Posts Tagged ‘taxes’

Florida Unemployment Compensation

March 8, 2010

2010 Unemployment Tax Relief

Florida Governor Charlie Crist (R) signed into law HB 7033, unemployment tax relief for all Florida employers that were previously issued 2010 tax rates.

The new law, passed March 2, 2010 and retroactive to January 1, 2010, delays the changes in the SUI tax rate calculation until 2012; reduces the taxable wage base and provides for quarterly installment payments.  As a result, the 2010 taxable wage base of $8,500 reverts back to $7,000 in an estimated tax savings of $81.00 per employee for maximum-rated employers at 5.4%.

HB 7033:

  • Adjusts tax rate calculations through 2011.

Minimum rate: 0.0036 or $25.20* per employee

Maximum rate: 0.0540 or $378 per employee

*The minimum rate is an approximate figure until the rates have been recalculated

  • Reduces the taxable wage base from $8,500 to $7,000 until 2012.
  • Provides for quarterly installment payments for an annual administrative fee of not more than $5.00 without interest or penalty.

The tax relief will apply to taxes due by April 30, 2010. The Florida Department of Revenue must recalculate the 2010 unemployment tax rates and reissue notices to employers. It is anticipated the revised notices will be sent to employers in late March or early April.

Businesses generally owe the majority of SUI taxes in the first half of the year. Employers should review their cash flow options for taking advantage of the quarterly installment payment options.

Tags:, ,
Posted in taxes | Leave a Comment »

Hiring Incentives to Restore Employment Act – H.R. 2847

March 1, 2010

The Senate approved H.R. 2847 last Wednesday, February 24.

Included in the $15 billion Senate HIRE job-creation bill “Hiring Incentives to Restore Employment Act” are tax breaks that would give businesses incentives to hire unemployed workers. The legislation amended a much larger jobs bill passed last December by the House.

Payroll Tax Relief for Hiring Unemployed Workers

For certain employers, the Senate HIRE Act would provide relief of the employers 6.2% OASDI (Social Security tax liability) for wages paid to a “qualified individual” for any 2010 period starting anytime on or after the date the bill is enacted and before January 1, 2011.

  • Begins work for a qualified employer after February 3, 2010 and before January 1, 2011.
  • Certifies by signed affidavit, under penalties of perjury, that the individual had not been employed for more than 40 hours during the 60-day period ending on the date the employment begins.
  • Individual is not employed to replace another employee of the employer unless that former employee separated from employment voluntarily or for cause.
  • Is not related to the employer described in section IRC 51(i)(1) (substituting ‘qualified employer’ for ‘taxpayer’).

Employers of federal, state, and local government would not be eligible for the employer tax exemption. However, public higher education institutions would be eligible.

Business Credit for Retention of Certain Newly Hired Individuals in 2010

In general, the Senate jobs bill would increase an employer’s business credit by $1,000 on its income tax return for each ‘retained worker’.

Retained Worker

  • Employed by the taxpayer on any date during the taxable year.
  • Employed by the taxpayer for a period of not less than 52 consecutive weeks.
  • Whose wages during the last 26 weeks of such period equaled at least 80 percent of such wages for the first 26 weeks of such period.

The bill will now be considered by the U.S. House of Representatives, as Americans continue to grow impatient for economic growth to translate into jobs.

Tags:, , ,
Posted in taxes | Leave a Comment »

State Guidance on New Legislation – Military Spouses Residency Relief Act (MSRRA)

February 20, 2010

On Nov. 11, 2009, President Obama signed S. 475, the Military Spouses Residency Relief Act ( P.L. 111-97) (the MSRRA), into law. The MSRRA amended the Servicemembers Civil Relief Act ( P.L. 108-189), retroactively to the beginning of the 2009 tax year, to provide that when a service member leaves his or her home state in accordance with military or naval orders, and the spouse relocates from that state to accompany the service member, the spouse will not be taxed in the new jurisdiction. Prior to the legislation, when the military ordered service members to move, spouses who moved with them were often subject to taxes in the new state or locality, including withholding taxes.

