Vision Payroll

Director Gary W. Child of the Wyoming Department of Employment has announced an increase in the taxable wage base for 2010. The wage base will increase from $21,500 for 2009 to $22,800 for 2010. Contact Vision Payroll if you have any questions on Wyoming unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

Administrator Roy Mulvaney of the Montana Department of Labor and Industry has announced a 4% increase in the taxable wage base for 2010. The wage base will increase from $25,100 for 2009 to $26,000 for 2010. Contact Vision Payroll if you have any questions on Montana unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

Secretary Ken F. Ortiz of the New Mexico Department of Workforce Solutions has announced a decrease in the taxable wage base for 2010. The wage base will decrease from $20,900 for 2009 to $20,800 for 2010. Contact Vision Payroll if you have any questions on New Mexico unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

Director Lawrence G. Rebman of the Missouri Department of Labor and Industrial Relations has announced a increase in the taxable wage base for 2010. The wage base will increase from $12,500 for 2009 to $13,000 for 2010. Contact Vision Payroll if you have any questions on Missouri unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

Democratic Governor Phil Bredesen of Tennessee recently signed HB2324/SB2315 into law. Under the newly-enacted legislation, the 2009 wage base is increased from $7,000 to $9,000 retroactively to January 1, 2009. The wage base will remain at $9,000 until the trust fund balance exceeds $900 million, decrease to $8,000 if the trust fund balance exceeds $900 million but not $1 billion, and decrease to $7,000 if the trust fund balance exceeds $1 billion. Also, an additional fee of 0.6% on all unemployment insurance premium rates on Premium Tables 1, 2, and 3 is imposed as well. The additional tax will stay in place until the trust fund balance equals or exceeds $650 million.

Employers should report the additional wages from quarter one on their quarter two form or if their payroll accounting system does not allow this, employers may amend their quarter one filing.

According to James G. Neeley, Commissioner of the Tennessee Department of Labor and Workforce Development (the Agency), the Agency will send an “Employer Statement” that shows the balance due from quarter one because of the increase in tax rates. He also pledged that the Agency would administer the legislation “in as efficient and equitable a manner as possible.”

Contact Vision Payroll for assistance if you’re impacted by the changes in Tennessee unemployment law.

Roger B. Madsen, Director of the Idaho Department of Labor announced recently that the 2009 unemployment wage will increase from $32,200 to $33,200. In addition, tax rates (including the workforce rate) will range from 0.447% to 5.4% and the standard rate will be 1.566%. The special Administration Reserve Fund Tax is not in effect for 2009. Contact Vision Payroll if you have any question on Idaho unemployment rates and wage base.

Maureen T. O’Donnell, Director of the State of Illinois Department of Employment Security announced recently that the 2009 unemployment wage base has increased from $12,000 to $12,300. O’Donnell, appointed by Governor Rod R. Blagojevich in August, had served as Acting Director since March 2007. In addition, the minimum rate, the maximum rate, and the fund building rate all decreased from 0.8% to 0.6%, from 7.2% to 6.8%, and from 0.6% to 0.4%, respectively. Contact Vision Payroll if you have any question on Illinois unemployment tax rates and taxable wage base.

This week’s question comes from Janet, a sales rep: I read before that the wage base for 2008 was $102,000. I’ve made over $104,000, but FICA tax is still being withheld. Why didn’t my FICA tax deduction stop? Answer: Even though your gross wages are over $104,000, the FICA tax deduction doesn’t stop until FICA taxable wages reach $102,000 and FICA tax withheld reaches $6,324. Some wage deductions such as cafeteria or §125 plan deductions reduce the amount of FICA taxable wages. So, even though your gross earnings are over $102,000, FICA tax must be withheld until the maximum withholding is reached. Contact Vision Payroll if you have any questions on the Social Security wage base.

This week’s question comes from Becca, a sales rep: I read before that the wage base for 2008 was $102,000. I made over $90,000 at my first job and have earned more than $30,000 at my new job. Why didn’t my FICA tax deduction stop? Answer: The wage base generally must be applied on an employer-by employer basis. Regardless of how much you’ve earned at previous jobs, most employers must withhold the maximum tax again. There are some exceptions, including successor employers and common paymasters, but the general rule is you must reach the maximum again at your second job to stop the withholding. Even though the employer must pay the full tax and withhold it from the employee, amounts withheld above the maximum can be claimed as a credit on Form 1040. For tax year 2008, enter any excess FICA tax withheld by two or more employers on line 65 of Form 1040 and reduce your balance due or increase your overpayment by the amount of the excess. Contact Vision Payroll if you have any questions on the Social Security wage base.

This week’s question comes from Matt, a sales rep: Every week there’s a deduction for FICA on my paycheck. Two weeks ago, the deduction was lower than usual and last week there was no deduction at all. Why did my FICA tax deduction stop? Answer: The FICA (Federal Insurance Contributions Act) tax is related to Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) program, commonly called Social Security. Under this program, there is a cap on benefits based on a maximum earnings level, called the wage base. For 2008, the wage base is $102,000 and for 2009 it is scheduled to increase to $106,800. At retirement, using current law, benefit calculations are limited to earnings at or below the wage base. Therefore, no tax is withheld on earnings above the wage base, effectively limiting the maximum withholding to $6,324 in 2008. Contact Vision Payroll if you have any questions on the Social Security wage base.