Latest on Exempt Updates

Back in March of 2014 President Obama instructed the Department of Labor to take a look at the rules for exempt employees and gave them 18 months to do it. The two main areas to be scrutinized were the job duties of executives and the salary level.  The Huffington Post is now reporting that we are getting some preliminary numbers for that salary level.  These are just being kicked around right now but it will give us some insight as to how the law may be changed.  As a reminder this change can be done by executive order so it can come as quickly as February of this year.  Currently we are at $455 per week or $23,660 per year.  This was the change brought about in 2004 under President Bush.  The previous change occurred under President Nixon in 1975 when it was raised to $155 per week.  At that time roughly 65% of salaried workers fell under that threshold and were entitled to overtime.  Under the current levels only 11% of salaried workers are under the limit therefore subject to overtime.  The discussion is how high to bring that number.

$51,000: this is being touted as the level to use to bring the percentages back in line with the 1975 figures as adjusted for inflation and other economic factors.  This would cover 47% of salaried workers.

$58,000:  this is the number that the DOL’s own economist is pushing which would cover an estimated 54% of salaried employees.

$42,000: This is the number that is being touted as the White House target number.  This would cover 35% of salaried workers.

Pressure is being placed upon the White House to raise the number as high as possible to ensure the broadest overtime coverage.

The final rules should be announced in February and we will bring them to you as soon as they are released.

Monday Round-Up to Catch Up

I have returned from my holiday/vacation and am back at my desk.  So I decided to have one round-up of the news today to catch up while I was gone and then one again on Friday to catch this week’s news.  So here is the round-up since I left on December 23rd.  There are a few exceptional items to note.  New York is eliminating the annual notice requirement, Illinois is moving up the due date for Forms W-2 for electronic filers and North Carolina is adding a new NC-4 form for nonresident aliens.

Arkansas: 2015 SUI wage base remains $12,000.

Connecticut: Department of Revenue has released the 2015 withholding calculation rules and tables.

District of Columbia: the Office of Tax and Revenue has released the Draft, Version 2, of the Income Tax Withholding Instructions and Tables for 2015 FR-230

Hawaii: The Department of Taxation has announced that it has adopted the federal standard mileage rates for 2015.

Hawaii: 2015 SUI wage base is $40,900.

Idaho: 2015 SUI wage base is $36,000.

Illinois: Department of Revenue has announced that as a result of an emergency rule filed on December 22, 2014, and effective with the 2014 tax year, employers required to file their Forms W-2 electronically must do so by February 15th not by March 31st as previously required.

Massachusetts: The Department Revenue has finalized the 2015 monthly transportation fringe benefits. They will follow the federal amounts of $250 for parking and $130 for transit passes/commuter highway vehicle.

Minnesota: The Department of Revenue has announced it has revised REV184, Power of Attorney. The Department will no longer accept the old version of the form. It has also eliminated Form REV184a.

Missouri: 2015 withholding tables now available

Montana: The SUI taxable wage base for 2015 is $29,500

New Mexico: The Taxation and Revenue Department has released the 2015 wage-bracket and percentage method tables.

New York: The state has eliminated the annual notice requirement that requires employers to notify and receive written acknowledgment from every worker regarding rate of pay, allowances, pay day, etc. Law also expanded various protections enacted in 2014 but still some technical details for legislature to work out.

North Carolina: Due to recent legislative changes the state has released a new Form NC-4 NRA, Nonresident Alien Employee’s Withholding Allowance Certificate. It must be used in 2015 in lieu of the NC-4 or NC-4EZ.

North Carolina: Supplemental withholding rate for 2015 is 5.75%. This is down from 5.8% for 2014.

North Dakota: The Tax Department has released the 2015 withholding tables

Vermont: The Department of Taxes has released its state income tax withholding tables for 2015.

Wyoming: SUI wage base for 2015 will increase to $24,700.

Our roundups will resume as per our usual schedule as of this Friday, January 9th.

Breaking News on Transit Passes

Of course just when we are closing up for the holidays we get breaking news on H.R. 5771.  President Obama has signed the bill that retroactively renews parity in transit and parking benefits back to January 1, 2014.  As discussed in an earlier blog this month, the IRS will issue guidance on how to handle the taxes and Forms W-2. It will more than likely follow the same guidance they issued back in 2013 for 2012 when this happened last time.

