Payroll Tax and Compliance Guide

Transcription

1 Payroll Tax and Compliance Guide

2 Dear BenefitMall Client, This tax and compliance guide has been designed to provide our payroll clients with access to important payroll planning and processing information. Enclosed you will find the following information: Payment Reporting and Taxability Charts Federal Tax Rates for Chart Pension Plan Limitations HSA - Healthcare Spending Accounts Information Foreign Employee Taxation FUTA Reduction States Please Note: The information contained in this booklet is accurate as of December 1,. The IRS and state agencies will continue to release updates through the end of. Please keep this in mind as you review the information provided. If you have questions regarding any of this information, please contact your dedicated Payroll Specialist directly. We wish you a safe and prosperous. The BenefitMall Team BenefitMall. All rights reserved. BenefitMall, the BenefitMall Logo, the BenefitMall ALL TOGETHER, BETTER Logo, the ALL Logo, ALL TOGETHER, BETTER and CompuPay are trademarks or registered trademarks of Centerstone Insurance and Financial Services, Inc. d/b/a BenefitMall or its affiliates in the U.S. California License # *All other trademarks are the property of their respective owners.

3 Table of Contents 3 Federal Payment Taxability 4 Federal Payment Reporting on Tax Forms 5 Federal Tax Rates 5 Pension Plan Limitations 6 Health Savings Accounts 6 Per Diem Rates 6 Employer Provided Fleet - FAVR 7 Taxation for Foreign Employees 8 Rates 13 FUTA Reduction States

4 Federal Payment Taxability Description FITW Social Security Tax Medicare Tax FUTA SITW SUI LITW Comments Other/miscellaneous X X X X X X X Group term life excess X X X ** X ** X ** ** State/local rules vary greatly and should be reviewed individually to ensure proper taxability Dependent care benefits (up to $5000/year) Dependent care benefits (over $5000/year) Nonqualified eligible 457(b) plan distributions Nonqualified ineligible 457(f) plan distributions Third-party sick pay (nontaxable at the federal level if funded with after tax employee contributions; taxable at federal and state level if funded with pre-tax employee contributions or if provided by the employer) see comments Cost of employer sponsored health coverage taxability Substantiated business expense payments (under accountable plan not exceeding specified gov t rates) Unsubstantiated/excess business expense payments Moving expense reimbursements (nontaxable) X X X X X X X X X X X X X X X X X ** X ** X ** ** State/local rules vary greatly and should be reviewed individually to ensure proper taxability * ** *** X X X X X X X Company owned vehicle (personal use) X X X X X X X 2% owner/shareholder health benefits (S-corp only) X X X X Company contributions to Archer MSA X X X Nonstatutory stock options excess X X X X X X X Employer contributions HSA (non-taxable) X X X Employer contributions HSA (taxable) X X X X X X X * NJ includes 3PS in taxable compensation; PA excludes 3PS from taxable compensation; all other states follow the federal rules for SITW ** State SUI rules vary greatly and should be reviewed individually to ensure proper taxability *** LITW follows state taxability Cost of Employer provided health care coverage. Not taxable for information purposes only X ** X ** X ** ** State/local rules vary greatly and should be reviewed individually to ensure proper taxability X ** ** X ** ** State/local rules vary greatly and should be reviewed individually to ensure proper taxability BenefitMall 3

