Vision Payroll

Monday, January 17, 2011 will be the Birthday of Martin Luther King, Jr., 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.

Date Paid	Process Deadline
1/17/2011	1/12/2011
1/18/2011	1/13/2011
1/19/2011	1/14/2011

Payroll Dates May Be Affected by Birthday of Martin Luther King, Jr.

Payrolls dated January 17 will be paid January 14 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 January 20.

Washington’s Birthday Is Next Federal Holiday

The next federal holiday will be Monday, February 21, 2011, Washington’s Birthday. Contact Vision Payroll as soon as possible to make changes to or for questions on your processing schedule.

This is one in a continuing series on the 2010 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than January 31, 2011. 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 3, social security wages.

Social Security Earnings Help Determine the Amount of Social Security Benefits

Box 3 shows the amount wages paid subject to social security tax. It does not include social security tips reported in box 7 or allocated tips reported in box 8. Wages should be reduced by amounts withheld for non-taxable benefits elected under §125 plans, certain clergy housing allowances, and third-party sick pay after the end of six calendar months after the calendar month that the employee last worked for the employer. For 2010, the combined total of boxes 3 and 7 cannot exceed $106,800. Since social security benefits are based on the amount of social security wages 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.

Box 4, Social Security Tax Withheld Is the Next Topic

The next topic in this continuing series will be Box 4, social security tax withheld. Contact Vision Payroll with any questions on the 2010 Form W-2.

This is one in a continuing series on the 2010 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than January 31, 2011. 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 2, federal income tax withheld.

Box 2 Amount Is Entered on Form 1040

Box 2 shows the amount employees must enter on line 62 of Form 1040, US Individual Income Tax Return. Employers determine the amount of withheld federal income tax each pay period by the amount of taxable wages, the pay frequency, and the number of withholding allowances claimed on Form W-4, Employee’s Withholding Allowance Certificate. Spanish-speaking employees may complete Formulario W-4(SP), Certificado de Exención de la Retención del Empleado. Employers may use either the percentage method or the wage bracket method to calculate the amount of tax to withhold. Both methods are explained in Publication 15, (Circular E) Employer’s Tax Guide. Employers should not accept “reverse withholding” where employees write checks to the employer to pay withholding tax. Employees should make such payments using Form 1040-ES. Also, any amounts that employers pay toward an employee’s withholding to “gross-up” non-cash payments such as taxable fringe benefits must also be included as wages in boxes 1, 3, 5, and 7 as required.

Box 3, Social Security Wages Is the Next Topic

The next topic in this continuing series will be Box 3, social security wages. Contact Vision Payroll with any questions on 2010 Form W-2.

This week’s question comes from Steve, an HR director. We provide transportation benefits to our employers. In 2010, we could exclude $230 per month for most qualified transportation benefits. What is the monthly limit on the value of qualified transportation benefits? Answer: The Internal Revenue Service (IRS) in IR-2010-127 announced inflation adjustments related to several tax provisions. Among them, the IRS announced that for 2011, the monthly limit on the value of qualified transportation benefits provided by an employer to its employees would remain at $230.

Details Found in Revenue Procedure 2011-12

Details on the inflation adjustments are found in Revenue Procedure 2011-12. The eight items for which adjustments are included are the following:

1. Tax Rate Tables
2. Child Tax Credit
3. Hope Scholarship and Lifetime Learning Credits
4. Earned Income Credit
5. Standard Deduction
6. Qualified Transportation Fringe
7. Personal Exemption
8. Interest on Education Loans

Qualified Transportation Benefits Limits Are Unchanged

Employers are again allowed to exclude from wages the value of transportation benefits provided to an employee up to the following limits:

• $230 per month for combined commuter highway vehicle transportation and transit passes.
• $230 per month for qualified parking.
• For a calendar year, $20 multiplied by the number of qualified bicycle commuting months during that year for qualified bicycle commuting reimbursement of expenses incurred during the year.

Do You Still Have Questions on Qualified Transportation Benefits?

Contact Vision Payroll if you have further questions on the limit on the value of qualified transportation benefits.

According to the US Department of Labor, in the week ending December 25, the advance figure for seasonally adjusted initial claims was 388,000, a decrease of 34,000 from the previous week’s revised figure of 422,000. The 4-week moving average was 414,000, a decrease of 12,500 from the previous week’s revised average of 426,500.

Advance Seasonally Adjusted Insured Unemployment Rate Increases

The advance seasonally adjusted insured unemployment rate was 3.3% for the week ending December 18, an increase of 0.1 percentage points from the prior week’s unrevised rate of 3.2%.

