Vision Payroll

According to the US Department of Labor, in the week ending May 1, the advance figure for seasonally adjusted initial claims was 444,000, a decrease of 7,000 from the previous week’s revised figure of 451,000. The 4-week moving average was 458,500, a decrease of 4,750 from the previous week’s revised average of 463,250.

The advance seasonally adjusted insured unemployment rate was 3.6% for the week ending April 24, unchanged from the prior week’s unrevised rate of 3.6%.

The advance number for seasonally adjusted insured unemployment during the week ending April 24 was 4,594,000, a decrease of 59,000 from the preceding week’s revised level of 4,653,000. The 4-week moving average was 4,649,000, an increase of 8,000 from the preceding week’s revised average of 4,641,000.

The fiscal year-to-date average of seasonally adjusted weekly insured unemployment, which corresponds to the appropriated AWIU trigger, was 5.183 million.

In Rev. Rul. 2010-13, Average Premium for Small Group Market for Determining the Small Employer Health Insurance Credit, the Internal Revenue Service (IRS) and the Department of Health and Human Services (HHS) released the chart containing the small group market in each state for the 2010 taxable year. Under the health care reform, employers are allowed a credit in certain situations if they pay a portion of their employees’ health insurance premiums. The credit is limited to the lesser of:

1. The amount of nonelective contributions paid by the eligible small employer on behalf of employees under the arrangement during the taxable year, and
2. The amount of nonelective contributions the employer would have paid under the arrangement if each such employee were enrolled in a plan that had a premium equal to the average premium for the small group market in the state (or in an area in the state) in which the employer is offering health insurance coverage.

The State of Idaho had the lowest rates at $4,215 for employee-only coverage and $9,365 for family coverage while the Commonwealth of Massachusetts had the highest rates at $5,700 and $14,138, respectively. Family coverage includes any coverage other than employee-only (or single) coverage.

According to Rev. Rul. 2010-13:

HHS recognizes that there may be areas in some States with meaningfully higher premium rates. For the 2010 taxable year, HHS may provide additional average premium rates for the small group market in certain areas within States. However, in no case will any such additional sub-State rates be lower than the applicable rate for each State that is set forth in this Revenue Ruling.

Contact Vision Payroll for further information on the average premium for the small group markets during 2010.

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 Employers in a Controlled Group or an Affiliated Service Group.

The aggregation rules of §414(b), (c), (m), and (o) apply so that controlled groups of corporation, businesses under common control, and affiliated service groups will be treated as a single employer for this purpose. Therefore, all employees of the controlled group or affiliated service group, and all wages paid to employees by the controlled group or affiliated service group, are counted in determining whether any member of the controlled group or affiliated service group is a qualified employer.

The next topic to be covered in this series is Claiming the Small Business Health Care Tax Credit. Contact Vision Payroll if you have further questions on Employers in a Controlled Group or an Affiliated Service Group.

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 the Impact of Owners and Relatives.

Most owners and their relatives and not counted for either the calculation of full-time equivalent employees or average annual wages. The following are excluded from both calculations:

• Sole-proprietors
• Partners
• 2% S corporation shareholders
• 5% owners within the meaning of §416
• Family members or dependents of any one of these first four groups of individuals

For this purpose, a family member is defined as a child (or descendant of a child); a sibling or step-sibling; a parent (or ancestor of a parent); a step-parent; a niece or nephew; an aunt or uncle; or a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law.

The next topic to be covered in this series is Employers in a Controlled Group or an Affiliated Service Group. Contact Vision Payroll if you have further questions on the Impact of Owners and Relatives.

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 the Impact of Seasonal Employees.

Seasonal employees who do not work for the employer more than 120 days during the taxable year are excluded in the calculation of full-time equivalent employees. Seasonal employees in this sense are seasonal employees as defined by the Secretary of Labor and retail workers employed exclusively during holiday seasons. Any time worked on a calendar day is counted as a day of work.

The next topic to be covered in this series is the Impact of Owners and Relatives. Contact Vision Payroll if you have further questions on the Impact of Seasonal Employees.

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 the Impact of the Twenty-five or More Employees.

Employers with twenty-five or more employees may still qualify for the credit because the credit is based on the number of full-time equivalents (FTEs), not the actual number of employees. An employer with forty-six employees who work 1,040 hours each would only have twenty-three FTEs and could still qualify for the credit.

The next topic to be covered in this series is the Impact of Seasonal Employees. Contact Vision Payroll if you have further questions on the Impact of the Twenty-five or More Employees.

This week’s question comes from Lisa, an office manager. We may need to layoff a few employees. Some of them may elect COBRA continuation coverage. I know there was a subsidy for employees laid off through March 31, but I just heard that the subsidy period was extended. When does the COBRA subsidy period end? As noted by the Internal Revenue Service (IRS) in IR-2010-052, under The Continuing Extension Act of 2010, workers who are involuntarily terminated during April and May might be eligible for the sixty-five percent subsidy on COBRA continuation coverage. Eligible employees pay a reduced premium to their employer who then pays the difference. The employer may claim a credit on Form 941 for the amount paid. Contact Vision Payroll for further information on the COBRA subsidy period extension.

According to the US Department of Labor, in the week ending April 24, the advance figure for seasonally adjusted initial claims was 448,000, a decrease of 11,000 from the previous week’s revised figure of 459,000. The 4-week moving average was 462,500, an increase of 1,500 from the previous week’s revised average of 461,000.

The advance seasonally adjusted insured unemployment rate was 3.6% for the week ending April 17, unchanged from the prior week’s unrevised rate of 3.6%.

The advance number for seasonally adjusted insured unemployment during the week ending April 17 was 4,645,000, a decrease of 18,000 from the preceding week’s revised level of 4,663,000. The 4-week moving average was 4,639,000, a decrease of 9,000 from the preceding week’s revised average of 4,648,000.

The fiscal year-to-date average of seasonally adjusted weekly insured unemployment, which corresponds to the appropriated AWIU trigger, was 5.186 million.

The Internal Revenue Service (IRS) recently released a draft 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:

• Number of qualified employees first paid exempt wages/tips this quarter
• Number of qualified employees paid exempt wages/tips this quarter
• Exempt wages/tips paid to qualified employees this quarter
• Number of qualified employees paid exempt wages/tips March 19–31
• Exempt wages/tips paid to qualified employees March 19–31

A final version of Form 941 is expected to be released next month. Contact Vision Payroll if you have any questions on the draft Form 941.

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 Determining the Amount of Average Annual Wages.

To determine the amount of average annual wages, divide total wages paid to qualifying employees by the number of full-time equivalent employees (FTEs). Round the resulting quotient down to the nearest whole number. For example, if an employer pays $224,000 in wages and has 10 FTEs, compute average annual wages as follows:

• $224,000 ÷ 10 = $22,400
• $22,400 rounded down to the nearest $1,000 = $22,000, so average annual wages are $22,000.

The next topic to be covered in this series is the Impact of the Twenty-five or More Employees. Contact Vision Payroll if you have further questions on Determining the Amount of Average Annual Wages.