Payroll Currently Issue No. 12

The current issue, which is dated December 2, 2016, includes coverage of the following payroll compliance developments:

Texas Judge Blocks Implementation of ‘White Collar’ Salary Level Change. On November 22, a federal judge in the Eastern District of Texas issued a nationwide order temporarily stopping the U.S. Department of Labor (DOL) from implementing the new “white collar” exemption rules on December 1.

IRS Extends Deadline to Give ACA Forms to Employees. The IRS extended the deadline until March 2, 2017, for employers and insurers to give the 2016 Affordable Care Act (ACA) forms to employees and covered individuals. The IRS has decided not to extend the deadline to file the 2016 ACA information returns with the IRS. Notice 2016-70.

USCIS Publishes New Form I-9 and Instructions. U.S. Citizenship and Immigration Services (USCIS) has released a revised Form I-9, Employment Eligibility Verification, along with updated instructions. The form and instructions have been posted on the APA website.

IRS Releases 2016 Form 940; Updates Reporting Information for FUTA Credit Reduction Areas. Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, Schedule A (Form 940), Multi-State Employer and Credit Reduction Information, and Instructions for Form 940, have been posted on the APA website. Only California and the Virgin Islands had outstanding Federal Unemployment Account loans on the November 10 deadline and therefore are Federal Unemployment Tax Act (FUTA) credit reduction states for 2016.

Cents-Per-Mile Maximum Car Value for 2017 Remains at $15,900. The APA has calculated the maximum car value for purposes of the vehicle cents-per-mile method of valuing an employee’s personal use of a company-provided car, as well as the fleet-average valuation rule for 2017.

Tables Issued for Figuring Amount Exempt From Levy in 2017. IRS Publication 1494, Tables for Figuring Amount Exempt from Levy on Wages, Salary, and Other Income, has been posted on the APA website.

APA Builds Government Relations Presence. See “Inside Washington” for December.

IRS Issues Further Guidance for Claiming Research Credit Through Payroll Taxes. The IRS released a draft version of the instructions for Form 6765, Credit for Increasing Research Activities, for tax year 2016 on its website.

Specifications for Paper Substitutes for Forms W-2 and W-3 Updated for 2016. Rev. Proc. 2016-54.

IRS Creates Two New Forms to Facilitate E-Filing of Employment Tax Returns. The IRS has released two new electronic signature authorization forms (8879-EMP and 8453-EMP) to provide a paperless method for electronically filing employment tax returns. The forms have been posted to the IRS website.

USCIS Publishes Final Rule Updating Employment-Based Visa Programs. USCIS has published a final rule to modernize and improve certain employment-based nonimmigrant and immigrant visa programs. 81 F.R. 82398.

IRS Clarifies Instructions to Request Extensions to Provide Payees’ 1099s. The IRS corrected a caution statement in the 2016 General Instructions for Certain Information Returns (Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G).

EEOC Posts Recording of New Webinar for 2017 EEO-1 Report. The Equal Employment Opportunity Commission (EEOC) has posted a webinar about the new Employer Information (EEO-1) report on its website. The 2017 report, which is due on March 31, 2018, will require new payroll data.

IRS Plans to Expand W-2 Verification Code Pilot Program. For the 2017 filing season, the IRS plans to increase the number of Forms W-2 in the pilot program to 50 million, or approximately 20%, of the total forms that will be submitted.

APA Asks Pennsylvania to Reconsider Changes to Child Support Administrative Fees. See “Inside Washington” for December.

Update on DOJ Tax Division Employment Tax Enforcement Actions. Read about recently concluded Department of Justice (DOJ) Tax Division civil and criminal employment tax enforcement actions.

IRS Provides Guidance on ACA Requirements for Employers Hiring Seasonal Workers. The IRS guidance explains the effect of hiring seasonal workers on the status of an employer under the ACA. IRS Health Care Tax Tip 2016-77.

Court Rules Interns Were Not Employees. Wang v. Hearst Corp.

OCSE Posts FAQs for Bonus and Lump Sum Reporting. The Office of Child Support Enforcement (OCSE) has posted a new frequently asked questions (FAQs) webpage explaining employers’ responsibilities for bonus and lump sum reporting.

Payroll Solutions. Read a Q&A about the taxability of a forgiven loan to a terminated employee.

Leave Donation Program May Aid Victims of Hurricane Matthew. The IRS has issued guidance allowing donations of vacation, sick, or personal leave through a leave-based donation program to be made to charitable organizations for the relief of victims of Hurricane Matthew. Notice 2016-69.

IRSAC Recommendations Include Consistent Penalty Administration and Tax Fraud Prevention. Among the issues raised in IRSAC’s annual report are the need for consistency in penalty administration, and potential steps the IRS could take to prevent tax fraud, including the reporting of certain key employee information when quarterly Forms 941 are filed.

Federal Student Loan Law Ripe for Reform. See “Inside Washington” for December.

OCSE Publishes Guidance to Help Employers Send Child Support Payments Electronically.

ULC Posts Model State Garnishment Act. The Uniform Law Commission (ULC) has posted the approved final version of the Uniform Wage Garnishment Act (UWGA) to its website.

State Laws Can Require Employers to Pay Higher Minimum Wages to Disabled Workers. The U.S. DOL’s Wage & Hour Division has issued an Administrator’s Interpretation to clarify that an employer must comply with state laws that provide a higher minimum wage rate for disabled workers. Administrator’s Interpretation 2016-2.

Employees Should Be Paid for Donning, Doffing, and Shift Relief Even When Employer Pays for Other Meal Breaks. Smiley v. DuPont De Nemours & Co.

State and Local News.

  • Alaska – minimum wage increased
  • Arizona – minimum wage increased
  • Colorado – minimum wage increased
  • Delaware – withholding filing threshold changed
  • Kentucky – withholding tables issued
  • Maine – minimum wage, tip credit increased
  • Massachusetts – Forms W-2, annual reconciliation returns, filing deadlines accelerated
  • Minnesota – withholding tables and computer formula revised
  • Missouri – minimum wage, tip credit increased
  • New Jersey – reciprocity with Pennsylvania continued
  • Oregon – Forms W-2, annual reconciliation returns, filing deadlines accelerated
  • Rhode Island – Forms W-2, accelerated filing deadline adopted
  • South Dakota – minimum wage, tip credit increased
  • Washington – minimum wage increased

Also available are an Index for 2016, the latest Inside Washington, and the APA’s Monthly Calendar, offering compliance and professional development information.

With The Payroll Source® you’ll always know where the answers are.

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