5 Federal Payment Reporting on Tax Forms Description W-2 Box 1 W-2 Box 3 W-2 Box 5 W-2 Box 10 W-2 Box 11 W-2 Box 12 (use code) Other/miscellaneous X X X MISC 2, 5a, 5c 1, 4a, 4c 3 Group term life excess X X X C 2, 5a, 5c 1, 4a, 4c Dependent care benefits (up to $5000/year) Dependent care benefits (over $5000/year) Nonqualified eligible 457(b) plan distributions Nonqualified ineligible 457(f) plan distributions Third-party sick pay (employee contributions included in third-party sick pay) Cost of employer sponsored health coverage taxability Substantiated business expense payments Unsubstantiated/excess business expense payments Moving expense reimbursements (nontaxable) Company owned vehicle (personal use) 2% owner/shareholder health benefits (S-corp only) Company contributions to Archer MSA Nonstatutory stock options excess Employer contributions HSA (non- taxable) Employer contributions HSA (taxable) 3, 4 (report as GTL - $$$ ) X n/a n/a n/a X X X X 2, 5a, 5c 1, 4a, 4c 3 X X 2 1 n/a X X X X 2, 5a, 5c 1, 4a, 4c n/a J n/a n/a n/a 75 DD n/a n/a n/a L n/a n/a n/a 90 X X X 2, 5a, 5c 1, 4a, 4c 3 P W-2 Box 14 Form 941 (line) NTXMOVE XP n/a n/a 3, 4 (report as Moving Expense - $$$ ) X X X AUTO 2, 5a, 5c 1, 4a, 4c 3 X 2 1 3, 4 (report as Exempt Fringe - $$$ ) R n/a n/a n/a 90 X X X V 2, 5a, 5c 1, 4a, 4c 3 W n/a n/a n/a X X X W 2, 5a, 5c 1, 4a, 4c 4 Form 944 Form Exempt Code BenefitMall 4

6 Federal Tax Rates As of 12/01/ Tax Type FICA Limit OASDI % 117, ,700 MEDICARE % Unlimited Unlimited Medicare on s over 200K Single -2.35% 250K Married jointly 125K Married filing separate ( no employer portion required ) Medicare on s over 200K -2.35% Medicare on s over 200K -2.35% FUTA Limit/Rate 7, % Pension Plan Limitations 7, % IRA Contribution Limit $5,500 $5,500 IRA Catch-up Contributions $1,000 $1,000 IRA AGI Deduction Phase-out Starting at Joint Return $115,000 $95,000 Single/Head of Household $69,000 $59,000 SEP SEP Compensation $550 $550 SEP Maximum Compensation $260,000 $255,000 SIMPLE SIMPLE Maximum Contribution Limits $12,000 $12,000 Catch-up Contributions $2,500 $2, k, 403-b, Profit Sharing Plans 401k Plan or SAR - SEP Limits $17,500 $17,500 Annual Compensation $260,000 $255, b Elective Deferrals Limits $17,500 $17,500 Catch-up Contributions $5,500 $5,500 Defined Contribution Limits $52,000 $51,000 ESOP Limits $1,050,000 $210,000 $1,035,000 $205,000 Other Plans Highly Compensated Employee Threshold $115,000 $115,000 Defined Benefit Limits $210,000 $205,000 Key Employee $170,000 $165, Elective Deferrals $17,500 $17,500 Control employee - Board member or officer $105,000 $100,000 Control employee - Compensation base $210,000 $205,000 BenefitMall 5

7 Health Savings Accounts Healthcare Contribution Limits: Individual (self-only coverage) $3,300 $3,250 Family Coverage $6,550 $6,450 High Deductible Health Plans - Required Deductibles: Self-only Coverage $1,250 $1,250 Family Coverage $2,500 $2,500 Out of Pocket Maximum: Self-only Coverage $6,350 $6,250 Family Coverage $12,700 $12,500 Per Diem Rates Travel - High $251 $242 Travel - Other (Continental U.S.) $170 $163 Meals - High $65 $65 Meals - Other (Continental U.S.) $52 $52 Incidentals (Continental U.S.) $59 $59 Incidentals (Outside Continental U.S.) $65 $65 Standard Mileage Rates 56 /mile 56.5 /mile Standard Mileage for a Move or for Medical travel 23.5 /mile 24 /mile Lodging $83 $83 Meals & Incidentals $46-71 $46-$71 Employer Provided Fleet - FAVR Fleet Car Values $21,300 $21,200 Fleet Truck Values $22,600 $22,300 Standard Car Values Passenger Car $16,000 $16,000 Passenger Truck or Van/SUV $17,300 $17,000 Transportation Fringe Parking $250/month $245/month Mass Transit & Commuter Vehicle $130/month $245/month BenefitMall 6

