Vision Payroll

Due to the severe storms, flooding, mudslides and landslides in West Virginia beginning June 12, 2010, President Barack Obama declared the following counties a federal disaster area: Lewis, Logan, McDowell, Mingo, and Wyoming. Therefore, the Internal Revenue Service (IRS) announced recently that it will waive failure to deposit penalties for employment and excise taxes due after June 11, 2010 and before June 29, 2010 as long as the deposits were made by June 28, 2010. In addition, affected taxpayers will have until August 11, 2010 to file most tax returns. Contact Vision Payroll if you were affected by the severe storms, flooding, mudslides and landslides and need further information on the relief provided by the IRS.

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 past several weeks, Vision Payroll has provided information on the Small Business Health Care Tax Credit. Today’s topic is Transition Relief for Employers That Do Not Pay at Least Fifty Percent of the Premium.

The Internal Revenue Service (IRS) expects to issue transition relief that will allow employers that otherwise qualify to claim the credit even if those employers do not pay at least 50% of the premium cost for all employees. Employers are required to pay at least 50% of the cost for single coverage. For employees with more expensive coverage, such as family coverage, employers that otherwise qualify to claim the credit will qualify as long as they pay at least 50% of the premium cost for single coverage toward the more expensive coverage. Therefore, employers might still qualify even if they pay less than 50% of the cost of the more expensive coverage.

This concludes this series on the Small Business Health Care Tax Credit. Contact Vision Payroll if you have further questions on Transition Relief for Employers That Do Not Pay at Least Fifty Percent of the Premium or the Small Business Health Care Tax Credit.

This week’s question comes from Cliff, a sole proprietor. I am forming a corporation and will be converting from a sole proprietorship to a corporation. Do I need a separate EIN for my corporation? Answer: The new corporation is a distinct entity from the sole proprietorship and will require the corporation to apply for a new employer identification number (EIN). Taxpayers may use Form SS-4, Application for Employer Identification Number, to apply for a new EIN or visit the IRS website to apply online. Contact Vision Payroll if you have any further questions on the payroll tax implications of forming a corporation.

According to the US Department of Labor, in the week ending July 3, the advance figure for seasonally adjusted initial claims was 454,000, a decrease of 21,000 from the previous week’s revised figure of 475,000. The 4-week moving average was 466,000, a decrease of 1,250 from the previous week’s revised average of 467,250.

The advance seasonally adjusted insured unemployment rate was 3.4% for the week ending June 26, a decrease of 0.2 percentage points from the prior week’s unrevised rate of 3.6%.

The advance number for seasonally adjusted insured unemployment during the week ending June 26 was 4,413,000, a decrease of 224,000 from the preceding week’s revised level of 4,637,000. The 4-week moving average was 4,554,000, a decrease of 18,750 from the preceding week’s revised average of 4,572,750.

The fiscal year-to-date average of seasonally adjusted weekly insured unemployment, which corresponds to the appropriated AWIU trigger, was 5.064 million.

Continuing to face a slow economy, many small businesses have tightened their budgets while many students (as well as individuals considering new careers) may look towards internships to gain experience for little or no pay. The US Department of Labor (DOL), however, has been increasing its wage and hour enforcement efforts and is expected to do more so this summer. Last April, the DOL issued new regulations to remind employers of the difference between interns and employees (who are unlawfully not being paid). Simply put, employers cannot avoid the requirements of federal law by simply labeling employees as “interns” or “trainees” to minimize costs.

Do you know the six criteria the DOL has set to discourage employers from taking advantage of inappropriately classifying interns? What are the questions to ask about your internship program to help ensure you have a valid and properly classified internship position? What are the three key factors to keep in mind when considering an internship program at your company?

For answers to these questions and much more, be sure to read the featured article by the HR pros at MyHRSupportCenter, DOL Eyeing Employers’ Internship Programs. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

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 several weeks, Vision Payroll will be providing further information on the Small Business Health Care Tax Credit. Today’s topic is Transition Relief for Employers That Do Not Pay a Uniform Percentage.

