Vision Payroll

November 5, 2011

Question of the Week: Why Did I Receive a Notice Titled “Your 2012 Federal Tax Deposit Requirements for Form 941”?

Filed under: News — Tags: , , — Vision @ 2:09 pm
Why Did I Receive a Notice Titled "Your 2012 Federal Tax Deposit Requirements for Form 941"?
Why Did I Receive a Notice Titled "Your 2012 Federal Tax Deposit Requirements for Form 941"?
This week’s question comes from Brad, a company owner.

Brad asks:

I recently received a notice from the IRS. Why did I receive a notice titled “Your 2012 Federal Tax Deposit Requirements for Form 941”?

Answer: The Internal Revenue Service (IRS) sends this notice to employers who have a change in deposit frequency.

Employers May Have One of Two Deposit Frequencies

Employers may have one of two deposit frequencies assigned. The first frequency is a semi-weekly frequency assigned to employers who had a tax liability of more than $50,000 during the lookback period. The second frequency is a monthly frequency assigned to employers who had a tax liability of $50,000 or less during the lookback period. For 2012, the lookback period is the period from July 1, 2010 to June 30, 2011.

Semi-Weekly Depositors Have Two Due Dates per Week

Employers assigned a semi-weekly deposit frequency generally must deposit taxes on one a two days each week. Any taxes accumulated for wages paid Saturday, Sunday, Monday, or Tuesday are due on Friday of that week and taxes accumulated for wages paid Wednesday, Thursday, or Friday are due Wednesday of the following week. Holidays or special rules may change those due dates.

Monthly Depositors Have One Due Date per Month

Employers assigned a monthly deposit frequency must deposit taxes accumulated for wages paid during a calendar month by the fifteenth of the following month. Weekends, holidays or special rules may change those due dates.

Weekends and Holidays Extend Due Date

If a due date falls on a weekend or a legal holiday in the District of Columbia, it extends the due date until the next day that is not a weekend or a legal holiday in the District of Columbia.

$100,000 Next-Day Deposit Rule May Apply

For taxpayers with a semi-weekly deposit frequency, if the total accumulated liability reaches $100,000 during any semi-weekly period, that deposit is due the next business day. For taxpayers with a monthly deposit frequency, if the total accumulated liability reaches $100,000 during any monthly period, that deposit is due the next business day. In addition, taxpayers with a monthly deposit frequency who accumulate a liability of $100,000 during a calendar month must deposit using the semi-weekly deposit rules for the remainder of that calendar year, unless the $2,500 rule applies.

$2,500 Rule May Reduce Deposit Frequency

Employers may pay their tax liability when filing Form 941 if their total Form 941 tax liability for either the current quarter or the preceding quarter is less than $2,500 and they did not incur a $100,000 next day obligation during the current quarter.

Vision Payroll Will Make Tax Deposits Following These Rules

Subscribers to Vision Payroll’s Tax Pay and File Service will have their taxes deposited by Vision Payroll in accordance with the above rules.

October 28, 2011

Question of the Week: Do We Have to Report Health Insurance on Our W-2s?

Do We Have to Report Health Insurance on Our W-2s?
Do We Have to Report Health Insurance on Our W-2s?
This week’s question comes from Maria, an HR director.

Maria asks:

I keep hearing from our employees that we have to report the cost of health insurance on the Forms W-2 this year and that the employees will be taxed on it. Do we have to report health insurance on our W-2s?

Answer: As announced by the Internal Revenue Service in Notice 2010-69 and Notice 2011-28, reporting of the cost of health insurance has been postponed to at least 2012 for some employers and beyond that for the rest.

Notice 2010-69 Postponed Effective Date for All Employers

As previously reported, in Notice 2010-69 the Internal Revenue Service (IRS) postponed the requirement that health insurance be reported on Forms W-2. Originally, under the Patient Protection and Affordable Care Act of 2010, reporting was to begin on the 2011 Forms W-2, which are distributed to employees in January 2012. In order “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,” the IRS postponed the reporting requirement until the 2012 Forms W-2, which are distributed to employees in January 2013.