8 Taxation for Foreign Employees Generally, workers must obtain Social Security Numbers, even if not subject to Social Security and Medicare taxes. This is necessary for reporting wages. Non-resident Aliens Type of Visa FICA FIT SIT SUTA FUTA A-1, A-2 (Diplomats and foreign gov t officials) EX TAX TAX TAX EX B-1 (Business) Not allowed to work in the US B-2 (Tourist) Not allowed to work in the US C-1 (Transit aliens) Not allowed to work in the US D-1 (Foreign transport company) EX EX EX EX EX (US transport company) TAX TAX TAX TAX TAX E-1 (Treaty trader) TAX TAX TAX TAX TAX E-2 (Treaty investor) TAX TAX TAX TAX TAX E-3 (Australian nationals) TAX TAX TAX TAX TAX F-1, J-1, M-1 (Student up to 5 years) EX TAX TAX TAX EX (Teacher/Trainee up to 2 years EX TAX TAX TAX EX G-1, G-2, G-3, G-4 (International org.) EX TAX TAX TAX EX H-1 A&B (Nurses/Skilled Professionals) TAX TAX TAX TAX TAX H-2 A&B (Temp/Non Agricultural/Skilled) H-3 (Trainees) TAX TAX TAX TAX TAX I Visa (Foreign correspondents) TAX TAX TAX TAX TAX L-1 (Iintracompany transfers) TAX TAX TAX TAX TAX O-1 (Extraordinary ability) TAX TAX TAX TAX TAX O-2 (Assistant to O-1 above) TAX TAX TAX TAX TAX P-1, P-2, P-3 (Entertainers & athletes) TAX TAX TAX TAX TAX Q-1, Q-2 (Cultural exchange visitors) (Student up to 5 years) EX TAX TAX TAX EX (Teacher/Trainee up to 2 years) EX TAX TAX TAX EX R-1 (Religious occupations - only employed by the religious organization that sponsored them) EX TAX TAX TAX EX TN (NAFTA professionals) TAX TAX TAX TAX TAX Nonresident aliens are allowed to only claim single status with one dependent exemption. Residents of Canada and Mexico who commute to work are not restricted to the S-1 status. Some countries have tax treaties with the U.S. which may exempt withholding (Form 8233 must be filed before work begins). A permanent resident (holder of Form I formerly known as a green card) is taxed exactly like a regular U.S. citizen. Foreign employees who are FICA and FUTA exempt, are also SUI exempt in all states except the following: Arkansas, Colorado, Florida, Maryland, Pennsylvania and Washington. BenefitMall 7

9 Rates State Comments Alabama Alabama follows federal. Alaska 7.75 N/A N/A Alaska s minimum wage must be at least 50 cents an hour more than the federal minimum wage. Arizona The minimum wage is adjusted annually for inflation. Arkansas Employers subject to the federal Fair Labor Standards Act, however, must pay employees the federal minimum wage ($7.25/hour). California 8.00 N/A N/A California s minimum wage increases to $9.00 effective 7/1/. Colorado Adjusted annually for inflation. Connecticut State issued. Delaware State issued. District of Columbia The District of Columbia s minimum wage is equal to the federal minimum wage rate plus $1. Florida Each Oct. 15, the Agency for Workforce Innovation will calculate an adjustment to the minimum wage rate based on the rate of inflation during the prior 12 months. The adjusted minimum wage rate will take effect on the following Jan. 1. Georgia 5.15 N/A N/A 5.15 N/A N/A Employers subject to the federal minimum wage, however, must pay employees $7.25/hour. Hawaii State issued. Idaho The amount of the minimum wage conforms to, and tracks with, the federal minimum wage. Illinois State issued. Indiana Employers must pay at least the federal minimum wage rate. Iowa State issued. Kansas State issued. Kentucky If the federal minimum wage increases above the state minimum wage, the state minimum wage becomes the same amount as the federal rate. BenefitMall 8