MSRRA does not create the right to pick and choose any state of legal residence for spouses of service members. The spouse may now align his or her residence with the service member, if the spouse previously had established residency in the same state as the service member. The alternative to aligning with the service member’s state of residence is for the spouse to become a resident of the state where the service member is currently stationed.

The following states have issued 2010 guidance for withholding on the new legislation:

California

The Franchise Tax Board (CFTB) has updated Publication 1032, Tax Information for Military Personnel, to include information on the legislation. The Employment Development Department (EDD) is advising spouses who qualify for relief under the new legislation to submit a new Form DE 4, Employee’s Withholding Allowance Certificate, to their employer. The form has been modified to take into account the exemption status provided by the new legislation.

Colorado

Colorado FYI Tax Publication; INCOME 21 – Military Servicepersons is updated providing guidance for spouses who claim exempt wages and tips.  A qualifying spouse who claims exempt may be required to provide proof that they qualify for relief.  Documentation includes, but not limited to, permanent change of station documentation, prior state filing history and tax returns, voter registration, and their driver’s license of the other state.

Connecticut

A check box is added on the 2010 Form CT-W4, Employee’s Withholding Certificate, for military spouses who claim an exemption from Connecticut withholding (MSRRA exemption). Employees must provide their Employer with a copy of the service member’s Leave and Earnings Statement (LES) and a copy of the spouse’s non-military spouse ID.

District of Columbia

Qualifying spouses may file Form D-4, Employee Withholding Allowance Certificate, with their employer to claim exemption from withholding.

Georgia

Qualifying spouses should file an amended Form G-4, Employee Withholding Allowance Certificate, with their employer to suspend withholding on their wages. On the 2009 Form W-2, the employer should report all wages earned during the year as Georgia wages. On the W-2 for 2010 and any year thereafter, the employer should not report any of the wages as Georgia wages on Form W-2.

Illinois

Qualifying spouses may file Form IL-W-5-NR, Employee’s Statement of Nonresidence in Illinois, with their employer to claim exempt from Illinois Income Tax on compensation under the Military Spouses Residency Relief Act.

Indiana

INFORMATION BULLETIN #27 – Indiana Adjusted Gross Income Tax Applicable to Military

Personnel and Spouses is updated providing guidance for withholding state and county tax under the Military Spouses Residency Relief Act.

Iowa

Qualifying spouses may file 2010 Form IA W-4, Employee Withholding Allowance Certificate, with their employer to claim exemption from withholding under the Military Spouses Residency Relief Act.

Kansas

Qualifying spouses may file Form K-4, Employee Withholding Allowance Certificate, with their employer to claim exemption from withholding. Kansas employers should request evidence that the military spouse is indeed a legal resident of a state other than Kansas. Employers may also want to inquire with military spouses’ state of residency as to whether the Kansas employer is required to withhold income tax for that state.

Kentucky

Qualifying spouses may file the November 2009 version of Form K-4, Employee’s Withholding Exemption Certificate, with their employer to claim exemption from withholding.

Louisiana

A military spouse whose wages are exempt from Louisiana income tax may claim an exemption from Louisiana withholding tax by filing Form L-4E with their employer. Form L-4E expires at the end of the year, therefore, the spouse must file a Form L-4E each year if the spouse qualifies for the exemption. The spouse must also revoke the exemption certificate within ten days from the day the spouse no longer meets the criteria. To discontinue or revoke the exemption, the military spouse must file a new Form L-4 with their employer.

Maine

Effective beginning with the 2009 tax year, income earned in Maine by a service member’s spouse who is not a Maine resident and is domiciled in another state will not be considered Maine-source income. Previously, all income earned in Maine by a military spouse was considered Maine-source income and taxed as such. The Act does not exempt non-military income of a servicemember earned in Maine from Maine tax.

Maryland

Qualifying spouses may file Form MW507, Employee’s Maryland Withholding Exemption Certificate, with their employer to claim exemption from withholding if (i) your spouse is a member of the armed forces present in Maryland in compliance with military orders; (ii) you are present in Maryland solely to be with your spouse; and (iii) you maintain your domicile in another state.

New Jersey

Qualifying spouses may file Form NJ-165 (revised 12-09), Employee’s Certificate of Non-Residence in New Jersey, with their employer to claim exemption from withholding. If you claim exemption under the SCRA, the state requests employees to attach a copy of their spousal military identification card to Form NJ-165.

