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.

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.

August 21, 2011

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

Filed under: News — Tags: , , , — Vision @ 12:42 pm
MO Taxpayers Receive Extension of Time to File Returns and Pay Taxes
MO Taxpayers Receive Extension of Time to File Returns and Pay Taxes
Due to the damage caused by flooding in Missouri beginning on June 1, 2011, President Barack Obama declared the following counties a federal disaster area: Andrew, Atchison, Buchanan, Holt, Lafayette and Platte.

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 May 31, 2011 and before June 17, 2011 as long as the deposits were made by June 16, 2011. In addition, affected taxpayers had until August 1, 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 the flooding and need further information on the relief provided by the IRS.

September 18, 2010

Missouri Unemployment Wage Base to Remain at $13,000

Filed under: News — Tags: , , , — Vision @ 10:05 am
Director Lawrence G. Rebman of the Missouri Department of Labor and Industrial Relations
Director Lawrence G. Rebman of the Missouri Department of Labor and Industrial Relations
Director Lawrence G. Rebman of the Missouri Department of Labor and Industrial Relations has announced that the taxable wage base for 2011 will remain at $13,000, unchanged from 2010.

Highest Wage Base Allowed by Law

Under §288.036 of the Missouri Revised Statutes, “in no event shall the state taxable wage base increase beyond thirteen thousand dollars.”

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

October 10, 2009

Missouri Unemployment Wage Base to Increase to $13,000

Filed under: News — Tags: , , — Vision @ 11:42 am

Director Lawrence G. Rebman of the Missouri Department of Labor and Industrial Relations has announced a increase in the taxable wage base for 2010. The wage base will increase from $12,500 for 2009 to $13,000 for 2010. Contact Vision Payroll if you have any questions on Missouri unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

July 22, 2009

Tip of the Week: Minimum Wage Hikes Take Effect this Week

The federal minimum wage will increase to $7.25 on Friday, July 24, 2009. Therefore, all work performed after July 23, 2009 should be compensated at the higher rate. In addition, the minimum wage will also increase to $7.25 in the following areas: Delaware, Idaho, Indiana, Maryland, Missouri, Montana, Nebraska, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, Puerto Rico, South Dakota, Texas, Utah, Virginia, and Wisconsin. Also, the minimum wage in the District of Columbia will increase to $8.25. Contact Vision Payroll if you have any questions on the minimum wage increases.

October 13, 2008

Missouri Minimum Wage to Increase January 1, 2009

Todd Smith, Director of the Missouri Department of Labor and Industrial Relations (DOLIR), recently announced that the Missouri minimum wage will increase $0.40 effective January 1, 2009. Under Section 290.502.2, RSMo (Missouri Revised Statutes), the DOLIR director must calculate an adjustment to the minimum wage based on changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from July to July. Changes are rounded to the nearest 5¢ and take effect the following January. This year’s change will increase the minimum wage from $6.65 to $7.05 per hour for covered workers. Contact Vision Payroll if you have any questions on the Missouri minimum wage increase or visit our Minimum Wage Chart.

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