10 Rates (continued) State Comments Louisiana N/A N/A N/A N/A N/A N/A No state mandated minimum wage. Maine State issued. Maryland Employees must be paid the greater of the state minimum wage or the federal minimum wage. Massachusetts The minimum wage rate in Massachusetts cannot be less than the federal minimum wage plus $0.10. Michigan State issued. Estimated to increase every six months until the minimum wage reaches $10 by January 1, Minnesota N/A Large employers covered by Minnesota s minimum wage law must pay employees at least $6.15 an hour and small employers must pay employees at least $5.25 per hour. Mississippi N/A N/A N/A N/A N/A N/A No state mandated minimum wage. Missouri The rate is adjusted annually for inflation based on the consumer price index. If the federal minimum wage is higher than the state minimum wage, Missouri s minimum wage will increase to match. Montana N/A N/A The state minimum wage is adjusted annually for inflation. The minimum wage rate for employees of businesses with annual gross sales of $110,000 or less is $4 an hour. However, if an individual employee is producing or moving goods between states or otherwise covered by the Fair Labor Standards Act, that employee must be paid the greater of either the federal minimum wage or Montana s minimum wage. Farm workers can be paid a minimum monthly salary of $635. Nebraska State issued. BenefitMall 9

11 Rates (continued) State Comments Nevada 8.25 N/A N/A N/A Employers must pay $7.25 an hour to employees covered by Nevada s minimum wage law. Employers that do not provide health benefits must pay employees $8.25 an hour. The state minimum wage rates are adjusted annually for inflation on July 1. Each of the minimum wage rates will increase by the same dollar amount as a federal rate increase or by a cost of living adjustment, whichever is greater. Cost of living adjustments for any one-year period, however, cannot exceed three percent. New Hampshire New Hampshire s minimum wage is linked to the federal minimum wage and the state does not set its own minimum wage. New Jersey State issued. New Mexico State issued. New York New York s hourly minimum wage increases from $7.25 to $8.00 on 12/31/13; to $8.75 on 12/31/14; and to $9.00 on 12/31/15. Effective 12/31/13, the New York tip credit for food service workers increases to $3.00; it increases to $3.75 as of 12/31/14 and to $4.00 on 12/31/15. North Carolina Employees must be paid at least $7.25 an hour or the federal minimum wage, whichever is higher. North Dakota State issued. Ohio Starting Jan. 1,, Ohio s minimum wage will be $7.95 an hour; however, employers with annual gross receipts of $283,000 or less can pay employees the federal minimum wage rate of $7.25 an hour. Oklahoma Employers must pay employees at least $7.25 an hour. The state minimum wage equals the federal minimum wage currently. BenefitMall 10

12 Rates (continued) State Comments Oregon 9.10 N/A N/A 8.95 N/A N/A The rate is adjusted annually for inflation based on the consumer price index. Pennsylvania If the federal minimum wage increases above the state s minimum wage, the state s minimum wage will increase to the same amount effective on the same date as the federal increase. Puerto Rico Employers must pay employees covered by the federal Fair Labor Standards Act at least $7.25 an hour. Employers must pay employees who are not covered under the FLSA at least 70 percent of the current minimum wage. The secretary of labor is authorized to reduce this percentage. Establishments permitted to open on Sundays must pay employees $11.50 an hour. Employers that own and exclusively operate a business, or businesses that have no more than 25 employees on the payroll, are exempt from this requirement. Rhode Island State issued. South Carolina N/A N/A N/A No state mandated minimum wage. South Dakota State issued. Tennessee State follows federal. Texas State issued. U.S. Virgin Islands 7.25 N/A N/A Utah State issued. Vermont On each Jan. 1, the minimum wage increases by 5 percent or by the change in the CPI-U (all urban consumers) over the year ended the prior September, whichever amount is smaller. The federal minimum wage applies if it is higher than the legislated state minimum wage. Virginia 7.25 N/A N/A 7.25 State issued. BenefitMall 11