Final Round-Up for 2014

My office is closing for the holidays at Noon on Tuesday, December 23rd. So I wanted to get out my final update of the year. So for this week today is round-up day.  The following has crossed my desk since our last roundup on Friday.

EBSA: The Department of Labor’s Employee Benefits Security Administration has updated its Affordable Care Act web page with the following:

Alabama: The SUI taxable wage base will remain $8,000 for 2015. The rates will be continue to be under Schedule D.

North Carolina: The SUI taxable wage base will increase to $21,700 for 2015.

Oklahoma: 2015 withholding tables issued. http://www.tax.ok.gov/publicat/2015%20Withholding%20Tables.pdf

Washington DC: D.C. has issued a draft of the 2015 withholding tables booklet, FR-230. http://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2015FR-230DRAFTBOOKLET12182014.pdf

Unless there is breaking news by noon tomorrow this is our last update blog for 2014.  I will begin blogging and catching up on the news again on Monday, January 5, 2015. I wish you all the happiest of holidays!

Friday is Round Up Day 12-19-14 Version

Today is Friday so that makes it Round Up Day. Here are all the items that have passed my desk since our last Round Up Day update on 12-12-14.

Alaska: The 2015 SUI wage base will be $38,700. Employees will pay 0.57%.

Colorado: The 2015 SUI rates will range from 0.78% to 10.20% including 2015 bond charge. SUI wage base will remain $11,800.

Colorado: The publication “Colorado Income Wage Withholding Tax Tables for Employers” (DR 1098) has been updated and is now available on the Colorado Taxation Web site. These tables are valid for 2015 and 2016. https://cotaxinfo.wordpress.com/2014/12/16/colorado-income-wage-withholding-tables-for-2015-2016-now-available/

Delaware: The Division of Revenue has issued a calendar showing the due dates for employers for 2015. The calendar covers monthly, eighth-monthly, and quarterly filing periods. http://revenue.delaware.gov/services/Developer/cyr_bus/FY15_WH_DateTable.pdf

Illinois: SUI taxable wage for 2015 will remain $12,960.

Illinois: The Illinois Department of Revenue released the wage-bracket withholding tables for 2015. They are available on the website http://tax.illinois.gov/taxforms/Withholding/IL-700-T.pdf

Indiana: The Departmental #1 Notice has been updated. State income tax rate has been reduced to 3.3% for 2015. http://www.in.gov/dor/reference/files/dn01.pdf

Minnesota: Minnesota Revenue has issued the 2015 wage-bracket and computer formula withholding tables. Supplemental rate remains 6.25%. http://www.revenue.state.mn.us/businesses/withholding/Pages/Forms.aspx

Nebraska: The Department of Revenue has announced there will be no change in the state’s personal income tax withholding for 2015. The Department will not be issuing a new Nebraska Circular EN in 2015. http://www.revenue.nebraska.gov/withhold.html

New Hampshire: Effective January 1, 2015, RSA 275:37, relative to Equal Pay, is changed and there is a new mandatory poster for employers. The changed text of the Equal Pay law can be found at: http://www.gencourt.state.nh.us/rsa/html/XXIII/275/275-37-1.htm. The new mandatory poster is on the NH Department of Labor’s website at: http://www.nh.gov/labor/documents/equal-pay-poster.pdf

North Dakota: SUI taxable wage base for 2015 will be $35,600.

Oregon: Department of Revenue has issued the 2015 withholding tables. http://www.oregon.gov/dor/BUS/docs/withholding-tax-formulas_206-436_2015.pdf

Pennsylvania: 2015 SUI wage base will increase to $9,000. Employee withholding for SUI will remain 0.07% on total wages.

Texas: 2015 SUI wage base remains $9,000.

Vermont: Department of Taxes announces the launch of VTax, a modern integrated tax system. Conversion to VTax will take place over the next four years. Replaces current mix of three different platforms. Withholding taxes are scheduled to be converted in phases 1 and 2 in 2014 and 2015. https://www.myvtax.vermont.gov/WebFiles/VTaxOverview.pdf

West Virginia: The SUI rates and wage base of $12,000 remain the same for 2015.

