Electronic Submission of W 2s & 1099s

Transcription

1 Electronic Submission of W 2s & 1099s Nicole Watson What s New? O Businesses < 50 W-2s & 1099s O Delayed implementation for tax year 2017 O Give small businesses more time to comply. O 2017 filing requirements the same as

2 Requirements for Tax Year 2017 What s New? Can IDR make filing easier? O Working with software vendors O register and test software prior to the 1/31/2018 filing deadline. O Guiding businesses required to file O Provide list of vendors who have completed testing O They offer software services for Iowa file formats. O 17 vendors so far 2

3 Vendor List O 1099 Pro, Inc. O Aatrix Software, Inc. O American HealthTech, Inc. O CFS Tax Software, Inc. O Drake Software O Financial MicroSystems, Inc. O Greatland Corporation O Heartland Inc. O IDMS Account Ability O Infor Global Solutions O Intuit O Kronos Inc. O MasterTax LLC/ADP O Real Business Solutions, Inc. O Sage O Solutions, Inc. O Thomson Reuters Tax and Accounting Tax Year 2017 Filing Requirements Who What Is it Required? Filing Due Date Business with a withholding permit Must file Verified Summary of Payments (VSP) Yes 1/31/2018 Business with 50 or more W-2s with Iowa withholding Must file W-2s Yes 1/31/2018 Business with fewer than 50 W-2s with Iowa withholding May file W-2s No 1/31/2018 Business with a withholding permit or filing though a bulk filer May file 1099s or W-2Gs No 1/31/2018 3

4 How should I prepare my file? O Do it yourself O Do you have an ASCII programmer on staff? O If not, use a service provider. O Service Providers O 17 vendors are currently registered O Vendors listed on the IDR website. O Filing extensions: Iowa Does Not Accept O Other types of files (for example, PDFs scanned or created with any other software product). O Paper W-2 wage statements and 1099 information returns. O CD-ROMs; Cartridges; Flash drives; Floppy disks; Magnetic media; PDF files created at SSA website. 4

5 Does Iowa Participate in Combined Reporting? O The SSA offers no Combined Reporting program for reporting W-2 wage statements to both the SSA and state revenue agencies. O The IRS offers Combined Federal/State Filing program (CF/SF) for reporting certain information returns to both the IRS and state revenue agencies. IDR does not participate in IRS program. What is the plan for 1099s? O 1099 filing is currently optional and available to O Any business registered with an Iowa withholding permit O Any business using a bulk filer to submit a 1099 file on their behalf O The Department will not issue permits and Business efile Numbers (BENs) for purposes of electronically filing 1099s or W-2s with no withholding. 5

6 1099s forms accepted O Form 1099-B, Proceeds From Broker and Barter Exchange Transactions O Form 1099-C, Cancellation of Debt O Form 1099-DIV, Dividends and Distributions O Form 1099-G, Certain Government Payments O Form 1099-INT, Interest Income O Form 1099-K, Payment Card and Third Party Network Transactions O Form 1099-MISC, Miscellaneous Income O Form 1099-OID, Original Issue Discount O Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Submitting Wage Statements and Information Returns 6

7 Upload a File O Visit the Department s efile & Pay web application at O You need your business Business E File Number (BEN) to login. Upload a File O If you are a Service Provider enter your BEN, not the BEN of your client. O Verify that the BEN and Employer Legal Name match the information for the W-2 Wage Statement file you are about to upload. 7

8 Upload a File O Enter the User ID and password. Upload a File O Select file type. Service providers select File for Client if uploading on behalf of a client. 8

9 Upload a File O Click Upload New File to upload a W-2 file. Upload a File O Click the Choose File button to select the file to upload. 9

10 Upload a File O Select the appropriate W-2 file for Iowa. In this example we are using IAW txt Upload a File O After you have selected your file, click the Upload button. 10

11 Upload a File O After uploading the file click the Refresh button to update the information on the page. Page contents will not update automatically. How Will I Know the Department Received my File? 11

12 Do I need authorization to upload my file to Iowa? O Transmitters registered as Bulk Filers with the IDR must use their own efile & Pay credentials to upload withholding returns, wage and tax statements, and information returns on behalf of their software subscribers. O Payroll Service Providers registered as Bulk Filers with the Iowa Department of Revenue must use their own efile & Pay credentials to upload withholding returns, wage and tax statements, and information returns on behalf of their clients. Do I need authorization to upload my file to Iowa? Companies registered to file Iowa withholding returns O Use your existing efile & Pay credentials O Upload wage and tax statements and information returns O Or use your software company to provide transmitter service. 12

