Vision Payroll

According to the California Employment Development Department (EDD), employers in the county of Kern directly affected by the fires 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.

This week’s question comes from Angela, an office manager. We tested our multi-state employees for unemployment purposes based on Localization of Services. For some employees we were able to determine the appropriate state, but for some we weren’t. Now we need to test based on Base of Operations. What is Base of Operations? Answer: The general rule for employees who work in more than one state is that employees should be covered by only one state to prevent employers from paying tax in two or more states for the same employee. To determine which state, employers should look at four factors, in the following order:

1. Localization of Services
2. Base of Operations
3. Place of Direction or Control
4. Place of Residence

The employee is covered by the state under which that employee first qualifies using these factors. For example, if an employee is determined to be covered by a state under the Localization of Services test, the results of the remaining tests are irrelevant. Only if a determination cannot be made under the Localization of Services test does the employer consider the Base of Operations.

For the Base of Operations test, determine if the employee performs some services in the state that is the base of operations for that employee. The base of operations is where the employee starts work, goes to receive instructions from the employer, replenishes supplies, maintains records, etc. Not all employees necessarily have a base of operations. If the employee performs some services in the state that is the base of operations for that employee, that state is the state where the employee will be covered. If not, go to the Place of Direction or Control test.

Contact Vision Payroll if you have further questions.

According to the US Department of Labor, in the week ending July 24, the advance figure for seasonally adjusted initial claims was 457,000, a decrease of 11,000 from the previous week’s revised figure of 468,000. The 4-week moving average was 452,500, a decrease of 4,500 from the previous week’s revised average of 457,000.

The advance seasonally adjusted insured unemployment rate was 3.6% for the week ending July 17, an increase of 0.1 percentage points from the prior week’s unrevised rate of 3.5%.

The advance number for seasonally adjusted insured unemployment during the week ending July 17 was 4,565,000, an increase of 81,000 from the preceding week’s revised level of 4,484,000. The 4-week moving average was 4,548,250, a decrease of 18,000 from the preceding week’s revised average of 4,566,250.

The fiscal year-to-date average of seasonally adjusted weekly insured unemployment, which corresponds to the appropriated AWIU trigger, was 5.037 million.

Starting a new business can be an exciting and challenging time. Writing a business plan, picking a name, deciding how to finance, choosing a location, hiring your employees, and many more decisions can be stressful for entrepreneurs. If you’re starting a new business, the Internal Revenue Service (IRS), in IRS Summertime Tax Tip 2010-05, lists the following six tax tips:

1. First, you must decide what type of business entity you are going to establish. The type of business entity will determine which tax form you have to file. The most common types of business are the sole proprietorship, partnership, corporation and S corporation.
2. The type of business you operate determines what taxes you must pay and how you pay them. The four general types of business taxes are income tax, self-employment tax, employment tax and excise tax.
3. An Employer Identification Number is used to identify a business entity. Generally, businesses need an EIN. Visit IRS.gov for more information about whether you will need an EIN. You can also apply for an EIN online at IRS.gov.
4. Good records will help you ensure successful operation of your new business. You may choose any recordkeeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes.
5. Every business taxpayer must figure taxable income on an annual accounting period called a tax year. The calendar year and the fiscal year are the most common tax years used.
6. Each taxpayer must also use a consistent accounting method, which is a set of rules for determining when to report income and expenses. The most commonly used accounting methods are the cash method and an accrual method. Under the cash method, you generally report income in the tax year you receive it and deduct expenses in the tax year you pay them. Under an accrual method, you generally report income in the tax year you earn it and deduct expenses in the tax year you incur them.

Vision Payroll works with clients as diverse as brand new start-ups and billion dollar companies. If you’re starting a new business, contact us today for all your payroll and human resources needs.

The Massachusetts Division of Occupational Safety (DOS) issues prevailing wage schedules to cities, towns, counties, districts, authorities, and agencies of the Commonwealth for construction projects and several other types of public work. These prevailing wage schedules contain hourly wage rates that workers must receive when working on a public project.

The DOS regularly issues Prevailing Wage Opinion Letters and recently released PW-2010-09-07.20.10. This letter confirms “the job classification under the Massachusetts Prevailing Wage Law for workers who repair and replace components of source capture vehicle exhaust systems in public works projects at various fire stations.” The following categories of tasks were at issue:

1. The workers repair and replace “nozzles” and “pneumatic grabbers” which provide an airtight connection between the system and the vehicle exhaust pipe.
2. The workers repair and replace “airlines” which are housed inside the “system exhaust hose.” The “airlines” are connected to the grabber and facilities the air-tight fit, as well as facilitate the extraction of the exhaust fumes from the building via the system.
3. The workers repair and replace “upper exhaust hoses” and “lower exhaust hoses” on the system, which house the inner airlines, and connect the pneumatic grabber to the system duct work.
4. The workers repair and replace “uncoupling valves” and “quick release fittings” on the system, which facilitates the disconnection of the system from the vehicle, when the vehicle exits the fire station.
5. The workers repair and replace the “regulator”, which regulates the air flow.
6. The workers repair and replace the “balancer”, which keeps the hose elevated above the floor.
7. The workers repair and replace “shut off valves”, “pressure switch”, “compressors”, “pressure sensors”, “chrome elbows”, “five horse power motors”, safety disconnect mechanisms, “back draft dampers”, “drain cocks”, and various other components.
8. The workers repair and replace sheet metal duct work and/or fittings.

