Vision Payroll

This is one in a continuing series on the 2009 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than February 1, 2010. Forms mailed on the due date are considered furnished if properly addressed. Employers unable to meet that deadline may file a request for extension of time to furnish the forms. Today we review Box 9, advance EIC payment.

Box 9 shows the amount of any advance EIC (earned income credit) payment paid to the employee. Employees must meet four criteria and file Form W-5, Earned Income Credit Advance Payment Certificate in order to receive advance EIC payments. For 2009, the maximum advance EIC was $1,826. Employees entitled to additional EIC are eligible to receive it when filing Form 1040, US Individual Income Tax Return.

The next topic in this continuing series will be Box 10, dependent care benefits. Contact Vision Payroll with any questions on the 2009 Form W-2.

This week’s question comes from Sarah, a household employer. I withheld payroll taxes from my household employees. How do I report and pay payroll taxes for household employees? Answer: Household employers should prepare and file Schedule H (Form 1040), Household Employment Taxes to report and pay payroll taxes if they answer yes to any of the following three questions:

1. Did you pay any one household employee cash wages of $1,700 or more in 2009?
2. Did you withhold federal income tax during 2009 for any household employee?
3. Did you pay total cash wages of $1,000 or more in any calendar quarter of 2008 or 2009 to all household employees?

Household employers should attach Schedule H to Form 1040, Form 1040NR, Form 1040-SS, or Form 1041 if filing any of those forms. If not, Schedule H must be filed separately. Vision Payroll prepares a Schedule H suitable for filing for its household employers. Contact Vision Payroll if you have any questions on Schedule H.

According to the US Department of Labor, in the week ending January 9, the advance figure for seasonally adjusted initial claims was 444,000, an increase of 11,000 from the previous week’s revised figure of 433,000. The 4-week moving average was 440,750, a decrease of 9,000 from the previous week’s revised average of 449,750.

The advance seasonally adjusted insured unemployment rate was 3.5% for the week ending January 2, a decrease of 0.1 percentage points from the prior week’s unrevised rate of 3.6%.

The advance number for seasonally adjusted insured unemployment during the week ending January 2 was 4,596,000, a decrease of 211,000 from the preceding week’s revised level of 4,807,000. The 4-week moving average was 4,855,000, a decrease of 151,500 from the preceding week’s revised average of 5,006,500.

The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.448 million.

The Internal Revenue Service (IRS) recently released 2010 Form W-5, Earned Income Credit Advance Payment Certificate. There are four criteria for claiming advance earned income credit (EIC) payments.

1. Taxpayer (and spouse if filing jointly) must have a valid social security number.
2. Taxpayer (or spouse if filing jointly) must have at least one qualifying child and be able to claim the credit using that child.
3. Taxpayer’s expected earned income and adjusted gross income must be less than $35,535 ($40,545 if filing jointly).
4. Taxpayer must expect to claim the EIC for 2010.

The maximum credit taxpayers may receive in advance is $1,830. Eligible taxpayers must file a new Form W-5 for 2010. The 2009 Form W-5 expired December 31, 2009. Contact Vision Payroll if you have any question on Form W-5.

This is one in a continuing series on the 2009 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than February 1, 2010. Forms mailed on the due date are considered furnished if properly addressed. Employers unable to meet that deadline may file a request for extension of time to furnish the forms. Today we review Box 8, allocated tips.

Box 8 shows the amount of allocated tips. Large food and beverage establishments use Form 8027, Employee’s Annual Information Return of Tip Income and Allocated Tips to determine the amount of tips to report in Box 8. A large food and beverage establishment meets all three of the following criteria:

1. Food or beverage is provided for consumption on the premises.
2. Tipping is a customary practice.
3. More than 10 employees who work more than 80 hours were normally employed on a typical business day during the preceding calendar year.

The amount in this box is not to be reported in Boxes 1, 3, 5, or 7.

The next topic in this continuing series will be Box 9, advance EIC payment. Contact Vision Payroll with any questions on the 2009 Form W-2.

This is one in a continuing series on the 2009 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than February 1, 2010. Forms mailed on the due date are considered furnished if properly addressed. Employers unable to meet that deadline may file a request for extension of time to furnish the forms. Today we review Box 7, social security tips.

