Vision Payroll

The Internal Revenue Service (IRS) has released an updated version of Publication 15-A, Employer’s Supplemental Tax Guide (Supplement to Publication 15 (Circular E), Employer’s Tax Guide) for use in 2010. Publication 15-A contains information on the following areas:

1. Who Are Employees?
2. Employee or Independent Contractor?
3. Employees of Exempt Organizations
4. Religious Exemptions and Special Rules for Ministers
5. Wages and Other Compensation
6. Sick Pay Reporting
7. Special Rules for Paying Taxes
8. Pensions and Annuities
9. Alternative Methods for Figuring Withholding
10. Tables for Withholding on Distributions of Indian Gaming Profits to Tribal Members

In addition, Publication 15-A provides information on What’s New, Reminders, and Useful Items. Contact Vision Payroll if you have any questions on Publication 15-A.

According to the California Employment Development Department (EDD), employers in the counties of Calaveras and Imperial directly affected by the damage resulting from the severe winter storms may request up to a 60-day extension of time from EDD to file their State payroll reports and/or deposit State payroll taxes without penalty or interest. This extension may be granted under Section 1111.5 of the California Unemployment Insurance Code (CUIC). Written request for extension must be received within 60 days from the original delinquent date of the payment or return to file/pay. Contact Vision Payroll if you’ve been affected and need to file the extension request.

The unemployment rate fell from 10.0% to 9.7% in January, and nonfarm payroll employment was essentially unchanged (-20,000), the US Bureau of Labor Statistics reported recently. Employment fell in construction and in transportation and warehousing, while temporary help services and retail trade added jobs.

In January, the number of unemployed persons decreased to 14.8 million, and the unemployment rate fell by 0.3 percentage points to 9.7%.

In January, unemployment rates for most major worker groups–adult men (10.0%), teenagers (26.4%), blacks (16.5%), and Hispanics (12.6%)–showed little change. The jobless rate for adult women fell to 7.9%, and the rate for whites declined to 8.7% The jobless rate for Asians was 8.4%, not seasonally adjusted.

This release includes new household survey tables with information about employment and unemployment of veterans, persons with a disability, and the foreign born. In January, the unemployment rate of veterans from Gulf War era II (September 2001 to the present) was 12.6%, compared with 10.4% for nonveterans. Persons with a disability had a higher jobless rate than persons with no disability–15.2% versus 10.4%. In addition, the labor force participation rate of persons with a disability was 21.8%, compared with 70.1% for those without a disability. The unemployment rate for the foreign born was 11.8%, and the rate for the native born was 10.3%.

In January, the number of persons unemployed due to job loss decreased by 378,000 to 9.3 million. Nearly all of this decline occurred among permanent job losers.

The number of long-term unemployed (those jobless for 27 weeks and over) continued to trend up in January, reaching 6.3 million. Since the start of the recession in December 2007, the number of long-term unemployed has risen by 5.0 million.

In January, the civilian labor force participation rate was little changed at 64.7%. The employment-population ratio rose from 58.2% to 58.4%.

The number of persons who worked part time for economic reasons (sometimes referred to as involuntary part-time workers) fell from 9.2 to 8.3 million in January. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

About 2.5 million persons were marginally attached to the labor force in January, an increase of 409,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 1.1 million discouraged workers in January, up from 734,000 a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.5 million people marginally attached to the labor force had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

This week’s question comes from Jonathan, an HR director. I compared my Form W-2 to my last pay stub and there are differences between the amounts listed on the Form W-2 and the amounts on my last pay stub. How do I reconcile my W-2 to my last pay stub? Answer: The amounts on the Form W-2 may differ from gross pay on your last pay stub for several reasons. The Vision Payroll web site contains a document that helps employees reconcile their Form W-2 to their last pay stub. Contact Vision Payroll if you have any further questions.

According to the US Department of Labor, in the week ending January 30, the advance figure for seasonally adjusted initial claims was 480,000, an increase of 8,000 from the previous week’s revised figure of 472,000. The 4-week moving average was 468,750, an increase of 11,750 from the previous week’s revised average of 457,000.

The advance seasonally adjusted insured unemployment rate was 3.5% for the week ending January 23, unchanged from the prior week’s unrevised rate of 3.5%.

The advance number for seasonally adjusted insured unemployment during the week ending January 23 was 4,602,000, an increase of 2,000 from the preceding week’s revised level of 4,600,000. The 4-week moving average was 4,617,500, a decrease of 51,250 from the preceding week’s revised average of 4,668,750.

The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.362 million.

COBRA allows eligible individuals to continue employer-provided group health coverage for a specified period due to certain qualifying events, such as job loss. In February 2009, the American Recovery and Reinvestment Act of 2009 (ARRA) was enacted and provided a temporary 65% COBRA (or similar state continuation coverage) premium subsidy for eligible individuals. In December 2009, President Obama signed the Department of Defense Appropriations Act (2010 DOD Act or DDAA), which also amended ARRA.

The law extends the eligibility period, includes a retroactive subsidy extension, and imposes new notice requirements. The notice requirements are necessary so that all eligible employees know and understand the options that are available to them under the 2010 DOD Act. You can also get tax credits for individuals who may not have been previously eligible.

To learn more and get a list of action items that you can use right now, be sure to read the featured article by the HR pros at MyHRSupportCenter, COBRA-ARRA Subsidy Extension and New Requirements. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

Monday, February 15, 2010 will be Washington’s Birthday, a federal holiday. Although the offices of Vision Payroll will be open and payrolls will be processed, most banks will be closed in observance of the holiday.

Payrolls dated February 15 will be paid February 12 unless a previous change in schedule has been submitted. Payrolls submitted after these processing deadlines will be pushed back until the next available processing day. No changes are required for payrolls dated February 18.

The next federal holiday will be Monday, May 31, 2010, Memorial Day. Contact Vision Payroll as soon as possible to make changes to or for questions on your processing schedule.

This is the last in a continuing series on the 2009 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than February 1, 2010. Forms mailed on the due date are considered furnished if properly addressed. Employers unable to meet that deadline may file a request for extension of time to furnish the forms. Today we review Boxes 15 through 20, state and local income tax information.

Employers report state and local tax information in boxes 15 through 20. There is room for two states on each individual form with one state reported above the broken line and one state reported below the broken line. You should report local information in the same manner. If you must report information for more than two states or localities, use a second form. Do not complete federal information on any additional form for the same employee unless it is information that couldn’t fit on the first form or is being reported separately. For the state name, use the two-character abbreviation assigned by the United States Postal Service. The state taxing authority should have assigned the employer’s state ID number to use.

State wages reported in box 16 and local wages in box 18 must be reported according to the reporting requirements of the state or locality and may or may not equal wages reported in box 1, box 3, or box 7.

Although this ends this series on the 2009 Form W-2, Vision Payroll will continue to provide information throughout the year to assist you in the process of gathering data to help ensure an accurate and efficient 2010 year-end reporting season. Contact Vision Payroll with any questions on the 2009 Form W-2.