New Mexico

Qualifying spouses who move to New Mexico solely to be with their spouse who is in New Mexico because of military orders may keep their out-of-state residency status and may source their non-military wages to their state of residence.

Certain restrictions apply:

The service member must have declared “legal residence for purposes of withholding state income taxes from military pay” in another state.

  • The service member and the spouse must be residents of the same state.
  • The service member must be in New Mexico in compliance with military orders.
  • The service member’s spouse must be in New Mexico solely to be with their spouse.

New York

Changes have been made to allow an exemption from New York State personal income tax withholding for military spouses qualifying under the Servicemembers Civil Relief Act (SCRA).  Qualifying spouses may file the 2010 Form IT-2104-E, Certificate of Exemption from Withholding, with their employer to claim exemption from withholding.  The MSRRA has no effect on the Metropolitan Commuter Transportation Mobility Tax (MCTMT) imposed on employers that have payroll expense within the Metropolitan Commuter Transportation District.

North Carolina

The North Carolina Department of Revenue (DOR) has issued both a Notice and a Frequently Asked Questions (FAQ) release on the MSRRA. The DOR notes that the federal legislation prohibits North Carolina from taxing the income earned if: (1) you are the spouse of a servicemember who is not legally domiciled in North Carolina and who is in North Carolina solely in compliance with military orders; (2) you are in North Carolina solely to be with your spouse; and (3) you are domiciled in the same state as the servicemember. With respect to the military spouse exemption, neither spouse qualifies for exemption under the Military Spouses Residency Relief Act if both spouses are servicemembers who are in North Carolina in compliance with military orders. If a servicemember is stationed in a state other than North Carolina and the servicemember’s spouse performs services in North Carolina, that spouse’s earned income is not exempt from North Carolina withholding or North Carolina individual income tax.

North Dakota

If an employee’s wages are exempt from North Dakota income tax because of the Act, the employee must complete Form NDW-M, Exemption from withholding for a qualifying spouse of a U.S. armed forces servicemember; attach a copy dependent military ID card issued by the U.S. Department of Defense; and, provide the completed Form NDW-M with attached copy of the military ID card to the employer.

Employers must mail or fax a copy of the completed Form NDW-M and attached military ID card to:

Attn Withholding Tax Section

Office of State Tax Commissioner

600 E. Blvd. Ave., Dept. 127

Bismarck ND 58505-0599

Or fax it to the Withholding Tax Section at (701) 328-1942

Ohio

An Ohio Department of Taxation information release reminds employers that the spouse of a service member, who is domiciled in a different taxing jurisdiction and is residing in Ohio solely due to the military orders of his/her spouse, is not subject to Ohio tax on income earned for services performed or from sources within Ohio.

South Carolina

Qualifying spouses may file a federal Form W-4 for South Carolina purposes with their employer to claim exemption from withholding. They should write at the top of the form: “Nonresident Military Spouse for State Purposes Only”. This Form W-4 should be provided to the employer and the Department recommends that the spouse also retain a copy for his or her records.

Utah

If the nonresident non-military spouse of a servicemember qualifies for the exclusion of income from Utah tax and is paid as an employee, the spouse should give their employer a federal Form W-4, Employee’s Withholding Allowance Certificate, with the following changes to stop the withholding of Utah tax:

• Mark “Utah Copy” at the top of Form W-4, and

• Write the words “Utah Exempt” in box 7.

The employer should not withhold any Utah income tax on wages paid to the spouse.

Virginia

Qualifying spouses may file the November 2009 version of Form VA-4, Personal Exemption Worksheet, which has been revised to reflect the exemption. Under the Servicemember Civil Relief Act, as amended by the Military Spouses Residency Relief Act, you may be exempt from Virginia income tax on your wages if (i) your spouse is a member of the armed forces present in Virginia in compliance with military orders; (ii) you are present in Virginia solely to be with your spouse; and (iii) you maintain your domicile in another state.

West Virginia

Qualifying spouses may file Form WV IT-104, Withholding Exemption Certificate, with their employer. They must also attach a copy of their “spouse military identification card” to Form WV IT-104.

