Vision Payroll

Monday, October 12, 2009 will be Columbus Day, a federal holiday. Although the offices of Vision Payroll will be open and payrolls will be processed, most banks will be closed in observance of the holiday.

Payrolls dated October 12 will be paid October 9 unless a previous change in schedule has been submitted. Payrolls submitted after these processing deadlines will be pushed back until the next available processing day. No changes are required for payrolls dated October 15.

The next federal holiday will be Wednesday, November 11, 2009, Veterans Day. Contact Vision Payroll as soon as possible to make changes to or for questions on your processing schedule.

Under Title 26, Chapter 7, Subchapter 3, §664, of the Maine Revised Statutes, the minimum wage for the state of Maine will increase to $7.50 per hour effective October 1, 2009. Tip credits and occupational exemptions may apply so that a lower wage may be paid in certain circumstances. Contact Vision Payroll if you have any questions on the Maine minimum wage increase or visit our Minimum Wage Chart.

The Internal Revenue Service (IRS) recently released Notice 2009-68, Safe Harbor Explanation – Eligible Rollover Distribution. Notice 2009-68 contains two safe harbor explanations that employers may use to provide recipients the written explanation of distributions eligible for rollover treatment required under §402(f) of the Internal Revenue Code of 1986 (IRC). These explanations update the previously released explanations first published in Notice 2002-3, 2002-1 CB 289 for recent law changes.

The first safe harbor explanation applies to a distribution not from a designated Roth account (as described in IRC §402A). The second safe harbor explanation applies to a distribution from a designated Roth account.

Contact Vision Payroll if you have any further questions on Notice 2009-68.

This week’s question comes from Rick, a business owner in Manhattan. This week’s tax liability expense was larger than normal, mostly due to the New York MTA Payroll Tax. Why do I have a big withdrawal for MTA Payroll Tax this week? As previously reported, the Metropolitan Commuter Transportation Mobility Tax or MTA Payroll Tax covers wages paid within the Metropolitan Commuter Transportation District (MCTD) after February 28, 2009. The tax filing for the third quarter must include the tax on all wages paid after February 28, 2009 and before October 1, 2009. In the last payroll of this quarter, all uncollected taxes for that period were collected for payment with the third quarter return. After the third quarter, filing and payments will be due on a quarterly basis. Contact Vision Payroll if you have any questions on your MTA Payroll Tax liability.

According to the US Department of Labor, in the week ending September 19, the advance figure for seasonally adjusted initial claims was 530,000, a decrease of 21,000 from the previous week’s revised figure of 551,000. The 4-week moving average was 553,500, a decrease of 11,000 from the previous week’s revised average of 564,500.

The advance seasonally adjusted insured unemployment rate was 4.6% for the week ending September 12, a decrease of 0.1 percentage points from the prior week’s unrevised rate of 4.7%.

The advance number for seasonally adjusted insured unemployment during the week ending September 12 was 6,138,000, a decrease of 123,000 from the preceding week’s revised level of 6,261,000. The 4-week moving average was 6,187,250, a decrease of 1,250 from the preceding week’s revised average of 6,188,500.

The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.651 million.

If not managed effectively, an employee’s absence from work – regardless of how short and temporary it may be – can strain resources and morale. Whenever an employee plans to or unexpectedly needs to take time off, our Leave of Absence Quick Guide will help guide you through one of the most complex aspects of employee management. Learn the five top tips for managing leaves of absence and download a checklist to help you manage the flow from MyHRSupportCenter. In addition to these helpful tools, the Quick Guide also contains sections with forms, templates and guidelines, relevant articles, and relevant information.

To learn more be sure to login to MyHRSupportCenter, click Quick Guides, then Leave of Absence. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

The Internal Revenue Service (IRS) recently released Notice 2009-67, Adding Automatic Enrollment to SIMPLE IRA Plans – Sample Amendment. Notice 2009-67 facilitates automatic enrollment by providing a sample plan amendment that a prototype sponsor of a SIMPLE IRA plan (using a designated financial institution) can use in drafting an amendment to add an automatic contribution arrangement to the SIMPLE IRA plan. The IRS plans to issue a revised Form 5305-SIMPLE, Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) — for Use With a Designated Financial Institution, that includes an automatic contribution arrangement.

Contact Vision Payroll if you have any further questions on Notice 2009-67.

According to the California Employment Development Department (EDD), employers in the county of Imperial directly affected by the damage resulting from the severe storm 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. The 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.

The Internal Revenue Service (IRS) recently released Notice 2009-66, Automatic Enrollment in SIMPLE IRAs. Notice 2009-66, in question-and-answer format, provides rules for employers that maintain SIMPLE IRA plans. It confirms that SIMPLE IRAs may do the following:

1. Include an automatic contribution arrangement;
2. Provide that default salary reduction contributions made under an automatic contribution arrangement are made only for employees who are first eligible under the SIMPLE IRA plan on or after the effective date of the automatic contribution arrangement and who do not make an affirmative election;
3. Provide that the percentage of compensation at which default salary reduction contributions under an automatic contribution arrangement are made for an employee increases based on the number of years or portions of years for which default salary reduction contributions have been made for the employee.

Notice 2009-66 also reviews the changes in notice requirements for SIMPLE IRAs that include an automatic contribution arrangement, explains the transfer rights that employees must receive during their 60-day election period, and confirms that if the requirements of the regulations under §404(c)(5) of the Employee Retirement Income Security Act of 1974 (“ERISA”) are met, fiduciary relief will apply with respect to the investment of default salary reduction contributions in default investments.

Contact Vision Payroll if you have any further questions on Notice 2009-66.

The Internal Revenue Service (IRS) recently released Notice 2009-65, Adding Automatic Enrollment to Section 401(k) Plans – Sample Amendments. The Notice contains two sample amendments that allow employers to change existing §401(k) plans as late as the last day of the first plan year beginning after December 31, 2008. For government plans, the amendment may be adopted as late as the last day of the first plan year beginning after December 31, 2010. Plan sponsors are not required to adopt the amendments and may need to tailor the amendments to match provisions of their specific plans.

The first sample amendment can be used to add an automatic contribution arrangement to a §401(k) plan. The second sample amendment can be used to add an automatic contribution arrangement described in §414(w) of the Internal Revenue Code of 1986 (permitting 90-day withdrawals) to a §401(k) plan.

Contact Vision Payroll if you have any further questions on Notice 2009-65.