporting begins, “the aggregate cost is to be determined under rules similar to the rules of §4980B(f)(4), referring to the definition of the “applicable premium” under the rules providing for COBRA continuation coverage.”

Vision Payroll Will Assist Employers in Transition to New Rules

Contact Vision Payroll today for assistance in planning your transition to the new reporting rules for Form W-2.

February 10, 2010

Tip of the Week: 2010 Form W-4 Due for February 16, 2010 for Employees Claiming Exempt Status

Employees who have provided a Form W-4, Employee’s Withholding Allowance Certificate claiming exemption from federal income tax withholding must file a new 2010 Form W-4 by February 16, 2010 in order to continue their exemption from federal income tax withholding. Employers must start withholding on February 16, 2010 if employees have not provided a 2010 Form W-4 claiming exemption. Even employees who are no longer claiming exemption should file a 2010 Form W-4 so that employers may calculate the proper amount of withholding. If an employee has not provided a 2010 Form W-4 by February 16, 2010, the employer should withhold based on a previously filed Form W-4 not claiming exemption, if available or using single, zero allowances, if not. Spanish-speaking employees may complete Formulario W-4(SP), Certificado de Exención de la Retención del Empleado. Upon request, Vision Payroll can provide employers with pre-printed 2010 Forms W-4 for all active employees. Vision Payroll will not automatically change any employee’s claimed withholding allowances. Employers should update the allowances claimed by logging in to their company file or providing Vision Payroll with the updated information.

January 13, 2010

Tip of the Week: 2010 Form W-5 Now Available

The Internal Revenue Service (IRS) recently released 2010 Form W-5, Earned Income Credit Advance Payment Certificate. There are four criteria for claiming advance earned income credit (EIC) payments.

  1. Taxpayer (and spouse if filing jointly) must have a valid social security number.
  2. Taxpayer (or spouse if filing jointly) must have at least one qualifying child and be able to claim the credit using that child.
  3. Taxpayer’s expected earned income and adjusted gross income must be less than $35,535 ($40,545 if filing jointly).
  4. Taxpayer must expect to claim the EIC for 2010.

The maximum credit taxpayers may receive in advance is $1,830. Eligible taxpayers must file a new Form W-5 for 2010. The 2009 Form W-5 expired December 31, 2009. Contact Vision Payroll if you have any question on Form W-5.

December 25, 2009

Question of the Week: Where Can I Find the Levy Exemption Amounts for 2010?

This week’s question comes from Sherri, a payroll director. We have many employees with levies on their paychecks, I know we need to change the calculation if an employee provides a change in exemptions. Where can I find the levy exemption amounts for 2010? Answer: the Internal Revenue Service has released an updated version of Publication 1494, Tables for Figuring Amount Exempt from Levy on Wages, Salary, and Other Income (Forms 668-W(C), 668-W(c)(DO) and 668-W(ICS)). The table is used to calculate the amount of wages and other income exempt from levies for delinquent taxes. In addition to levies issued in 2010, employers use the revised amounts to calculate the exempt amount if the employee should provide a revised statement showing a change in filing status or exemptions. Contact Vision Payroll for assistance in automating the calculation of the exemption and levy amounts on employees’ paychecks.

October 5, 2009

AS Taxpayers Receive Extension of Time to File Returns and Pay Taxes

Filed under: News — Tags: , , — Vision @ 11:56 am

Due to the tsunami resulting in severe storms and flooding in American Samoa on September 29, 2009, President Barack Obama declared the Territory of American Samoa a federal disaster area. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after September 28, 2009 and before October 15, 2009 as long as the deposits were made by October 14, 2009. In addition, affected taxpayers will have until December 28, 2009 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms and flooding caused by the tsunami and need further information on the relief provided by the IRS.

October 4, 2009

GA Taxpayers Receive Extension of Time to File Returns and Pay Taxes

Filed under: News — Tags: , , — Vision @ 2:58 pm

Due to severe storms and flooding in Georgia on September 18, 2009, President Barack Obama declared the following counties a federal disaster area: Bartow, Carroll, Catoosa, Chattooga, Cherokee, Cobb, Coweta, DeKalb, Douglas, Fulton, Gwinnett, Heard, Newton, Paulding, Rockdale, Stephens and Walker. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after September 17, 2009 and before October 6, 2009 as long as the deposits were made by October 5, 2009. In addition, affected taxpayers will have until December 17, 2009 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms and flooding and need further information on the relief provided by the IRS.

September 15, 2009

NY Taxpayers Receive Extension of Time to File Returns and Pay Taxes

Filed under: News — Tags: , , — Vision @ 10:48 am

Due to severe storms and flooding in New York on August 8, 2009, President Barack Obama declared the following counties a federal disaster area: Cattaraugus, Chautauqua and Erie. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after August 7, 2009 and before August 25, 2009 as long as the deposits were made by August 24, 2009. In addition, affected taxpayers will have until October 7, 2009 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms and flooding and need further information on the relief provided by the IRS.

