White Paper: Disaster Payments and the IRS

We are always hearing in the news about the latest disaster in the nation. Whether it be wild fires in California or flooding in Texas. Natural disasters do happen and can be annual occurrences in some parts of the nation.  When this happens, it is natural to want to help those individuals who are personally affected especially if it strikes close to home like in the case of a co-worker.  When a co-worker loses a home to a wild fire or must move out due to flood damage even employers want to help out.  But when an employer wants to help, does that change the nature of the disaster grantassistance. In other words,  if co-workers take up a collection it is one thing, but what if the employer gives the employee a grant to help cover the costs not reimbursed by insurance? Is it then taxable income and taxes must be deducted? Actually, it may not have to be. Our white paper this time is on Handling Disaster Relief Payments in Payroll.  It explains how and when these types of payments can be made and the taxation requirements.  We hope you find it useful.

white paper disaster payments 2016

Get the latest payroll-related news as it happens! Subscribe to The Payroll Pause today!


This Week’s White Paper–Employee Achievement Awards

Taxing awards to employees is always a tricky business.  Is it taxable or not?  If I take taxes out will that diminish the award or the employee’s moral over receiving it? Unfortunately, we sometimes can’t take that into consideration.  The IRS says it is taxable, so we tax.  But sometimes the IRS says it is not taxable.  Case in point, employee achievement awards. Given for length of service or safety, these awards can be given without adding it as income to the employee’s wages if done correctly. Of course, no cash or gift certificates. It must be tangible personal property like a pin for years of service or a plaque for safety.  Our white paper this week deals with when to tax and when not to tax employee achievement awards. We hope you find the information useful.  You can request your copy of our white paper on our website.


Get all the latest payroll news right to your inbox for a fraction of the costs of other news services! Subscribe to The Payroll Pause today! As our thank you gift for subscribing, receive attendance to one of our upcoming 2016 webinars for FREE! A $149 value free as our thank you for subscribing. But hurry, this promotion won’t last long.

Early Bird Pricing Closes Today

The early bird pricing for our first webinar of the year, How to Handle Abandoned Wages, closes today. You need to register by 5pm today in order to lock in the $99 price.  Starting tomorrow the price goes back up to $149.  So don’t miss out, register today! This webinar, as with all our webinars, is approved for 1.5 RCHs by the APA.

Keeping it 100% or Why Can’t We Just Leave It?

one hundred percent goldIt still amazes me sometimes when I see questions from my fellow payroll professionals about how accurate we have to be when it comes to tax deposits and reports.  As we all know the curse of being a payroll professional is that everything you do has to be 100% correct.  No 99% accuracy on tax deposits, no 99.9% pure on tax reporting. Most of us have had to face the question, do I really have to redo this for such a small error?  So I always get a giggle when I see the question come around on the boards about correcting something that isn’t quite 100% accurate.  I know its from someone new to our profession just asking and hoping for a certain answer but knowing in their hearts they won’t hear it. For example, a couple of weeks ago on the one of the listservs I follow someone asked the following:  We left off the employee contribution to the HSA on the Forms W-2.  Since they have already gone out to the employees do we just leave them alone?

You know the results of the responses without my listing it but let me summed it up with this short excerpt: … You can’t just say “oh, well” and dismiss the problem after statements are mailed to employees…In other words no matter what, payroll must be 100% accurate, 100% of the time.  Welcome to the world of the payroll professional! But then again, we wouldn’t want it any other way.

Need news updates as they happen?  Subscribe to the Payroll Pause for only $65 per year

So You Have A Perplexing Payroll Question?

Over the years I have been asked to research many questions.  And as you know my schedule just doesn’t permit me the luxury of answering the most perplexing questions or even the more mundane ones.  But now the American Payroll Association is looking for questions to be answered at the Annual Congress.  The APA has scheduled two Q & A sessions of the Forums on Federal Payroll Issues.  The panel will consist of speakers from the DOL, IRS, OCSE, SSA, & USCIS.  So now is the chance to get your question answered at the next Congress (in May).  You can post the question here on this blog and I will pass them along to the APA Government Relations Chair for inclusion in the panel discussion.  Just a reminder I won’t be answering the questions just passing them along. Questions are due by the end of February.

My Name Was on the Wall, Was Yours?

The EY 2015 Payroll Wall of Fame came out on December 23rd and my name was on it.  Was yours?  I think this was a great idea and so did 673 payroll professionals who helped celebrate our profession.  Collectively there were 14,000+ years of service in the payroll industry represented.  Some with just four years in payroll while others with over 40 years in the profession.  But each one proud to show it. To view the wall click here.