Vision Payroll

In the recently released, Working Draft Directive 09-XX, Requirements for Employers Filing Year-end Withholding Information, the Massachusetts Department of Revenue (DOR) proposes changes to the definition of “machine-readable form”. Employers who file fifty or more Forms W-2 in a calendar year are required to file them in machine-readable form. For 2009 and later, the definition of machine-readable form will no longer include diskette, magnetic tape, or cartridge 18-track magnetic media. Filing must be done through WebFile for Business or electronic data transfer. Contact Vision Payroll if you have any questions on the proposed changes.

This week’s question comes from Jason, an HR director. We reimburse employees using the per diem rates established by the General Services Administration. What are the 2010 maximum per diem rates? Answer: The GSA updated the maximum per diem rates for travel after September 30, 2009 and before October 1, 2010. For destinations or counties not specifically listed, the lodging per diem is $70 and the meals and incidental expenses per diem is $46. The rates for 2009 were $70 and $39, respectively. Certain destinations or counties are listed with higher per diem rates for part or all the fiscal year. Contact Vision Payroll if you have any questions on maximum per diem rates.

According to the US Department of Labor, in the week ending August 22, the advance figure for seasonally adjusted initial claims was 570,000, a decrease of 10,000 from the previous week’s revised figure of 580,000. The 4-week moving average was 566,250, a decrease of 4,750 from the previous week’s revised average of 571,000.

The advance seasonally adjusted insured unemployment rate was 4.6% for the week ending August 15, 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 August 15 was 6,133,000, a decrease of 119,000 from the preceding week’s revised level of 6,252,000. The 4-week moving average was 6,241,750, a decrease of 27,000 from the preceding week’s revised average of 6,268,750.

The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.583 million.

How does the Fair Labor Standards Act (FLSA) apply to travel time? How is weekend time handled if it combines business time and personal time? Must employees be paid for commuting if it’s done in company-owned vehicles?

Learn the answers to these questions and much more in this month’s HRCast, a recording provided by our team of HR Pros and available exclusively on MyHRSupportCenter. You’ll learn more about the rules covering these four types of travel:

1. Portal-to-portal travel
2. Travel between work sites in a single day
3. Special one-day assignments
4. Overnight travel

Mistakes made in this area can be costly and employers must be familiar with the rules to ensure proper treatment.

Visit MyHRSupportCenter regularly not only for our HRCasts, but also to get late-breaking compliance alerts, best practices to implement, and HR tools to use every day. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

According to the California Employment Development Department (EDD), employers in the county of Yuba directly affected by the damage resulting from the fire 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.

Monday, September 7, 2009 will be Labor Day, a federal holiday. The offices of Vision Payroll will close Friday September 4 at 5 pm EDT and re-open Tuesday September 8. Most banks will also be closed in observance of the holiday.

Payrolls dated September 7 will be paid September 4 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 September 10.

The next federal holiday will be Monday, October 12, 2009, Columbus Day. Contact Vision Payroll as soon as possible to make changes to or for questions on your processing schedule.

The Wisconsin Department of Revenue has released a revised Publication W-166, Wisconsin Employer’s Withholding Tax Guide. Effective for taxable years beginning after December 31, 2008, the top individual rate increased fifteen percent from 6.75% to 7.75%. The withholding tables and alternate methods of withholding have been revised due to the new tax rate and bracket adjustment resulting from inflation. The revised withholding tables or alternate methods should be implemented no later than October 1, 2009. Vision Payroll has implemented the revised withholding tables and Wisconsin taxpayers should have already noticed the change in withholding.

As part of the recently-enacted California Assembly Bill No. 17, signed by Governor Arnold Schwarzenegger on July 29, 2009, the withholding rates will increase effective for wages paid after October 31, 2009. The wage withholding tables will be adjusted so that the amount to be withheld will be ten percent more than the sum that is calculated under the current withholding tables. Withholding on supplemental wages will increase from 6% to 6.6% and withholding on stock options and bonus payments will also increase from 9.3% to 10.23%. Changes were also made to the percentage of total estimated taxes that must be paid each quarter beginning in 2010.

Vision Payroll strongly recommends that California taxpayers consult their tax advisor to ensure that the proper amount of withholding tax be calculated and to calculate any adjustment to the number of withholding allowances claimed.

This week’s question comes from Brian. We need more help in our business. We’re not sure if the person who’ll provide us services should be considered an employee. How do I know if someone is an employee or independent contractor? Answer: In Summertime Tax Tip 2009-20, the Internal Revenue Service (IRS) listed ten items a business should consider when deciding whether an individual is an employee or independent contractor. They are:

1. Three characteristics are used by the IRS to determine the relationship between businesses and workers: Behavioral Control, Financial Control, and the Type of Relationship.
2. Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training or other means.
3. Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker’s job.
4. The Type of Relationship factor relates to how the workers and the business owner perceive their relationship.
5. If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees.
6. If you can direct or control only the result of the work done — and not the means and methods of accomplishing the result — then your workers are probably independent contractors.
7. Employers who misclassify workers as independent contractors can end up with substantial tax bills. Additionally, they can face penalties for failing to pay employment taxes and for failing to file required tax forms.
8. Workers can avoid higher tax bills and lost benefits if they know their proper status.
9. Both employers and workers can ask the IRS to make a determination on whether a specific individual is an independent contractor or an employee by filing a Form SS-8 – Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding – with the IRS.
10. You can learn more about the critical determination of a worker’s status as an Independent Contractor or Employee at IRS.gov by selecting the Small Business link. Additional resources include IRS Publication 15-A, Employer’s Supplemental Tax Guide, Publication 1779, Independent Contractor or Employee, and Publication 1976, Do You Qualify for Relief under Section 530? These publications and Form SS-8 are available on the IRS Web site or by calling the IRS at 800-829-3676 (800-TAX-FORM).

Contact Vision Payroll if you need further information.

According to the US Department of Labor, in the week ending August 15, the advance figure for seasonally adjusted initial claims was 576,000, an increase of 15,000 from the previous week’s revised figure of 561,000. The 4-week moving average was 570,000, an increase of 4,250 from the previous week’s revised average of 565,750.

The advance seasonally adjusted insured unemployment rate was 4.7% for the week ending August 8, unchanged from the prior week’s unrevised rate of 4.7%.

The advance number for seasonally adjusted insured unemployment during the week ending Aug. 8 was 6,241,000, an increase of 2,000 from the preceding week’s revised level of 6,239,000. The 4-week moving average was 6,266,000, a decrease of 2,500 from the preceding week’s revised average of 6,268,500.

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