May 30, 2009

IRS Issues Guidance on Work Opportunity Tax Credit in Notice 2009-28

The Internal Revenue Service (IRS) recently issued Notice 2009-28 offering guidance on the Work Opportunity Tax Credit (WOTC) under §51 of the Internal Revenue Code of 1986 (IRC). Under the American Recovery and Reinvestment Act of 2009 or ARRA, unemployed veterans and disconnected youth were both added as members of a targeted group for purposes of the WOTC.

IRC §51 defines veteran, unemployed veteran, and disconnected youth. According to Notice 2009-28 a veteran is someone:

  1. Having served on active duty (other than active duty for training) in the Armed Forces of the United States (Armed Forces) for a period of more than 180 days; or
  2. Having been discharged or released from active duty in the Armed Forces for a service-connected disability.

Notice 2009-28 also reiterates that an unemployed veteran is someone “certified by the designated local agency” as:

  1. Having been discharged or released from active duty in the Armed Forces at any time during the 5-year period ending on the hiring date; and
  2. Being in receipt of unemployment compensation under State or Federal law for not less than four weeks during the one-year period ending on the hiring date.

According to Notice 2009-28, a disconnected youth is defined as “any individual who is certified by the designated local agency” as:

  1. As having attained age 16 but not age 25 on the hiring date;
  2. As not regularly attending any secondary, technical, or post-secondary school during the 6-month period preceding the hiring date;
  3. As not regularly employed during such 6-month period; and
  4. As not readily employable by reason of lacking a sufficient number of basic skills.

Notice 2009-28 also defines “not regularly attending any secondary, technical, or post-secondary school”, “not regularly employed”, and “not readily employable by reason of lacking a sufficient number of basic skills”.

“Not regularly attending any secondary, technical, or post-secondary school” is defined as someone who “states in writing that during the six months preceding his or her hiring date, he or she has not attended a secondary, technical or postsecondary school for more than an average of 10 hours per week, not counting periods during which the school is closed for scheduled vacations.” For this purpose, a secondary school is either “a secondary school as defined in 20 USC §7801(38); or a for-profit secondary school that otherwise meets the definition in 20 USC §7801(38).”

“Not regularly employed” is defined as someone who “during each consecutive three-month period within the six months preceding his or her hiring date, the individual earned less than an amount equal to the gross amount he or she would have been paid at the [higher of the federal or applicable state] minimum wage if he or she worked 30 hours every week during the three-month period.”

“Not readily employable by reason of lacking a sufficient number of basic skills” is defined as someone who “states in writing that he or she does not have a certificate of graduation from a secondary school or a GED Certificate” or someone who “states in writing that he or she has a certificate of graduation from a secondary school or a GED Certificate that was awarded no less than 6 months preceding his or her hiring date and has not held a job or been admitted to a technical school or post-secondary school since receiving the certificate.”

In order to receive the WOTC, an employer is generally required to obtain certification on or before the day the individual begins work or to complete Form 8850 on or before the date employment is offered and to submit Form 8850 within twenty-eight days from when the individual starts employment. Notice 2009-28 provides transitional relief for employers hiring unemployed veterans or disconnected youth after December 31, 2008 and before July 17, 2009. Employers will be eligible as long as Form 8850 is submitted to the designated local agency before August 18, 2009.

Contact Vision Payroll if you have any questions on Notice 2009-28 or the WOTC.

May 15, 2009

Question of the Week: What Are the 2010 Health Savings Account Inflation Adjustments?

This week’s question comes from Joel, an HR director. We just implemented a Health Savings Account plan at our company. We know the amounts employees can contribute for 2009. What are the 2010 Health Savings Account inflation adjustments? Answer: the Internal Revenue Service recently released Rev. Proc. 2009-29 which contained the 2010 inflation adjusted amounts for Health Savings Accounts or HSAs.

The annual limitation on deductions will increase from $3,000 in 2009 to $3,050 in 2010 for those with self-only coverage. Those with family coverage will have the deduction limitation increase from $5,950 to $6,150.

The definition of a high deductible health plan will change from one with a minimum deductible of $1,150 in 2009 to $1,200 in 2010 for self-only coverage and from $2,300 to $2,400 for family coverage.

The annual out-of-pocket limitation for 2010 will also increase from $5,800 in 2009 to $5,950 for those with self-only coverage; the out-of-pocket limitation for family coverage will increase from $11,600 to $11,900.

Contact Vision Payroll if you have any questions on Rev. Proc. 2009-29 and the changes to HSAs for 2010.

January 14, 2009

Tip of the Week: Phishing Scams Use IRS Name and Logo in E-Mails

Filed under: News — Tags: , , , , , — Vision @ 11:29 am

The Internal Revenue Service (IRS) is warning taxpayers to be on the lookout for phony e-mails that appear to be from IRS employees. The e-mails attempt to get personal information such as social security numbers, account numbers, and passwords that may be used in identity theft or to gain access to financial accounts.

The IRS never sends unsolicited e-mails nor does it request personal or financial information in e-mails. The IRS has set up a special e-mail address to forward such e-mails using instructions provided by the IRS. The IRS recommends you delete such messages after you have forwarded them.

Although no system is foolproof in preventing identity theft, Vision Payroll recommends vigilance in dealing with personal information, combined with a service such as LifeLock® to help detect certain types of identity theft.

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