Advance Seasonally Adjusted Insured Unemployment Increases

The advance number for seasonally adjusted insured unemployment during the week ending December18 was 4,128,000, an increase of 57,000 from the preceding week’s revised level of 4,071,000. The 4-week moving average was 4,120,000, a decrease of 37,250 from the preceding week’s revised average of 4,157,250.

Over the past years, numerous economic changes have reshaped the business landscape. In turn, companies must look more closely at their current talent, their needed talent, and how to motivate the right talent towards satisfying their business goals.

Three Questions to Help Strategically Connect Your Talent Needs To Your Business Goals

1. What is talent management?
2. What are the talent management guidelines that companies should follow?
3. How can non-traditional HR tools and approaches be used to streamline the process?

Get Help Strategically Connecting Your Talent Needs To Your Business Goals Now

To obtain answers to these questions and more, be sure to listen to Strategically Connecting Your Talent Needs To Your Business Goals in this month’s HRCast, a recording provided by our team of HR Pros and available exclusively on MyHRSupportCenter.

MyHRSupportCenter Provides Alerts, Best Practices, and HR Tools Every Day

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 haven’t yet signed up and would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

This is one in a continuing series on the 2010 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than January 31, 2011. 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 1, wages, tips, other compensation.

Box 1 May Include Several Adjustments To Gross Wages

Box 1 shows the amount employees must enter on line 7 of Form 1040, US Individual Income Tax Return. It may be, but is not necessarily, equal to gross wages. Common adjustments that increase or decrease gross wages include the following:

• Employee elective deferral to qualified retirement plans such as §401(k) plans, SIMPLE plans, and §403(b) plans (decrease).
• Amounts withheld for non-taxable benefits elected under §125 plans (decrease).
• Taxable non-cash fringe benefits, such as personal use of company automobile (increase).
• Certain clergy housing allowances (decrease).
• Reported tips (increase).
• Expense reimbursements paid under a non-accountable plan (increase).
• Accident and health insurance premiums for so-called 2% S corporation shareholders (increase).
• Cost of group-term life insurance in excess of $50,000 (increase).

Box 2, Federal Income Tax Withheld Is the Next Topic

The next topic in this continuing series will be Box 2, federal income tax withheld. Contact Vision Payroll with any questions on the 2010 Form W-2.

According to the California Employment Development Department (EDD), employers in the counties of Kings, Los Angeles, Santa Barbara, Inyo, & San Diego directly affected by the winter storms 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).

Kings, Los Angeles, Santa Barbara, Inyo, & San Diego Counties in a Declared State of Emergency Due to Winter Storms

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 Kings, Los Angeles, Santa Barbara, Inyo, & San Diego County Clients with Extension Application

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

This is one in a continuing series on the 2010 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than January 31, 2011. 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 general information regarding Form W-2.

Form W-2 Should Be Typed or Machine-Printed

Forms W-2 should be typed or machine-printed in black ink, using 12-point Courier font. Dollar signs and commas must be omitted, but decimal points and cents, even if zero, must be included. Forms W-2 must be prepared on a calendar year basis using pay dates, not work dates. Wages for work performed in 2009 and paid in 2010 are included and wages for work performed in 2010 and paid in 2011 are excluded.

Boxes a-f Contain Employee and Employer Identifying Information

Report the employee’s social security number (SSN) in box a. Employees who have applied for, but not received, an SSN should be reported with all zeroes and corrected on a Form W-2c. Enter in box b the employer’s employer identification number, not the owner’s SSN. Box c must contain the employer’s address as shown on Forms 941, 943, 944, CT-1 or Schedule H of Form 1040. Box d is an optional box for employer use to identify individual forms. Box e should report the employee’s name exactly as shown on the social security card. Suffixes such as Sr. or Jr. should only be included if on the social security card. Do not include professional and academic titles and degrees such as CPA or Ph.D. as part of the employee’s names. Names should not be changed on Form W-2 unless the employee has received a revised card from the Social Security Administration. The Address in box f should be the address where the employee receives mail. It is recommended that comma and periods not be used in delivery addresses. Foreign country names are not to be abbreviated.

Box 1, Wages, Tips, Other Compensation Is the Next Topic

The next topic in this continuing series will be Box 1, wages, tips, other compensation. Contact Vision Payroll with any questions on 2010 Form W-2.

According to the California Employment Development Department (EDD), employers in the counties of Kern, Orange, Riverside, San Bernardino, San Luis Obispo, & Tulare directly affected by the winter storms 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).

Kern, Orange, Riverside, San Bernardino, San Luis Obispo, & Tulare Counties in a Declared State of Emergency Due to Winter Storms

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 Kern, Orange, Riverside, San Bernardino, San Luis Obispo, & Tulare County Clients with Extension Application

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