Notice 2011-28 Further Postponed Deadline for Many Employers

In Notice 2011-28, the IRS further postponed the deadline for employers who are required to file less than 250 Forms W-2. Employers who are required to file fewer than 250 Forms W-2 for calendar year 2011 will not be required to report health insurance on Form W-2 in 2012. Furthermore, until further guidance is issued by the IRS, any employer required to file fewer than 250 Forms W-2 in a calendar year will not be required to report the health insurance on Form W-2 for the following year.

Notice 2011-28 Does not Cause Excludable Employer-Provided Health Care Coverage to Become Taxable

According to Notice 2011-28, nothing in §6051(a)(14), Notice 2011-28, or the additional guidance that is contemplated under §6051(a)(14), causes or will cause otherwise excludable employer-provided health care coverage to become taxable.

Contact Vision Payroll Today

Contact Vision Payroll today if you have further questions on 2011 Form W-2 reporting for health coverage.

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 14, 2011

Question of the Week: Do We Need to Include Bonuses in Overtime Calculations?

Do We Need to Include the Bonus in Overtime Calculations?
Do We Need to Include the Bonus in Overtime Calculations?
This week’s question comes from Sylvia, a payroll manager.

Sylvia asks:

We have employees who worked overtime this past week and received bonuses. Do we need to include bonuses in overtime calculations?

Answer: The bonuses may or may not have to be included in the overtime calculation. Discretionary bonuses are not included in calculating overtime pay, but non-discretionary bonuses are included.

Both the Decision to Pay a Bonus and the Amount of the Bonus Must Be Discretionary

Under 29 USC §207(e)(3)(a), in order for a bonus not to be included:

Both the fact that payment is to be made and the amount of the payment are determined at the sole discretion of the employer at or near the end of the period and not pursuant to any prior contract, agreement, or promise causing the employee to expect such payments regularly.

Regulations Further Clarify the Law

The regulations issued under this section (29 CFR §778.221(b)) expand upon the explanation under the law:

In order for a bonus to qualify for exclusion as a discretionary bonus under [the law stated above] the employer must retain discretion both as to the fact of payment and as to the amount until a time quite close to the end of the period for which the bonus is paid. The sum, if any, to be paid as a bonus is determined by the employer without prior promise or agreement. The employee has no contract right, express or implied, to any amount.

State Laws May Be More Beneficial

State laws may provide rules that are more beneficial to the employee and must be followed. Vision Payroll recommends that employers contact a labor law attorney to ensure that their bonus plans will be considered discretionary if they plan to exclude the bonus from the overtime calculation.

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 23, 2011

Question of the Week: How Do I Apply for the VCSP?

How Do I Apply for the VCSP?
How Do I Apply for the VCSP?
This week’s question comes from Allan, a small-business owner.

Allan asks…

I read about the Voluntary Classification Settlement Program (VCSP). I have some workers who might need to be classified as employees. How do I apply for the VCSP?

Answer: Employers may use Form 8952, Application for Voluntary Classification Settlement Program (VCSP), to apply for participation in the VCSP.

Eligibility Requirements

The instructions to Form 8952 list the following eligibility requirements to participate in the VCSP:

  1. Want to voluntarily reclassify certain workers as employees for federal income tax withholding, Federal Insurance Contributions Act (FICA), and Federal Unemployment Tax Act taxes (collectively, federal employment taxes) for future tax periods.
  2. Be presently treating the workers as non-employees.
  3. Have satisfied any Form 1099 requirements for each of the workers for the 3 preceding calendar years ending before the date Form 8952 is filed. A taxpayer will have satisfied its Form 1099 filing requirements if it provided Forms 1099 to the workers being reclassified for the period of time that the workers worked for the taxpayer. For example, a taxpayer who has only been in business for two years will have satisfied its Form 1099 filing requirements if it provided the workers being reclassified with Forms 1099 for those two years.
  4. Have consistently treated the workers as non-employees.
  5. Have no dispute with the Internal Revenue Service (IRS) as to whether the workers are non-employees or employees for federal employment tax purposes.
  6. Not be under examination by the IRS.
  7. Not be under examination by the Department of Labor (DOL) or any state agency for the proper classification of the workers.
  8. Not have been examined previously by the IRS or the DOL for the classification of workers; or,
  9. If the taxpayer has been examined previously by the IRS or the DOL for the classification of workers, taxpayer must have complied with the results of the prior examination.