The Internal Revenue Service (IRS) expects to issue transition relief that will allow employers that otherwise qualify to claim the credit even if those employers do not pay a uniform percentage for all enrolled employees. As long as the employer pays at least 50% of the premium cost for each enrolled employee, the percentage paid will not need to be uniform for all employees.

The final topic to be covered in this series is Transition Relief for Employers That Do Not Pay at Least Fifty Percent of the Premium. Contact Vision Payroll if you have further questions on Transition Relief for Employers That Do Not Pay a Uniform Percentage.

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 several weeks, Vision Payroll will be providing further information on the Small Business Health Care Tax Credit. Today’s topic is Impact of the Small Business Health Care Tax Credit on Employment Tax Payments.

Employers may not reduce the amount of employment tax payments paid and use the Small Business Health Care Tax Credit to offset the taxes not paid. Federal employment taxes include both those imposed on the employer and those imposed on the employee. They include federal unemployment tax, the employer portion of Old-Age Survivors and Disability Insurance (OASDI) tax, also known as social security and Medicare, federal income tax withheld, social security tax withheld, and Medicare tax withheld. The Small Business Health Care Tax Credit may only offset income tax.

The next topic to be covered in this series is Transition Relief for Employers That Do Not Pay a Uniform Percentage. Contact Vision Payroll if you have further questions on Impact of the Small Business Health Care Tax Credit on Employment Tax Payments.

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 several weeks, Vision Payroll will be providing further information on the Small Business Health Care Tax Credit. Today’s topic is Impact of the Small Business Health Care Tax Credit on Deductions for Health Insurance Premiums.

The amount of premiums that can be deducted on the employer’s federal income tax return must be reduced by the amount of the Small Business Health Care Tax Credit.

The next topic to be covered in this series is Impact of the Small Business Health Care Tax Credit on Employment Tax Payments. Contact Vision Payroll if you have further questions on Impact of the Small Business Health Care Tax Credit on Deductions for Health Insurance Premiums.

Total nonfarm payroll employment declined by 125,000 in June, and the unemployment rate edged down to 9.5 %, the US Bureau of Labor Statistics reported recently. The decline in payroll employment reflected a decrease (-225,000) in the number of temporary employees working on Census 2010. Private-sector payroll employment edged up by 83,000.

Both the number of unemployed persons, at 14.6 million, and the unemployment rate, at 9.5%, edged down in June.

Among the major worker groups, the unemployment rate for adult women (7.8%) declined, while the rates for adult men (9.9%), teenagers (25.7%), whites (8.6%), blacks (15.4%), and Hispanics (12.4%) showed little or no change. The jobless rate for Asians was 7.7%, not seasonally adjusted.

In June, the number of long-term unemployed (those jobless for 27 weeks and over) was unchanged at 6.8 million. These individuals made up 45.5% of unemployed persons.

The civilian labor force participation rate fell by 0.3 percentage point in June to 64.7%. The employment-population ratio, at 58.5%, edged down over the month.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 8.6 million, was little changed over the month but was down by 525,000 over the past 2 months. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

In June, about 2.6 million persons were marginally attached to the labor force, an increase of 415,000 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 1.2 million discouraged workers in June, up by 414,000 from 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 1.4 million persons 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 Aaron, a business owner. We have several employees who work in Massachusetts, but live in neighboring states. Do I need to withhold state tax on wages paid to non-residents? Answer: Massachusetts requires employers to withhold state tax from wages paid to non-residents for services performed in Massachusetts. Most states have similar requirements that employers withhold tax on non-residents, but some states do not require withholding until a certain time or dollar limits are reached. Additionally, some states have setup reciprocal agreements with other states that allow the employees to be taxed in their home states. Massachusetts (and many other states) has special rules for unique occupations such as athletes, entertainers, and flight crewmembers. Contact Vision Payroll for further information on your unique situation.