In our blog on March 9th of this year we discussed the latest attempt (the last one was 2012) to simplify taxation for multistate employees. Those are employees who live in one state and work in other states. Many of these employees work in the state for only a few days or weeks out of the calendar tax year, yet employers must withhold taxes for these states and the employees must file, in most cases, income tax returns. To try to alleviate this burden on employers ( the tracking requirements for payroll departments can be massive) the Mobile Workforce State Income Tax Simplification Act of 2015 (H.R. 2315 ) was introduced. A major push by payroll professionals and the American Payroll Association was begun. I, myself, wrote letters to the Nevada congress members and Senators asking for the bill to be passed as well as asked my blog followers to do the same. Well the hard work so far is paying off. The House of Representatives passed the bill on September 21st and it is now in the hands of the Senate. It appears to be a bi-partisan bill with co-sponsors from both sides of the aisle. However, a similar bill was passed in 2012 but was not considered by the Senate before they adjourned the session so this may be the case this year. It is opposed by New York state and similarly situation states that will lose a lot of revenue from nonresidents if the bill is passed. Let’s keep our fingers crossed. However, writing to your Senators might help push this along. If every payroll professional who has had to deal with tracking, withholding and paying multistate employees would write a letter to their own Senators imagine how flooded the Senate mail office would be! So write, phone or email your Senators today!
Our free white paper this week is the second of our two-parter on the personal use of a company car. This time we are doing the math. Yes unfortunately, math is involved when having to determine the taxable wages. But it is not the only thing needed to do the computations. Vehicle values and vehicle logs are also needed, depending on the method chosen. You also need to determine the proper method based on the value of the car and the status of the employee. We hope you find the white paper useful. It can be requested on our website.
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As most payroll professionals are aware, having employees who travel to various states can be a logistical nightmare when it comes to taxation. Even an hourly employee traveling for a two-day training on their payroll software could create a taxation situation requiring hand calculation of taxes, and the employee having to file a non-resident tax return. This is the mobile workforce we live with today. And it is getting worse as more and more employees are traveling for their jobs. But you have a chance to do something about this because it doesn’t have to be this cumbersome for payroll if Congress passes the Mobile Workforce State Income Tax Simplification Act. This bill establishes a 30-day threshold before taxes are required. This ensures that state and local governments get their fair share of taxes when an employee works in a state on a regular basis, but doesn’t require an employee who only goes to that state for a 2-day conference to pay taxes. The Government Relations Committee of the American Payroll Association is helping to promote this new bill. It is asking payroll professionals to contact their Senators and Representatives and ask for their support on this bi-partisan bill. Because they know how busy payroll is, they have made it very simple for you. All you need to do is to click here. This will take you to their automated page where you just fill in your contact info and it creates the letters for you. Then your can send as an email or print and mail out yourself. It even allows you to add your own comments. Let’s help ourselves in payroll by helping to pass this much needed legislation.
I received an update recently from the Colorado Department of Revenue on a blog post they did on January 6th concerning paystubs and Forms W-2. Now in my payroll departments I have always stated emphatically in my year end memo that you can not interchange the two forms and you cannot submit your taxes using the paystub. But the problem seems to be that some tax preparation services are advertising “Bring us your pay stubs and we’ll file your tax return.” So it seems that payroll departments need to gently remind their customers that you have to wait until the W-2s are released by payroll before you can file either on paper or electronically.
The state legislature has passed AB 1245, a bill that requires California employers of 10 or more employees to submit quarterly payroll tax returns and pay the associated payroll taxes electronically over the California Employment Development Department website starting in 2017. The bill also requires all employers to file and pay electronically effective January 1, 2018. The bill awaits the governor signature and he is expected to sign it.
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The Indiana Department of Revenue will conduct Tax Amnesty 2015 from Sept. 15, 2015 through Nov. 16, 2015. Tax Amnesty 2015 is a limited-time opportunity for both individuals and businesses to pay past-due taxes free of penalty, interest, and collection fees.
For more information go the IN.gov Tax Talk Blog.
Effective January 1, 2016 all employers must file Form TC-941-R, Utah Annual Withholding Reconciliation, and corresponding Forms W-2 (and 1099 with Utah taxes withheld) electronically by an accelerated due date of January 31 of the year following the calendar year for which the forms pertain with the Utah State Tax Commission. The change is due to the passage of SB 250, which was signed by the governor on March 30, 2015. Currently, the deadline to file Forms TC-941R and W-2/1099 with the Commission is February 28 if filing on paper or March 31 if filing electronically. The new due dates apply to the 2015 calendar year filings. However the actual due date will be February 1, 2016 as the 31st is on a Sunday in 2016.
In addition, the penalties for failing to file the forms electronically by the January 31 due date are as follows:
- $30 per form, not to exceed $75,000 in a calendar year, if the employer files the form more than 14 days after the due date, but no later than 30 days after the due date;
- $60 per form, not to exceed $200,000 in a calendar year, if the employer files the form more than 30 days after the due date but on or before June 1; or
- $100 per form, not to exceed $500,000 in a calendar year, if the employer files the form after June 1; or fails to file the form.
Recent legislation ( S.B. 250) passed in Utah is expanding the types of forms that must be filed electronically by employers and moving the due dates. The employer’s annual income tax withholding return must be filed electronically by January 31 of the year following that for which the report is made. The old due date was February 28.
In addition, an employer that issues any of the following forms for a taxable year must file the forms with the commission on or before January 31 in an electronic format approved by the commission:
a federal Form W-2;
a federal Form 1099 filed for purposes of withholding; or
a federal form designated by the commission as substantially similar to a federal Form W-2 or federal Form 1099.
Under prior law, an employer that was required to file a federal Form W-2 in an electronic format was also required to file Form W-2 electronically for Utah income tax withholding purposes. However, there was no prior requirement to electronically file Form 1099 or any similar form for state withholding purposes.
Per a West Virginia State Tax Department website notice, taxpayers required to pay by electronic funds transfer (EFT) will be subject to a 3% civil penalty applied to any payment received on or after March 1, 2015, if the payment is not made by electronic funds transfer (EFT) and a waiver to pay electronically has not been obtained.
My sources are telling me that on March 30, 2015, the South Carolina Department of Revenue (SCDOR) will release a new Electronic Funds Transfer (EFT) Program. Taxpayers are being notified by mail of accounts that are impacted by the change. The mailing includes a welcome letter and a separate PIN Notification letter. The EFT process will continue to require the submission of a D128: Application for Electronic Funds Transfer. With the new program, there will be a new web address and contact phone number. However, current EFT Program users should continue using the current process until March 30, 2015. New Contact Information as of March 30, 2015 Web Address for Tax Payments: www.govone.com/tpp/southcarolina Phone Number for Tax Payments: 1-800-834-7733.