In addition, as part of the VCSP, a taxpayer must agree to extend the period of limitations on assessment of employment taxes for 3 years for the first, second, and third calendar years beginning after the date the taxpayer elects to begin treating the workers as employees under the VCSP closing agreement. The taxpayer has the right to refuse to extend the period of limitations on assessment or to limit the extension to particular issues or to a particular period of time. However, if the taxpayer refuses to extend the period of limitations on assessment or provides only a limited extension, the IRS will not execute the VCSP closing agreement.

Filing Deadline for Form 8952

Although there is no absolute filing deadline for Form 8952, it should be filed at least 60 days before the date you want to begin treating the class or classes of workers as employees.

No Payment Due with Form 8952

Although you will be required to calculate the amount of the payment to be paid, the amount should not be sent with Form 8952. It must be sent with the signed closing agreement.

Contact Vision Payroll Today for Information on Form 8952

Contact Vision Payroll for further information on Form 8952.

September 16, 2011

Question of the Week: If We Don’t Have Employees Who Are Union Members, Do We Need to Post the Employee Rights Notice Posting?

If We Don’t Have Employees Who Are Union Members, Do We Need to Post the Employee Rights Notice Posting?This week’s question comes from Carl, a company owner.

Carl asks…

I heard there is a new poster about union rights. Our workplace is nonunion. If we don’t have employees who are union members, do we need to post the employee rights notice posting?

Answer: Employers with and without union workforces are required to post the notice because NLRA rights apply to union and non-union workplaces.

Posting Requirement to Begin November 14

As of November 14, 2011, most private sector employers are required to post a notice advising employees of their rights under the National Labor Relations Act (NLRA). The 11-by-17-inch notice should be posted in a conspicuous place, where other notifications of workplace rights and employer rules and policies are posted.

Failing to Post May Be Considered an Unfair Labor Practice

The National Labor Relations Board (NLRB) does not audit workplaces or initiate enforcement actions on its own. A failure to post the Notice would need to be brought to the NLRB’s attention in the form of an unfair labor practice charge by employees, unions, or other persons. In most cases, the NLRB expects that employers who fail to post the Notice were unaware of the rule and will comply when requested by a NLRB agent. In such cases, the unfair labor practice case will typically be closed without further action. The NLRB also may extend the 6-month statute of limitations for filing a charge involving other unfair labor practice allegations against the employer.

If an employer knowingly and willfully fails to post the Notice, that failure may be considered evidence of unlawful motive in an unfair labor practice case involving other alleged violations of the NLRA.

Be Protected Against Claims of Unfair Labor Practices

Join the Vision Payroll Poster Program today and receive a guarantee worth up to $25,000* against any government fine for a posting violation. You’ll receive a new version of our space-saving, full-color laminated posters as laws change. No hassle, no uncertainty, no research. Let Vision Payroll keep track of the changes and make sure you stay in compliance. Sign up TODAY!

*Our Poster Subscription Programs guarantee that you will have the most up to date State and Federal Labor Law posters. During the duration of your subscription, if you receive a posting violation while properly displaying the most current version of our posters, Elite Business Ventures will pay any fine imposed by a government agency, with the maximum amount of $25,000 due to improper content.

September 9, 2011

Question of the Week: What Are the Updated Standard Industry Fare Level Rates?

DOT Releases SIFL Rates for Second Half of 2011
DOT Releases SIFL Rates for Second Half of 2011
What Are the Updated Standard Industry Fare Level Rates?

This week’s question comes from Russell, a company president.

