Vision Payroll

According to the US Department of Labor, in the week ending November 27, the advance figure for seasonally adjusted initial claims was 436,000, an increase of 26,000 from the previous week’s revised figure of 410,000. The 4-week moving average was 431,000, a decrease of 5,750 from the previous week’s revised average of 436,750.

Advance Seasonally Adjusted Insured Unemployment Rate Remains Unchanged

The advance seasonally adjusted insured unemployment rate was 3.4% for the week ending November 20, unchanged from the prior week’s revised rate of 3.4%.

Advance Seasonally Adjusted Insured Unemployment Increases

The advance number for seasonally adjusted insured unemployment during the week ending November 20 was 4,270,000, an increase of 53,000 from the preceding week’s revised level of 4,217,000. The 4-week moving average was 4,288,500, a decrease of 29,250 from the preceding week’s revised average of 4,317,750.

The Internal Revenue Service (IRS) has released the 2010 Form 944, Employer’s ANNUAL Federal Tax Return, and related instructions. Form 944 is designed so the smallest employers (those whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less) will only file once a year instead of every quarter.

Several Changes Have Been Made To the 2010 Form 944

The 2010 Form 944 has several new items. The new items include the following:

Qualified Employer’s Social Security Tax Exemption

Qualified employers are allowed an exemption for their share (6.2%) of social security tax on wages/tips paid to qualified employees after March 31, 2010, and before January 1, 2011.

Qualified Employer’s Social Security Tax Credit

Qualified employers are allowed a credit for their share (6.2%) of social security tax on wages/tips paid to qualified employees after March 18, 2010, and before April 1, 2010.

COBRA Premium Assistance Credit Extended

The credit for COBRA premium assistance payments applies to premiums paid for employees involuntarily terminated between September 1, 2008, and May 31, 2010, and to premiums paid for up to 15 months.

Social Security Wage Base for 2010 and 2011

Do not withhold or pay social security tax after an employee reaches $106,800 in social security wages for the year. There is no limit on the amount of wages subject to Medicare tax.

Advance Payment of Earned Income Credit (EIC)

The option of receiving advance payroll payments of EIC expires on December 31, 2010. Individuals eligible for EIC in 2011 can still claim the credit when they file their federal income tax return. Individuals who receive advance payments of EIC in 2010 must file a 2010 federal income tax return.

Electronic Deposit Requirement

The IRS has issued proposed regulations under §6302 of the Internal Revenue Code of 1986 which provide that beginning January 1, 2011, you must deposit all depository taxes (such as employment tax, excise tax, and corporate income tax) electronically using the Electronic Federal Tax Payment System (EFTPS). Under these proposed regulations, which are expected to be finalized by December 31, 2010, Forms 8109 and 8109-B, Federal Tax Deposit Coupon, cannot be used after December 31, 2010.

Vision Payroll Will File Form 944 for Eligible Taxpayers

Contact Vision Payroll if you have further questions on Form 944.

The Hawai’i Department of Labor and Industrial relations has announced that the taxable wage base will decrease from $34,900 in 2010 to $34,200 for 2011. The contribution rate schedule will change from “D” to “F”.

New Employer Tax Rates to Increase

The tax rates for new employers will increase from 3% to 4%, but the Employment & Training Assessment Rate will remain at 0.1%

Find Out the Wage Base for All States by Visiting the Vision Payroll Unemployment Taxable Wage Base Page

Contact Vision Payroll if you have any questions on the Hawai’i wage base and rate changes or visit our Unemployment Taxable Wage Base page.

According to the California Employment Development Department (EDD), employers in the county of San Bernardino directly affected by the City of Barstow contaminated drinking water supply 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).

San Bernardino County in a Declared State of Emergency Due to High Levels of Perchlorate in the Drinking Water

Written request for extension must be received within 60 days from the original delinquent date of the payment or return to file/pay.

Vision Payroll Can Assist San Bernardino County Clients with Extension Application

Contact Vision Payroll if you’ve been affected and need to file the extension request.

According to the Indiana Department of Workforce Development, Indiana will be a FUTA tax credit reduction state in 2010.

Standard Credit Rate is 5.4% for 2010

Generally, employers who pay their state unemployment tax by the due date for filing Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return receive a credit 5.4% against their Federal Unemployment Tax Act (FUTA) tax. This credit is claimed on Form 940.

FUTA Wage Base is $7,000 for 2010

Since the FUTA wage base is $7,000 for 2010, a maximum tax of $56 per employee is due, calculated as follows:

FUTA Taxable Wage Base
FUTA Taxable Wage Base	$7,000
FUTA Tax Rate	6.2%
Maximum FUTA Tax per Employee Before Credit $434.00	$434
Less: FUTA Tax Credit Reduction ($7,000 X 5.4%)	$378
Maximum Net FUTA Tax per Employee	$56

Employers in Certain States Are Subject To Credit Reduction

Federal law provides for a reduction in the FUTA tax credit when a state has outstanding federal loans for two years. The credit reduction is calculated on Schedule A of Form 940.