The DOS concluded that “the repair and replacement of components of source capture vehicle exhaust systems work, as described herein, is paid at the rate for ‘Sheet metal worker’ as indicated on the rate sheet”.

Vision Payroll is ready to assist employers in gathering information for certified weekly payroll reports. Vision Payroll can also prepare the certified weekly payroll reports for submission to the proper authorities. Contact Vision Payroll today to get started.

Due to the severe storms, flooding, and mudslides in Kentucky beginning July 17, 2010, President Barack Obama declared the following counties a federal disaster area: Carter, Lewis, Madison, Mason, Pike, and Rowan. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after July 16, 2010 and before August 3, 2010 as long as the deposits are made by August 2, 2010. In addition, affected taxpayers will have until September 15, 2010 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms, flooding, and mudslides and need further information on the relief provided by the IRS.

The Commonwealth of Virginia announced new electronic filing requirements, beginning January 1, 2011. The changes reduce the number of employee statements that may be filed on paper and the method by which taxpayers may file.

Legislation effective January 1, 2011 requires employers who furnish 150 or more employee withholding statements for calendar year 2010 to file their W-2 statements electronically. Employers with less than 150 employee W-2s may continue to file these on paper; however, we encourage you to file electronically also. In addition, the Department of Taxation (TAX) will no longer support the Magnetic Media method of filing W-2s for tape as of October 1, 2010, and for CD and diskette as of January 1, 2011.

Employers required to file W-2s electronically and those with less than 150 employees that choose to file their W-2s electronically must use Web Upload to submit W-2 information to TAX.

Contact Vision Payroll if you have any questions on the new requirements.

The Massachusetts Division of Occupational Safety (DOS) issues prevailing wage schedules to cities, towns, counties, districts, authorities, and agencies of the Commonwealth for construction projects and several other types of public work. These prevailing wage schedules contain hourly wage rates that workers must receive when working on a public project.

The DOS regularly issues Prevailing Wage Opinion Letters and from time to time updates the related Topical Outline of Massachusetts Prevailing Wage Law. Information is available on many topics related to prevailing wage, including certified weekly payroll reports. In addition to discussion on the various topics, references are included to opinion letters that explain the topic in further detail.

Vision Payroll is ready to assist employers in gathering information for certified weekly payroll reports. Vision Payroll can also prepare the certified weekly payroll reports for submission to the proper authorities. Contact Vision Payroll today to get started.

This week’s question comes from Matthew, a business owner. I read that we need to cover employees for unemployment purposes based on “Localization of Services”. What is Localization of Services? Answer: The general rule for employees who work in more than one state is that employees should be covered by only one state to prevent employers from paying tax in two or more states for the same employee. To determine which state, employers should look at four factors, in the following order:

1. Localization of Services
2. Base of Operations
3. Place of Direction or Control
4. Place of Residence

The employee is covered by the state under which that employee first qualifies using these factors. For example, if an employee is determined to be covered by a state under the Localization of Services test, the results of the remaining tests are irrelevant. Only if a determination cannot be made under the Localization of Services test does the employer consider the Base of Operations.

For the Localization of Services test, first determine if the employee performs all services entirely in one state. If yes, that state is the state where the employee will be covered. If not, determine if the services performed out of any state where the employee works are incidental (e.g., temporary or transitory) to the services performed in that state. If yes, that state is the state where the employee will be covered. If not, go to the Base of Operations test.

Contact Vision Payroll if you have further questions.

According to the US Department of Labor, in the week ending July 17, the advance figure for seasonally adjusted initial claims was 464,000, an increase of 37,000 from the previous week’s revised figure of 427,000. The 4-week moving average was 456,000, an increase of 1,250 from the previous week’s revised average of 454,750.

The advance seasonally adjusted insured unemployment rate was 3.5% for the week ending July 10, a decrease of 0.2 percentage points from the prior week’s unrevised rate of 3.7%.

The advance number for seasonally adjusted insured unemployment during the week ending July 10 was 4,487,000, a decrease of 223,000 from the preceding week’s revised level of 4,710,000. The 4-week moving average was 4,567,000, a decrease of 21,500 from the preceding week’s revised average of 4,588,500.

The fiscal year-to-date average of seasonally adjusted weekly insured unemployment, which corresponds to the appropriated AWIU trigger, was 5.046 million.