Vision Payroll

This week’s question comes from Jerri, an HR director. I know federal income tax withholding is supposed to change because of the new tax law. Do employees need to file a new Form W-4? Answer: Employees are not required to file a revised Form W-4, Employee’s Withholding Allowance Certificate or its Spanish equivalent, Formulario W-4(SP), Certificado de Exención de la Retención del Empleado to see the impact of the American Recovery and Reinvestment Act of 2009 (ARRA). The Internal Revenue Service (IRS) provided new tax tables in Publication 15-T that adjust withholding for most workers. Employers must begin using the tables no later than April 1, 2009.

Workers may file a new Form W-4 or Formulario W-4(SP) if they do not wish to have their withholding reduced. Employees may wish to review Publication 919, How Do I Adjust My Tax Withholding or use the IRS withholding calculator. The IRS also recommends that employers provide a copy of the notice on page 73 of Publication 15-T to employees to help them understand the changes.

Contact Vision Payroll if you have further questions on the impact of ARRA on federal income tax withholding.

Need to learn more about the changes in COBRA changes mandated by the American Recovery and Reinvestment Act of 2009, but unable to attend next week’s seminar presented by Vision Payroll. Take the next best step by reviewing this month’s featured article by the HR Pros at MyHRSupportCenter, The American Recovery and Reinvestment Act of 2009 (ARRA) and New COBRA Changes.

This month’s article highlights the changes required by the law, reviews some key provisions, and sets an action plan with recommended next steps. One of those steps is to review The American Recovery and Reinvestment Act (ARRA) of 2009 and the Impact on COBRA Guide (the Guide) also produced by the HR Pros at MyHRSupportCenter. The Guide contains more comprehensive information on the changes and series of FAQs to guide you in implementing the required changes. The Guide can be found by searching “arra” from the Essentials, Guides page.

There are still a few seats available for next week’s COBRA seminar presented by John P. McMorrow, Esq. of Mirick O’Connell and the staff of Vision Payroll. Contact Vision Payroll today to reserve your seat.

To learn more, sign into MyHRSupportCenter and read this month’s featured article. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

Please join us on Thursday, March 19, 2009 for a seminar on changes mandated by the American Recovery and Reinvestment Act of 2009. These changes affect virtually every employer in Massachusetts and many others nationwide. Attorney John P. McMorrow of Mirick O’Connell will talk on What Employers Need to Know about the New COBRA Rules. Employees of Vision Payroll will then discuss how the COBRA change will be handled mechanically as well as other changes in the payroll and HR area required by the Act.

There is no charge for this seminar, but advanced registration is required. Space is limited so registrations will be accepted on a first-come, first-served basis.

Date:  March 19, 2009

Time:  Registration starts at 8 am, presentation starts at 8:30 am

Place: Woodblock Building Conference Room, 14 Monument Square, Leominster

Free parking is available in the lot behind the building. Entry is in back. Refreshments will be served.

We expect the seminar to run 1½ to 2 hours, but Vision Payroll employees will stay longer to answer questions as necessary.

RSVP to Vision Payroll.

The Internal Revenue Service (IRS) has released Publication 15-T, New Wage Withholding and Advance Earned Income Credit Payment Tables (For Wages Paid Through December 2009). Publication 15-T contains revised withholding tables to implement changes mandated by the American Recovery and Reinvestment Act of 2009 (the Act) as well as information on other changes required by the Act such as increased commuter exclusion amounts and changes required to the adjustment to taxes withheld on nonresident aliens.

The IRS recommends making a copy of the notice provided on page 73 of Publication 15-T available to all employees so that they may understand the change in withholding. Employees are not required to file a new Form W-4, Employee’s Withholding Allowance Certificate or its Spanish equivalent, Formulario W-4(SP), Certificado de Exención de la Retención del Empleado to see the impact of the tax law change, but may wish to do so to ensure the correct amount of tax is withheld.

Vision Payroll implemented the revised withholding tables last week and eligible employees should notice an increase in net pay with their current paycheck.

Over the next several days, Vision Payroll will be posting additional articles on changes to payroll and HR by other sections of the Act. We’re also planning a seminar on implementing these changes, so contact Vision Payroll if you’d like to attend.

The American Recovery and Reinvestment Act of 2009 (the Act) made changes to continuation health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as COBRA. Employers are required to pay sixty-five percent of the premiums for certain eligible individuals, but may claim a credit on Form 941, Employer’s QUARTERLY Federal Tax Return, for these premiums.

If you need to claim a credit for COBRA premiums paid, contact Vision Payroll and we’ll update your payroll with the appropriate tax codes so that you will receive proper credit on your Form 941. If your credit exceeds your liability, no tax deposit will be due for that period and you may receive a refund when you file your Form 941.

