Vision Payroll

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a payroll tax credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS reviewed elected officials eligibility for the premium subsidy. The important distinction is whether or not the elected official is considered involuntarily terminated. The IRS considered three situations, as follows:

1. An elected official who runs for reelection, but is not reelected is considered involuntarily terminated.
2. An elected official prohibited by term limits from running for reelection is considered involuntarily terminated.
3. An elected official who does not run for reelection, but is eligible to do so, is not considered involuntarily terminated, even if the elected official did not run due to illness.

Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

This week’s question comes from Mark, a partner in a partnership. I’ve just been made a partner in a partnership. As an employee, I was participating in the company’s Flexible Spending Arrangement (FSA) plan. I’ve been told I can no longer participate. Can a partner participate in an FSA? Answer: FSAs, sometimes called “Flexible Spending Accounts”, are generally setup for reimbursement of medical or dependent care expenses. Partners in a partnership (including LLCs and other similar entities that have elected to be treated as a partnership for tax purposes) are considered self-employed individuals. As such, they are not eligible to participate in an FSA sponsored by the partnership in which they are a partner. Contact Vision Payroll if you have further questions on FSA eligibility.

According to the US Department of Labor, in the week ending June 13, the advance figure for seasonally adjusted initial claims was 608,000, an increase of 3,000 from the previous week’s revised figure of 605,000. The 4-week moving average was 615,750, a decrease of 7,000 from the previous week’s revised average of 622,750.

The advance seasonally adjusted insured unemployment rate was 5.0% for the week ending June 6, a decrease of 0.1 percentage points from the prior week’s unrevised rate of 5.1%.

The advance number for seasonally adjusted insured unemployment during the week ending June 6 was 6,687,000, a decrease of 148,000 from the preceding week’s revised level of 6,835,000. The 4-week moving average was 6,757,500, an increase of 2,250 from the preceding week’s revised average of 6,755,250.

The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.286 million.

Most employers are familiar with the Worker Adjustment and Retraining Notification (WARN) Act. Because of the minimum employee levels, sporadic enforcement, and relatively mild penalties, many employers have not concerned themselves with it. Do you know what sets state laws in Michigan and Minnesota apart from other states? Do you know which states have recently enacted mini-WARN statutes? Do you know which state bills companies for re-employment assistance?

Learn the answers to these questions and also what you need to know about the Federal Oversight, Reform, and Enforcement of the WARN Act (FOREWARN Act) in this month’s HRCast, a recording provided by our team of HR Pros and available exclusively on MyHRSupportCenter. You’ll learn how the FOREWARN Act will change the definitions of affected employers, minimum layoffs, and the notice period. Also learn about when potential double penalties may be imposed and how the Secretary of Labor’s rôle could change.

Visit MyHRSupportCenter regularly not only for our HRCasts, but also to get late-breaking compliance alerts, best practices to implement, and HR tools to use every day. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS confirmed that an employee “hired only for a limited period such as a seasonal worker or a teacher hired only for one school year” is considered involuntarily terminated for premium subsidy purposes if the employee works to the end of season or contract period, is not offered employment, and is able and willing to work. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

The California Franchise Tax Board (FTB) recently recommended that taxpayers review their withholding due to changes in the state personal income tax laws. Recent changes increased the tax rates by 0.25% and reduced the dependent exemption credit. Tax tables have been amended to reflect the change in tax rates, but only prospectively. They have not been amended to reflect the change in the dependent exemption credits. Therefore, the FTB is recommending taxpayers complete a new California Form DE-4, Employee’s Withholding Allowance Certificate, to adjust their withholding if necessary. Employers who receive a revised Form DE-4 should update their payroll records online or contact Vision Payroll with the updated information.

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS stated that if an insurer is providing continuation coverage under a comparable state law, the coverage still qualifies for premium subsidy even if the group health plan has terminated after the employer has gone out of business. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS stated that when an employer voluntarily provides continuation coverage when the plan is not subject to “COBRA continuation coverage”, then the subsidy does not apply to the voluntary coverage. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

This week’s question comes from Brad, a sole proprietor. My 16-year-old daughter will be out of school soon and I’d like to hire her for the summer in my sole proprietorship. Does a sole proprietor have to pay payroll taxes on children’s wages? Answer: Sole proprietors who hire their own children under age 18 do not have to pay federal employment taxes on the children’s wages. The children are exempt from having to pay social security and Medicare taxes on their wages. These taxes are sometimes known as FICA (Federal Insurance Contributions Act) or OASDI (Old-Age, Survivors, and Disability Insurance). The employer is also exempt from paying the matching portion of these taxes. Additionally, the employer is not required to pay FUTA (Federal Unemployment Tax Act) tax on these wages. Most states also exempt such wages from state unemployment tax (SUTA). Depending on their expected income, children of sole proprietors may be subject to federal and state income tax withholding. Contact Vision Payroll if you have any questions on payroll taxes on children.

According to the US Department of Labor, in the week ending June 6, the advance figure for seasonally adjusted initial claims was 601,000, a decrease of 24,000 from the previous week’s revised figure of 625,000. The 4-week moving average was 621,750, a decrease of 10,500 from the previous week’s revised average of 632,250.

The advance seasonally adjusted insured unemployment rate was 5.1% for the week ending May 30, unchanged from the prior week’s revised rate of 5.1%.

The advance number for seasonally adjusted insured unemployment during the week ending May 30 was 6,816,000, an increase of 59,000 from the preceding week’s revised level of 6,757,000. The 4-week moving average was 6,750,500, an increase of 57,250 from the preceding week’s revised average of 6,693,250.

The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.238 million.