Indiana Is Subject To Credit Reduction for First Time

Since Indiana was not a credit reduction state in 2009, the credit reduction rate will be 0.3% for 2010. Adding the credit reduction rate of 0.3% to the normal rate of 0.8% results in an effective FUTA rate of 1.1% for Indiana employers in 2010. The credit reduction will continue to increase by 0.3 percentage points each year until the loan is paid, e.g., 0.6% in 2011, 0.9% in 2012, etc. Adding the credit reduction rate of 0.3% to the normal rate of 0.8% results in an effective FUTA rate of 1.1% for Indiana employers in 2010.

Vision Payroll Will Calculate the Credit Reduction for All Indiana Clients

Contact Vision Payroll if you have any further questions on the Indiana credit reduction.

The Oregon Employment Department has announced an increase in the taxable wage base for 2011. The wage base will increase from $32,100 for 2010 to $32,300 for 2011.

Find Out the Wage Base for All States by Visiting the Vision Payroll Unemployment Taxable Wage Base Page

Contact Vision Payroll if you have any questions on the Oregon unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

This week’s question comes from Roy, a company controller. We received a CP 213 Notice on a Form 5500. The notice requests missing information, but that missing information was supplied with an amended Form 5500. Do we need to respond to a CP 213 notice on an amended Form 5500? Answer: A CP 213 notice is sent to notify filers of a proposed Internal Revenue Service (IRS) penalty due to a late or incomplete Form 5500 or Form 5500-EZ return. Taxpayers that receive a CP 213 should reply to the notice even if an amended Form 5500 has already been filed.

CP 213 Notices Are Sent by the IRS, not DOL

In many instances, there are two letters sent out by the Department of Labor (EFAST Contractor) asking for the missing information or addressing the late-filed return. If there is no response to either of the letters, the return is processed as is, and the information is provided to the IRS. In some other instances, this CP 213 Notice is the first correspondence between the filer and the IRS.

Taxpayers Should Respond Within Thirty Days of Notice

The CP 213 Notice gives the filer thirty days after the date the notice was issued to respond. If you believe you received a CP 213, Proposed Penalty Notice, in error, respond to the notice within thirty days of receipt. In your response, be certain to submit:

• A copy of the CP 213 Notice,
• Any appropriate supporting documents, and
• Evidence that the return was timely filed or a reasonable cause statement, or
• Evidence that the return was corrected with an amended return.

Mail Response To Ogden Accounts Management Center

Send your responses by certified mail or a traceable private delivery service to the following address:

Ogden Accounts Management Center
EP Accounts Unit, Mail Stop 6270
Ogden, UT 84201

Contact Vision Payroll for Further Information

Contact Vision Payroll if you need assistance responding to a CP 213 notice sent in error.

According to the US Department of Labor, in the week ending November 20, the advance figure for seasonally adjusted initial claims was 407,000, a decrease of 34,000 from the previous week’s revised figure of 441,000. The 4-week moving average was 436,000, a decrease of 7,500 from the previous week’s revised average of 443,500.

Advance Seasonally Adjusted Insured Unemployment Rate Decreases

The advance seasonally adjusted insured unemployment rate was 3.3% for the week ending November 13, a decrease of 0.1 percentage points from the prior week’s unrevised rate of 3.4%.

Advance Seasonally Adjusted Insured Unemployment Decreases

The advance number for seasonally adjusted insured unemployment during the week ending November 13 was 4,182,000, a decrease of 142,000 from the preceding week’s revised level of 4,324,000. The 4-week moving average was 4,309,000, a decrease of 51,500 from the preceding week’s revised average of 4,360,500.

The Employee Benefits Security Administration (EBSA)has given notice that it will hold a hearing to consider issues relating to the disclosure of fee, conflict of interest and other information by service providers to group health, disability, severance and other employee welfare benefit plans under §408(b)(2) of the Employee Retirement Income Security Act (ERISA).

Hearing to Be Held in Washington, DC

The hearing will be held on December 7, 2010, beginning at 9 am, EST, at the US Department of Labor, Room S-4215 (A-C), 200 Constitution Avenue, NW, Washington, DC 20210.

Meeting Agenda Has Been Released

The agenda for the hearing on disclosure of fees and expenses to welfare plan fiduciaries has been released and is available for download from the Vision Payroll website.

The Pennsylvania Department of Labor & Industry has announced the taxable wage base for 2011. The wage base will remain at $8,000 for 2011.

Wage Base Does Not Apply To Employee Withholding

Pennsylvania employees are subject to withholding for unemployment tax. The withholding rate of 0.08% of taxable wages will not change from 2010. There is no wage base for withholding, however; all taxable wages are subject to withholding at this rate.

Find Out the Wage Base for All States by Visiting the Vision Payroll Unemployment Taxable Wage Base Page

Contact Vision Payroll if you have any questions on Pennsylvania unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.