IRS Releases Info on Third-Party Sick Pay Recap Form

The IRS has released Notice 2015-06 which describes the rules for filing Form 8922, Third-Party Sick Pay Recap. This is an annual form that must be filed with the IRS which replaces the third-party sick pay recaps that were filed with the Social Security Administration. Form 8922 is used to report total amounts of certain sick pay paid to employees by a third party.

Independent Contractor vs. Employee Another Round: Florida Jumps in the Ring

Officials from the U.S. Department of Labor and the Florida Department of Revenue today signed a memorandum of understanding with the goal of protecting the rights of employees by preventing their misclassification as independent contractors or other nonemployee statuses. Under the agreement, both agencies will share information and coordinate law enforcement. The MOU represents a new effort on the part of the agencies to work together to protect the rights of employees and level the playing field for responsible employers by reducing the practice of misclassification. The Florida Department of Revenue is the latest state agency to partner with the Labor Department.

Memoranda of understanding with state government agencies arose as part of the DOL’s Misclassification Initiative, with the goal of preventing, detecting and remedying employee misclassification. Alabama, California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington state agencies have signed similar agreements.

Form W-2 Filing Date Reminders

Just a quick reminder of the filing due dates for the 2014 Forms W-2.  The form is due to the employee by Monday, February 2, 2015.  January 31, 2015, the normal due date is a Saturday so we move the due date to the next business day.  The forms are due to the Social Security Administration by March 31, 2015 if filing electronically.  The form is due by March 2, 2015 if filing on paper. Again the normal due date of the last day in February falls on a Saturday.

IRS Releases Guidance on Transportation Fringe Benefits

The IRS has released guidance with respect to the issues related to the retroactive increase in the monthly transit benefit exclusion for 2014. The increase went from $130 per participating employee to $250 per participating employee for the period from January 1, 2014 through December 31, 2014.  Due to the timing of the statutory change and in order to reduce administrative burden, the Service is providing a special administrative procedure for employers that treated excess transit benefits as wages and that have not yet filed their fourth quarter Form 941 for 2014 to make necessary corrections on their fourth quarter Form 941. This guidance is contained in Notice 2015-02.

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.

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.