Vision Payroll

The Internal Revenue Service (IRS) recently released a revised Form 941, Employer’s QUARTERLY Federal Tax Return, to be used by employers to claim payroll tax forgiveness under the HIRE Act for qualifying new hires. Newly added lines on Form 941 include the following:

• Line 6a – Number of qualified employees first paid exempt wages/tips this quarter
• Line 6b – Number of qualified employees paid exempt wages/tips this quarter
• Line 6c – Exempt wages/tips paid to qualified employees this quarter
• Line 6d – Payroll tax forgiveness this quarter
• Line 12c – Number of qualified employees paid exempt wages/tips March 19–31
• Line 12d – Exempt wages/tips paid to qualified employees March 19–31
• Line 12e – Payroll tax forgiveness March 19-31

Lines 12c, 12d, and 12e will be on the Form 941 for the third and fourth quarters, but are applicable only for the second quarter. Contact Vision Payroll if you have any questions on the revised Form 941.

Due to the severe storms, tornadoes and straight-line winds in Oklahoma beginning May 10, 2010, President Barack Obama declared the following counties a federal disaster area: Carter, Cleveland, Creek, Garvin, McIntosh, Okfuskee, Oklahoma, Pottawatomie and Seminole. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after May 9, 2010 and before May 26, 2010 as long as the deposits were made by May 25, 2010. In addition, affected taxpayers will have until July 9, 2010 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms, tornadoes and straight-line winds and need further information on the relief provided by the IRS.

The recently enacted Patient Protection and Affordable Care Act (the Act) will expand information reporting requirements starting in 2012. §9005 of the Act amends §6041 of the Internal Revenue Code of 1986 (IRC) so that payments to corporations that were previously exempted from reporting will now be subject to reporting on Form 1099. Additionally, information reporting will now be required for purchases of property. Therefore, businesses that pay a single entity $600 or more in a calendar year for purchases of goods and services will be required to report those payments on Form 1099.

Under the law, the IRS was granted the authority to issue so-called legislative regulations to “prevent duplicative reporting of transactions.” Since under a different provision also effective in 2012 payment processors will be required to report gross amounts paid to companies using debit and credit cards, IRS Commissioner Douglas H Shulman indicated in a recent speech that transactions that use credit or debit cards might be exempted from these reporting requirements.

Vision Payroll strongly recommends that businesses begin their implementation plan now to be ready to report under the new requirements and to be ready to reconcile the forms received from their customers. Vision Payroll is ready now to work with businesses on their implementation plan and will assist them in filing the necessary forms.

This week’s question comes from Mike, a small-business owner. We have hired some employees whose native language is Spanish. They are better able to understand forms in Spanish than they are in English. We need them to complete Form W-11 in order to claim payroll tax forgiveness on Form 941. Is there a Spanish Form W-11 available? Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit, is used to certify worker eligibility for payroll tax forgiveness under the HIRE Act. At the present time, the Internal Revenue Service (IRS) has not released a Spanish version of Form W-11. Contact Vision Payroll if you have any further questions on Form W-11.

***Please see updated information regarding the release of the Spanish version of Form W-11.

According to the US Department of Labor, in the week ending May 22, the advance figure for seasonally adjusted initial claims was 460,000, a decrease of 14,000 from the previous week’s revised figure of 474,000. The 4-week moving average was 456,500, an increase of 2,250 from the previous week’s revised average of 454,250.

The advance seasonally adjusted insured unemployment rate was 3.6% for the week ending May 15, unchanged from the prior week’s unrevised rate of 3.6%.

The advance number for seasonally adjusted insured unemployment during the week ending May 15 was 4,607,000, a decrease of 49,000 from the preceding week’s revised level of 4,656,000. The 4-week moving average was 4,637,250, a decrease of 11,500 from the preceding week’s revised average of 4,648,750.

The fiscal year-to-date average of seasonally adjusted weekly insured unemployment, which corresponds to the appropriated AWIU trigger, was 5.134 million.

In IR-2010-065, the Internal Revenue Service (IRS) announced that interest rates for the third quarter of 2010 would remain unchanged from the second quarter. The rates are as follows:

• Four (4) percent for overpayments [three (3) percent in the case of a corporation];
• Four (4) percent for underpayments;
• Six (6) percent for large corporate underpayments; and
• One and one-half (1.5) percent for the portion of a corporate overpayment exceeding $10,000.

The IRS will publish the rates in Revenue Ruling 2010-14. Contact Vision Payroll if you have any questions on the third quarter rates.

The Internal Revenue Service (IRS) recently released Rev. Proc. 2010-22, which contained the 2011 inflation adjusted amounts for Health Savings Accounts or HSAs. Since the changes in the Consumer Price Index for the relevant period do not result in changes to the amounts in 2011, the amounts will stay the same as in 2010.

The annual limitation on deductions will remain at $3,050 in 2011 for those with self-only coverage. Those with family coverage will have the deduction limitation stay at $6,150.

The definition of a high deductible health plan will see no change from one with a minimum deductible of $1,200 in 2011 for self-only coverage and $2,400 for family coverage.

The annual out-of-pocket limitation for 2011 also will not increase from $5,950 for those with self-only coverage; the out-of-pocket limitation for family coverage remains at $11,900.

Contact Vision Payroll if you have any questions on Rev. Proc. 2010-22 and the amounts for HSAs in 2011.

The new health reform law gives a tax credit to certain small employers that provide health care coverage to their employees, effective with tax years beginning in 2010. Over the next several weeks, Vision Payroll will be providing further information on the Small Business Health Care Tax Credit. Today’s topic is Claiming the Small Business Health Care Tax Credit.

The Small Business Health Care Tax Credit will be claimed by employers, other than tax-exempt employers, on their annual income tax return.

The next topic to be covered in this series is Claiming the Small Business Health Care Tax Credit Without Taxable Income. Contact Vision Payroll if you have further questions on Claiming the Small Business Health Care Tax Credit.

Due to the severe storms, flooding, and tornadoes in Mississippi beginning May 1, 2010, President Barack Obama declared the following counties a federal disaster area: Alcorn, Benton, Lafayette, Tippah and Tishomingo. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after April 30, 2010 and before May 18, 2010 as long as the deposits are made by May 17, 2010. In addition, affected taxpayers will have until June 30, 2010 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms, flooding, and tornadoes and need further information on the relief provided by the IRS.

Due to the severe storms, flooding, mudslides and tornadoes in Kentucky beginning May 1, 2010, President Barack Obama declared the following counties a federal disaster area: Adair, Allen, Anderson, Barren, Bath, Bourbon, Boyd, Boyle, Butler, Carter, Casey, Christian, Clark, Clinton, Crittenden, Cumberland, Edmonson, Elliott, Estill, Fayette, Fleming, Franklin, Garrard, Green, Greenup, Hardin, Hart, Henry, Hopkins, Jackson, Jessamine, Larue, Lee, Leslie, Lewis, Lincoln, Livingston, Logan, Madison, Magoffin, Marion, Menifee, Mercer, Metcalfe, Monroe, Montgomery, Nelson, Nicholas, Ohio, Owen, Powell, Pulaski, Rockcastle, Rowan, Russell, Simpson, Taylor, Warren, Washington, Wayne, Wolfe and Woodford. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after April 30, 2010 and before May 18, 2010 as long as the deposits are made by May 17, 2010. In addition, affected taxpayers will have until June 30, 2010 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms, flooding, mudslides and tornadoes and need further information on the relief provided by the IRS.