Russell asks…

Some of our employees use our company aircraft for personal purposes. We need to value this and include it as income for those employees. What are the updated Standard Industry Fare Level Rates?

Answer: The United States Department of Transportation (DOT) recently released updated Standard Industry Fare Level (SIFL) rates, which are used to value employee personal use of company aircraft.

Revised Rates Are Effective For the Second Half Of 2011

The Standard Industry Fare Level (SIFL) rates for the second half of 2011 were published by the Transportation Department. The rates, which are used to determine the taxable value of an employee’s personal flight in a company aircraft, are 23.95 cents for flights of up to 500 miles, 18.26 cents for flights of 501 to 1,500 miles, and 17.56 cents for flights greater than 1,500 miles. The terminal charge is $43.79.

Contact Vision Payroll for Updated SIFL Rates

Contact Vision Payroll if you have any questions on SIFL changes.

September 3, 2011

Question of the Week: Can You Tell Me More About HR Compliance Services?

Can You Tell Me More About HR Compliance Services?
Can You Tell Me More About HR Compliance Services?
This week’s question comes from John, an HR director. I read about HR On-Demand previously and would like more information. Can you tell me more about HR Compliance Services? Answer: HR Compliance Services is one of three great HR solutions that Vision Payroll offers its customers. The other two are MyHRSupportCenter and HR On-Demand.

Get Support from Your Assigned HR Pro

With HR Compliance Services, you get continuous, ongoing support from your very own assigned HR Pro. It’s like having a full time HR Pro on staff. Your HR Pro partners with you to understand your company and is there whenever needed.

An HR Auditor Will Help Identify Areas of Concerns, Risks, and Violations

A Certified HR Auditor will visit on-site and conduct an audit of your HR functions to identify areas of concerns, risks, and violations. An HR Compliance Action Plan will be created, thus providing the written documentation for you and your assigned HR Pro to work toward workplace compliance and correction of violations. HR forms, documents, education and training are all included.

Expect More with HR Compliance Services

In addition to all the services you’d get with HR On-Demand, HR Compliance Services offers the following:

  • On-site HR Audit: A Certified HR Auditor visits you on-site and conducts an audit.
  • Customized HR Compliance Action Plan: Results of audit are analyzed, and an HR action plan is created and catered to your business.
  • Assigned HR Pro: Your designated HR Pro works with you on the action plan priorities.
  • HR Compliance Coaching: Regular meetings with the HR Pro are scheduled to help you stay on track.
  • Annual Labor Law Posters and Updates: State and Federal!

And so much more!

Get Started with HR On-Demand Today

If you would like to upgrade to or get started on HR On-Demand, contact Vision Payroll today.

August 26, 2011

Question of the Week: Can You Tell Me More About HR On-Demand?

Filed under: News — Tags: , , , — Vision @ 12:41 pm
Can You Tell Me More About HR On-Demand?
Can You Tell Me More About HR On-Demand?
This week’s question comes from Beth, a company owner. I read about HR On-Demand previously and would like more information. Can you tell me more about HR-On Demand? Answer: HR On-Demand is one of three great HR solutions that Vision Payroll offers its customers. The other two are MyHRSupportCenter and HR Compliance Services.

Get Unlimited Consultations with HR Professionals

With HR On-Demand, you get unlimited consultations with HR Professionals over the phone or internet or by e-mail. You get answers to your employment law compliance and employee relationship questions, customization of employee handbooks, job descriptions, forms, letters, and more!

With HR On-Demand, Get Help When You Need It

With the HR On-Demand Program, you reach out for help any time your company needs it. Our experienced HR professionals then work with you to address your business specific questions and needs, including:

  • Ask the Pro: Address your situational questions about workplace compliance and employee issues, and receive a response within one business day.
  • Document Customization: Our HR Pros will create and/or customize your HR documents, and review for potential compliance concerns.
  • Employee Handbook Development: Schedule a consultation with an HR Pro to develop a custom Employee Handbook and a plan for implementation.

Get Started with HR On-Demand Today

If you would like to upgrade to or get started on HR On-Demand, contact Vision Payroll today.

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