13 Rates (continued) State Comments Washington 9.32 N/A N/A 9.19 N/A N/A The minimum wage is subject to annual increases based on the CPI-W. Employers can pay employees ages 14 and 15 the higher of the federal minimum wage or 85 percent of the state minimum wage. West Virginia State issued. Wisconsin State issued. Wyoming Employees must be paid at least $5.15 an hour. Employers subject to the federal minimum wage, however, must pay employees an hourly wage of $7.25 an hour. (5.15= 2.13 tipped minimum and 3.02 credit). Values which are bolded indicate a change. Federal Federal minimum wage prevails for any states that have a minimum wage lower than the current federal minimum or for states that do not have an established minimum wage requirement. BenefitMall 12

14 FUTA Reduction States State Alabama 5.4% 5.4% 5.4% Alaska 5.4% 5.4% 5.4% Arizona 5.4% 5.1% 5.4% Arkansas 4.5% 4.8% 5.1% California 4.5% 4.8% 5.1% Colorado 5.4% 5.4% 5.4% Connecticut 4.5% 4.8% 5.1% Delaware 4.8% 5.1% 5.4% Dist. of Columbia 5.4% 5.4% 5.4% Florida 5.4% 4.8% 5.1% Georgia 4.5% 4.8% 5.1% Hawaii 5.4% 5.4% 5.4% Idaho 5.4% 5.4% 5.4% Illinois 5.4% 5.4% 5.1% Indiana 4.2% 4.5% 4.8% Iowa 5.4% 5.4% 5.1% Kansas 5.4% 5.4% 5.4% Kentucky 4.5% 4.8% 5.1% Louisiana 5.4% 5.4% 5.4% Maine 5.4% 5.4% 5.4% Maryland 5.4% 5.4% 5.4% Massachusetts 5.4% 5.4% 5.4% Michigan 5.4% 5.4% 4.5% Minnesota 5.4% 5.4% 5.1% Mississippi 5.4% 5.4% 5.4% Missouri 4.5% 4.8% 5.1% State Nebraska 5.4% 5.4% 5.4% Nevada 5.4% 4.8% 5.1% New Hampshire 5.4% 5.4% 5.4% New Jersey 5.4% 4.8% 5.1% New Mexico 5.4% 5.4% 5.4% New York 4.5% 4.8% 5.1% North Carolina 4.5% 4.8% 5.1% North Dakota 5.4% 5.4% 5.4% Ohio 4.5% 4.8% 5.1% Oklahoma 5.4% 5.4% 5.4% Oregon 5.4% 5.4% 5.4% Pennsylvania 5.4% 5.4% 5.1% Puerto Rico 5.4% 5.4% 5.4% Rhode Island 4.5% 4.8% 5.1% South Carolina 5.4% 5.4% 5.4% South Dakota 5.4% 5.4% 5.4% Tennessee 5.4% 5.4% 5.4% Texas 5.4% 5.4% 5.4% U.S. Virgin Islands 4.2% 3.9% 5.1% Utah 5.4% 5.4% 5.4% Vermont 5.4% 5.1% 5.4% Virginia 5.4% 5.4% 5.1% Washington 5.4% 5.4% 5.4% West Virginia 5.4% 5.4% 5.4% Wisconsin 4.5% 4.8% 5.1% Wyoming 5.4% 5.4% 5.4% Montana 5.4% 5.4% 5.4% FUTA credit reduction states are listed in blue. BenefitMall 13