Box 7 shows the amount of tips reported by employees. In many situations, the cash wages paid are insufficient to collect the entire amount of social security and Medicare tax. Reported tips must still be shown in this box, even if social security or Medicare tax was not withheld on them. For 2009, the combined total of Boxes 3 and 7 cannot exceed $106,800. The reported tips should be included with amounts reported in Box 1, wages, tips, other compensation and Box 5, Medicare wages and tips. Since social security benefits are based on the amount of social security tips reported to the Social Security Administration (SSA), it is important that employees periodically review their social security earnings record and provide the SSA with the Form W-2 to update any incorrectly posted earnings records.

The next topic in this continuing series will be Box 8, allocated tips. Contact Vision Payroll with any questions on the 2009 Form W-2.

This is one in a continuing series on the 2009 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than February 1, 2010. Forms mailed on the due date are considered furnished if properly addressed. Employers unable to meet that deadline may file a request for extension of time to furnish the forms. Today we review Box 6, Medicare tax withheld.

Box 6 shows the total amount of employee Medicare withheld, including the amount withheld on tips. It does not include any employer contribution toward Medicare on the employee’s behalf. The 2009 rate was 1.45% and unlike social security, there is no taxable wage base. Therefore, there is no upper limit to the amount entered in this box. If the employer paid the employee’s share of such taxes rather than withholding them, the tax must be grossed up and included in boxes 1, 3, and 5.

The next topic in this continuing series will be Box 7, social security tips. Contact Vision Payroll with any questions on the 2009 Form W-2.

Nonfarm payroll employment edged down (-85,000) in December, and the unemployment rate was unchanged at 10.0%, the US Bureau of Labor Statistics reported recently. Employment fell in construction, manufacturing, and wholesale trade, while temporary help services and health care added jobs.

In December, both the number of unemployed persons, at 15.3 million, and the unemployment rate, at 10.0%, were unchanged. At the start of the recession in December 2007, the number of unemployed persons was 7.7 million, and the unemployment rate was 5.0%.

Unemployment rates for the major worker groups–adult men (10.2%), adult women (8.2%), teenagers (27.1%), whites (9.0%), blacks (16.2%), and Hispanics (12.9%)–showed little change in December. The unemployment rate for Asians was 8.4%, not seasonally adjusted.

Among the unemployed, the number of long-term unemployed (those jobless for 27 weeks and over) continued to trend up, reaching 6.1 million. In December, 4 in 10 unemployed workers were jobless for 27 weeks or longer.

The civilian labor force participation rate fell to 64.6% in December. The employment-population ratio declined to 58.2%.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was about unchanged at 9.2 million in December and has been relatively flat since March. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

About 2.5 million persons were marginally attached to the labor force in December, an increase of 578,000 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 929,000 discouraged workers in December, up from 642,000 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 1.6 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 Perry, an office manager. I’ve registered my business with the Massachusetts Division of Unemployment Assistance (DUA). How do I register Vision Payroll as my TPA in QUEST? Answer: Once you have completed activating your QUEST account on-line and established your permanent password and PIN at www.mass.gov/uima, log in to your account, select and execute the following:

From the Employer Home page:

Select the Account Maintenance page

Select the Third Party Administrator (TPA) Authorization link

Click the ‘NEW’ button

Enter Vision Payroll’s ID Number 100028 and click ‘NEXT’

Vision Payroll’s name will appear.

Select the current day’s date (mm/dd/yyyy) when asked when services are commencing

Leave the service end date field blank

Assign the following roles to Vision Payroll by clicking on the appropriate boxes displayed:

• Account Maintenance Update and Submit
• Payments Update and Submit
• Employment and Wage Detail Update and Submit

Click the ‘Save’ button

Return to the home page and log off the web site

Vision Payroll will then have authorization to provide the same filing services through QUEST as have been performed in the past. Contact Vision Payroll if you have any questions on QUEST.

According to the US Department of Labor, in the week ending January 2, the advance figure for seasonally adjusted initial claims was 434,000, an increase of 1,000 from the previous week’s revised figure of 433,000. The 4-week moving average was 450,250, a decrease of 10,250 from the previous week’s revised average of 460,500.

The advance seasonally adjusted insured unemployment rate was 3.6% for the week ending December 26, a decrease of 0.2 percentage points from the prior week’s unrevised rate of 3.8%.

The advance number for seasonally adjusted insured unemployment during the week ending December 26 was 4,802,000, a decrease of 179,000 from the preceding week’s unrevised level of 4,981,000. The 4-week moving average was 5,005,750, a decrease of 95,250 from the preceding week’s unrevised average of 5,101,000.

The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.565 million.