Wisconsin: Webinar: Annual Filing Refresher: Join the Wisconsin Department of Revenue for a webinar that will cover a variety of topics on filing 2014 reports including:

  • Filing a Withholding Deposit Report Form WT 6
  • Filing an Annual Reconciliation Form WT 7
  • Filing W 2s
  • Filing a Sales and Use Tax Return Form ST 12
  • Ceasing Accounts
  • Updating profile information
  • Requesting an extension and much more

The webinar will be offered Tuesday, January 6 and Tuesday, January 13, 2015 (the same information will be covered in each webinar) from 9:30 a.m. – to 11:30 a.m. (CST).

If you cannot participate in the webinar, a video replay of the presentation will be available online within a week of the event. To register http://www.revenue.wi.gov/training/index.html

 

Parity with Parking Is Back!

Yesterday, the U.S. Senate passed what is known as the extender bill (Tax Increase Prevention Act of 2014, HR 5771) and the president is expected to sign it.  As we discussed in our previous blog on this subject, this bill give parity for transit passes and parking and is retroactive back to January 1, 2014.  Effective January 1, 2014, (no that is not a typo, I meant 2014) transit passes are increased to $250 per month.

This happened in 2012/2013 and the IRS had to issue guidance on how to handle Forms W-2 etc.  This guidance was contained in Notice 2013-8. It appears the IRS will issue the same guidance again for 2014.  We will keep you posted as more information comes in.

 

Holiday for Humans but Not for Tax Deposits

On December 6, 2014 the White House issued an Executive Order designating Friday, December 26, 2014 as a holiday for federal employees. As a result, with very few exceptions, all executive branch departments and agencies will be closed and their employees given the day off. This includes the Internal Revenue Service. However, even though the IRS employees will be enjoying an extra day off for the holiday it is still business as usual for the taxpayers. Normally tax payments and returns due on a federal holiday are delayed until the next business day. However, the IRS has confirmed that based on its interpretation of the Executive Order, Friday, December 26th does not meet the definition of a federal legal holiday. Therefore tax deposit and return deadlines are unaffected and must be made. The humans get the day off but no rest for the tax deposits or returns.irs building 2

 

 

Friday Is Round Up Day 12-12-14

Friday is once again round up day. Here is all the news that has passed my desk since our last round up on December 5th:

Hawaii: SUI taxable wage base for 2015 will increase to $40,900. This is up from $40,400 in 2014.

Idaho: The 2014 Idaho State Tax Commission W-2 Electronic Reporting Manual has been published. It is available on Idaho Tax website.

Idaho: State Tax Commission has updated A Guide to Idaho Income Tax Withholding to reflect changes in filing cycles and links. No changes to tables.

Kansas: The SUI wage base will increase to $12,000 for 2015. That is up from $8,000 for 2014

Louisiana: 2015 unemployment rates will increase but the wage base will remain $7,700. Rates will range from 0.10% to 6.20%

Massachusetts: The Department of Revenue has released the 2015 Circular M.

Oregon: The Oregon transit taxes’ rates will remain the same for 2015. Tri-Met will be 0.007237 and Lane will be 0.0070.

Rhode Island: As part of a six-agency task force the Rhode Island Division of Taxation has set up an anonymous telephone tip line to receive allegations of worker misclassification. The tax fraud tip line is staffed by the Division of Taxation. The tip number is 401.574.TIPS or 401.574.8477. For more information https://www.ri.gov/press/view/23515

Utah: The SUI wage base for 2015 will increase to $31,300. This is up from $30,800 for 2014. Rates will range from 0.3% to 7.3%.

 

 

 

 

Independent Contractor vs Employee–Another Round–Rhode Island

Misclassification of workers as independent contractors instead of employees is a nationwide problem facing not only the IRS but all 50 states.  A recent audit by the nonpartisan National Employment Law Project (NELP) looked at agency audits in 25 states and found that 10 to 30 percent of employers misclassify their employees as independent contractors.  And it could actually be higher than that.  That equates to several million workers nationally being misclassified. This results in billions of lost tax revenue and millions of workers without wage and hour or other protections.  So now the states are starting to take the matter seriously. In my October 16th blog I wrote about Alabama beginning to crack down. Now it is Rhode Island’s turn in the ring. As part of a six-agency task force the Rhode Island Division of Taxation has set up an anonymous telephone tip line to receive allegations of worker misclassification. The chairman of the Joint Task Force on the Underground Economy and Employee Misclassification is the Department of Labor and Training Director, Charles J. Fogarty. The tax fraud tip line is staffed by the Division of Taxation. The tip number is 401.574.TIPS or 401.574.8477.