Over the next several days, Vision Payroll will be posting additional articles on changes to payroll and HR by other sections of the Act. We’re also planning a seminar on implementing these changes, so contact Vision Payroll if you’d like to attend.

The American Recovery and Reinvestment Act of 2009 (the Act) made changes to continuation health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as COBRA. Here are five fast facts on the changes related to employers:

1. Employers are required to pay the additional sixty-five percent of the premiums not paid by employees.
2. Employers may claim a credit on Form 941, Employer’s QUARTERLY Federal Tax Return, for their share of the COBRA premiums.
3. Payment of the premium subsidies by employers and the credits on Form 941 happen only after employees have paid their share of the premiums.
4. Supporting documentation for the credit must be maintained by employers, but need not be submitted with the Form 941.
5. Employers are required to pay the subsidy for eligible employees covered under COBRA or similar state laws.

Over the next several days, Vision Payroll will be posting additional articles on implementing the changes to COBRA continuation coverage required by the Act as well as other changes to payroll and HR by other sections of the Act. We’re also planning a seminar on implementing these changes, so contact Vision Payroll if you’d like to attend.

The American Recovery and Reinvestment Act of 2009 (the Act) made changes to continuation health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as COBRA. Here are five fast facts on the changes related to employees:

1. The law became effective February 17, 2009 and applies to qualifying events occurring after August 31, 2008 and before January 1, 2010.
2. Involuntarily separated workers who elected COBRA continuation health coverage are only required to pay thirty-five percent of the required premiums.
3. Eligible individuals who did not elect COBRA coverage because it was unaffordable have sixty days to elect COBRA coverage.
4. The subsidy phases out for individuals with modified adjusted gross income over $125,000 and when modified adjusted gross income exceeds $145,000 individuals are no longer eligible. Those numbers increase to $250,000 and $290,000 for taxpayers filing joint returns.
5. The subsidy may last for up to nine months.

Over the next several days, Vision Payroll will be posting additional articles on implementing the changes to COBRA continuation coverage required by the Act as well as other changes to payroll and HR by other sections of the Act. We’re also planning a seminar on implementing these changes, so contact Vision Payroll if you’d like to attend.

This week’s question comes from Doug, head of HR. I heard that the new tax law will impact employees eligible for COBRA. How does the American Recovery and Reinvestment Act of 2009 (the Act) change COBRA continuation health coverage? Answer: Under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as COBRA, certain former employees are allowed to continue health care coverage under their former’s employer’s group plan. The former employees must pay the cost of the health care premiums.

The Act made significant changes to COBRA continuation coverage. Under the Act, certain covered employees are required to pay only thirty-five percent of the premiums and their former employers must pay the remaining sixty-five percent. Employers may claim a credit on Form 941, Employer’s QUARTERLY Federal Tax Return, for the premiums paid for eligible employees.

The Internal Revenue Service recently released an updated Form 941 to reflect this law change and will soon release other updated forms, such as Form 941-X Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund.

Over the next several days, Vision Payroll will be posting additional articles on implementing the changes to COBRA continuation coverage required by the Act as well as other changes to payroll and HR by other sections of the Act. We’re also planning a seminar on implementing these changes, so contact Vision Payroll if you’d like to attend.

As part of the American Recovery and Reinvestment Act of 2009, the Internal Revenue Service (IRS) has released updated withholding tables. Though they won’t be published until new Publication 15-T is made available later this week, the IRS has released Notice 1036, Early Release Copies of New Wage Withholding and Advance Earned Income Credit Payment Tables and encouraged employers to start using them as soon as possible. The deadline for implementation of the new tables is April 1, 2009.

Workers are not required to file a new Form W-4, Employee’s Withholding Allowance Certificate or its Spanish equivalent, Formulario W-4(SP), Certificado de Exención de la Retención del Empleado to see the impact of the tax law change. The Making Work Pay credit is equal to 6.2% of earned income, up to a maximum of $400 for single taxpayers and $800 for those filing joint returns. Phaseouts of the credit begin at $75,000 of adjusted gross income (AGI) for singles and $150,000 AGI for those filing joint returns and the credit is eliminated for singles with more than $95,000 of AGI and joint returns with more than $190,000 of AGI. Taxpayers in this phaseout range or above due to multiple jobs, a spouse’s income, or unearned income should consider an amended Form W-4 or Formulario W-4(SP).

Vision Payroll has already implemented the revised withholding tables and eligible employees should start seeing an increase in take-home pay as early as today. Contact Vision Payroll if you have any further questions on the impact of the Making Work Pay credit.