The Internal Revenue Service has launched a new and improved Tax Withholding Estimator, designed to help workers target the refund they want by having the right amount of federal income tax taken out of their pay. The Tax Withholding Estimator, now available on IRS.gov, incorporates the changes from the redesigned Form W-4, Employee’s Withholding Certificate, that employees can fill out and give to their employers this year. The IRS urges everyone to see if they need to adjust their withholding by using the Tax Withholding Estimator to perform a Paycheck Checkup. If an adjustment is needed, the Tax Withholding Estimator gives specific recommendations on how to fill out their employer’s online Form W-4 or provides the PDF form with key parts filled out.
To help workers more effectively adjust their withholding, the improved Tax Withholding Estimator features a customized refund slider that allows users to choose the refund amount they prefer from a range of different refund amounts. The exact refund range shown is customized based on the tax information entered by that user. Based on the refund amount selected, the Tax Withholding Estimator will give the worker specific recommendations on how to fill out their W-4. This new feature allows users who seek either larger refunds at the end of the year or more money on their paychecks throughout the year to have just the right amount withheld to meet their preference.
The new Tax Withholding Estimator also features several other enhancements, including one allowing anyone who expects to receive a bonus to indicate whether tax will be withheld. In addition, improvements added last summer continue to be available, including mobile-friendly design, handling of pension income, Social Security benefits and self-employment tax.
Starting in 2020, income tax withholding is no longer based on an employee’s marital status and withholding allowances, tied to the value of the personal exemption. Instead, income tax withholding is generall
y based on the worker’s expected filing status and standard deduction for the year. In addition, workers can choose to have itemized deductions, the Child Tax Credit and other tax benefits reflected in their withholding for the year. It is important for people with more than one job at a time (including families in which both spouses work) to adjust their withholding to avoid having too little withheld. Using the Tax Withholding Estimator is the most accurate way to do this.
As in the past, employees can also choose to have an employer withhold an additional flat-dollar amount each pay period to cover, for example, income they receive from the gig economy, self-employment, or other sources that is not subject to withholding. For more information about the updated Tax Withholding Estimator and the redesigned 2020 Form W-4, visit IRS.gov.
Keep up on all the latest payroll news for 2020. Subscribe to Payroll 24/7 today. Only $149 per year to keep totally informed. What a Deal!!
Our new payroll lecture series for 2020 is here. Our first lecture is on 
I want to remind every one of my followers that the early bird pricing for my latest webinar will end on December 3rd. This lecture will focus on just the new year. So I am calling it “Ringing in the New Year–2020”. For only $149 I will cover all the latest for 2020. This includes:
Many states have posting requirements in addition to the ones required by the FLSA. The state may have its own minimum wage poster. It may require a payday notice or copies of the wage and hour laws be posted or given directly to the employee. State with payday notice regulations include California, Montana, Minnesota, Texas, Tennessee and New York For those states who have them, including California, Connecticut, Colorado, Massachusetts, New Jersey, and New York, wage orders are usually required to be posted as well.
in frequency, such as semi-monthly or weekly. Arizona requires that the employer designate two or more days in each month to pay employees and the days cannot be more than 16 days apart. New York bases its requirements on whether the employee is a manual worker, a clerical worker or other type of worker. Most states require either biweekly or semimonthly paydays. These include California, Illinois and New Mexico. Other states permit monthly payrolls including Alaska, Delaware and Washington. Be sure when researching to also check into the amount of time permitted between closing the payroll (collecting the timesheets) and paying the employees. States do have requirements on what can be called “payroll processing time” or “lag time”.
There is no requirement under the FLSA as to the method to pay an employee. Almost all the states do address this issue. The common requirement is the employee be paid by U.S. currency or check. The federal government does regulate the paying of employees via direct deposit under the Electronic Funds Transfer Act. The Act was recently updated to include the newest method of payment of employees—payroll debit cards. The states are updating their regulations for payroll debit cards. The payroll professional must determine if the state allows this form of payment if it intends to begin a pay card payment program and what restrictions may be in place. These restrictions include limiting fees and voluntary participation.
freedom could require this time to be compensated. However, the states may view it differently. In most states the degree of control the employer has over the employee’s time and whether the employee is free to use his or her time for his or her own purposes is the guiding factor in whether or not the time is compensable.
Each year payroll professionals attend year end webinars or live events to get the latest news on how to close out the old year and begin the new one. This year I am offering something a little different than “year end”. My next lecture will focus on just the new year. So I am calling it “Ringing in the New Year–2020”. In this 90-minute lecture I will cover all the latest for 2020. This includes:
first official change. The states have not had time to catch up to these new regulations but should address this issue in 2020 as the legislatures start meeting. So far, states that differ from the FLSA include Alaska, California, Hawaii and Montana.
The FLSA has a standard. However since the states were the first to introduce the concept of a minimum wage (Massachusetts circa 1912) and the federal rate has rarely kept up with inflation (the last update was 10 years ago) this is an area where payroll sees the biggest difference between the FLSA and the states. 29 states have a higher minimum wage than the federal, 14 states are equal to the $7.25, 2 states are lower, and 5 states have no minimum wage provisions.
certain employees. The state requirements can range from forbidding tip credit as in CA and NV to matching the federal to anywhere in between. It is important to verify the definition of a tipped employee including the dollar limits if any and the percentage or dollar amount permitted for the credit.
Regular rate of pay is the calculated rate that is used to pay overtime under the FLSA. It can be affected by such payments as nondiscretionary bonuses and commissions. The state could require a different definition. In this area, most states are less strict than the FLSA. An example is Arizona which requires that the minimum wage of the state be considered the regular rate of pay.
But it does not address all the issues that arise when paying an employee. It is silent (gives no information or requirements) on such items as when an employee must be paid or the method that needs to be used. It explains what is considered hours worked concerning meal periods but does not actually require that an employee be given a meal period. States on the other hand are autonomous when it comes to wage and hour laws within their own borders. The state may mirror a federal law, exceed it, have a version of the same law with lesser requirements or no law governing an area at all. In addition, the state may have a requirement in an area that the FLSA is silent on such as paystubs or rest periods.
winner. It is also important to remember that not only should the labor code be verified but in some states wage orders must also be consulted. Wage orders are a set of wage and hour regulations issued by the state that apply to only a certain industry or group of workers.
news of the 2020 wage base the same day it was released by the SSA. Don’t wait for important payroll news, 
for our next payroll lecture ends on October 23rd. 
in California, the disaster relief payment would not be subject to Personal Income Tax (PIT) withholding. However, the payment would be subject to state unemployment insurance (SUI), Employment Training Tax (ETT) and state disability insurance (SDI). The payment would only be excluded under Section 938 of the California Unemployment Insurance Code (CUIC) if paid as a result of the employee’s death.
The U.S. Department of Labor announced that it issued three new opinion letters that address compliance issues related to the Fair Labor Standards Act (FLSA) the Family and Medical Leave Act (FMLA), and the Consumer Credit Protection Act (CCPA). An opinion letter is an official, written opinion by the Department’s Wage and Hour Division on how a particular law applies in specific circumstances presented by the individual or entity that requested the letter.
Reminder: The early pricing for our next payroll lecture ends on October 23rd. 
icare. The Additional Medicare Tax, started under President Obama, will continue with the same wage base, $200,000 and the same rate, 0.9% with no employer matching.