Wisconsin

Qualifying spouses should file Form W-221, Nonresident Military Spouse Withholding Exemption, with their employer to claim exemption from withholding.

A spouse of a servicemember may be exempt from Wisconsin income tax on wages performed in Wisconsin if (1) the servicemember is present in Wisconsin in compliance with military orders, (2) the spouse is in Wisconsin solely to be with the servicemember, and (3) the spouse maintains a domicile (legal residence) in another state.

Send a copy of the completed form to:

Wisconsin Department of Revenue

Office Services MS 5‑144

PO Box 8906

Madison WI 53708‑8906

Tags:, , , , , , , , , , , , , , , , , , , , , , , , ,
Posted in military, taxes | 1 Comment »

Reissuing Duplicate Form W-2

February 1, 2010

It’s February 1st and the beginning of call season for requests by employees to payroll departments for reissue and corrections to their Form W-2. The reasons vary from “it must be in my hands by January 31st” to “you have my wrong address or “I didn’t know that was my W-2 and misplaced it” Whatever the reason employers are obliged to meet these request; but by what date and manner?

Form W-2

The Form W-2, which is also referred as a “Wage and Tax Statement”, is used as an information return to report wages paid to employees and the taxes withheld from them. The form is also used to report FICA taxes to the Social Security Administration. Relevant amounts on Form W-2 are reported by the Social Security Administration to the Internal Revenue Service. The Form W-2 reports income on a calendar year (January 1 through December 31) basis, regardless of the fiscal year used by the employer or employee for other Federal tax purposes.

IRS Tax Topic 154

In the IRS Tax Topic 154, What to Do If You Are Missing A W-2, the IRS advises employees to “allow a reasonable amount of time for [the employer] to resend or to issue the W-2”. The notice also advises employees to wait until at least February 14th before requesting a duplicate form. The amount of waiting time to begin the reissue process and the frequency of reprints is determined by the employer. Once a request is made by the employee and a duplicate form is not received in a reasonable amount of time, employees have the option of contacting the IRS which will intercede in the resolution of the case.

Instructions for Form W-2

Reissue Fee

The IRS allows employers to charge a “nominal” fee for the issuance of a duplicate Form W-2. Employers should state in their workplace manual any fees for services which can help prevent misunderstandings by employees. More employers are charging a fee for addresses not updated or pass on fees charged by 3rd party vendor contracted to perform W-2 services for employer.

Electronic Forms

Written permission to use and accept electronic forms is only regulated by the IRS on the distribution of the first copy of the W-2 to employees. There are no IRS requirements for receiving consent from the employee to issue a duplicate form to the employee in electronic format.

Reissued Statement

A “reissued statement” must be noted on copies of paper forms and paper copies of electronic forms. If the original form was issued electronically and a duplicate will also be issued electronically, the form does not have to indicate “reissued statement.”

Form W-2 – Employees Copy

Employee Form W-2 consist of three portions, copies B (Employee’s Federal copy), C (Employee’s record), and 2 (Employee’s State, City and Local copy). When reissuing duplicate copies to employees, an exact copy of the original form must be provided. Providing a partial form or the employer’s copy (Copy D) does not fulfill the reissue requirement.

A request form – “Duplicate W-2 Request”

A request form is common practice among employers. The W-2 reissue / duplicate request form would normally contain employees name, current mailing address, city and state, including zip code, and Social Security number; plus contact number. Additional information is collected listing “request reasons” such as never received, misplaced or destroyed, or incorrect name or SSN. With the growing problem of identity theft it is not an unreasonable precaution for employers to require proof of identity or to verify the person making the request. If a request form is the policy of the employer, the employer must make the request form available to employees via fax, mail, e-mail, or in person. In turn, the employer must be able to receive the form in the same manner.

Undeliverable Forms W-2.

Employee copies of Forms W-2 that are returned as undeliverable should be kept for 4 years. However, if the undelivered W-2 can be produced electronically through April 15th of the fourth year after the year of issue, employers do not need to keep undeliverable employee copies.

Tags:, , ,
Posted in taxes | 2 Comments »

Follow

Get every new post delivered to your Inbox.

Join 110 other followers