13 Is a test file required? O Software vendors: Testing is required. O Software vendors (and commercial payroll service providers who develop their own software) are issued login credentials for use on an efile & Pay test site hosted in a User Acceptance Test (UAT) environment after they register their product(s) with the Iowa Department of Revenue. O Software customers: Testing is discretionary. Sample files may be uploaded through Iowa s production efile & Pay set to DEMO mode How Will I Know the Department Received my File? W-2 or 1099 Results File O For each W-2 or 1099 file Iowa receives, Iowa posts a corresponding results file, distinguished by the same filename as original W-2 file, but appended with results. e.g. IAW results.txt O Warning: If the results file doesn t appear, remember to click the REFRESH button. O Large files take longer to process, delaying the results file. O Extremely large files including errors may cause the system to time out. O Try uploading a smaller file in an effort to identify a common error. O Fix that error everywhere it occurs O Upload again. 13

14 How Will I Know the Department Received my File? Compressing files is optional O IDR recommends compressing files O Reduces transmission time O Only compress one data file into a single zip archive file. O Before zipping your file, name the original (unzipped file) according to the filename pattern described in O Archive filenames should match the original. O For example: IAW txt.zip; IAIR txt.zip Resources 14

15 Resources Visit the IDR website at Resources Visit the IDR website at 15

16 Resources Visit the IDR website at A business can: O Apply for Extension of Time to File Iowa W-2 Wage Statements O Sign up for updates on Electronic Filing of W-2 and 1099s O View step by step instructions regarding W-2 Wage Statement File Upload Instructions Resources Visit the IDR website at A software vendor can: O Access technical file specifications in the Electronic Reporting of Wage Statements and Information Returns O Register with the Department with the 2017 IA W e-file Vendor Registration Form O Apply to become a Bulk Filer of withholding returns or uploading of W-2/1099 files O View W-2 Reporting Errors 16

17 Information Online Information Online 17

18 THANK YOU!! Center for Agricultural Law and Taxation 2017 Legislative Update 18

19 2017 Legislative Update Income Taxes Non Conformity with Internal Revenue Code What is conformity? The calculation for Iowa net income relies on federal AGI To do this, the Iowa Code conforms with the IRC as it existed on a certain date In past years, the Iowa Code was updated annually to conform with the most recent IRC During the 2017 Iowa legislative session, lawmakers did not update the Iowa Code to conform with the most recent IRC The Iowa Code now conforms with the IRC as it existed on January 1,

20 Non Conformity with Internal Revenue Code Impact of Non Conformity for TY2017 and Beyond The federal Tax Cuts and Jobs Act was signed into law December 22, 2017; most provisions affect TY2018 and later Currently, Iowa does not conform with the Act During the 2018 legislative session, Iowa lawmakers will decide whether and how Iowa law will conform with the IRC, including the PATH Act and the Tax Cuts and Jobs Act The Department will provide updated information on conformity for TY2017 as soon as possible Non Conformity with Internal Revenue Code Impact of Non Conformity for TY2016 For MOST taxpayers, non conformity will not affect Iowa net income Taxpayers who claimed certain items for federal purposes must make adjustments when calculating Iowa net income For Iowa purposes, taxpayers must calculate federal AGI as if the PATH Act had never passed 20

21 Non Conformity with Internal Revenue Code Individual Income Tax Above the line deduction for qualified tuition and related expenses (sunset 12/31/16) Above the line deduction for teacher classroom expenses permanent and indexed Basis adjustment to stock of S corporations making charitable contributions permanent Bonus depreciation (sunset 12/31/19) Non Conformity with Internal Revenue Code Individual Income Tax continued Deduction for State and local general sales taxes made permanent Discharge of indebtedness on principal residence excluded from gross income (sunset 12/31/16) Earned Income Tax Credit permanent benefit for 3+ children and married households Energy efficient commercial building deduction (sunset 12/31/16) 21

22 Non Conformity with Internal Revenue Code Individual Income Tax continued Exclusion of 100% gain on small business stock permanent Expensing limitations for section 179 property made permanent and indexed Extend and expand charitable deduction for contributions of food inventory permanently Extend special rules for qualified conservation contributions permanently Parity for employer provided parking and mass transit benefits permanent Non Conformity with Internal Revenue Code Individual Income Tax continued Premiums for mortgage insurance deductible as qualified residence interest (sunset 12/31/16) Special allowance for second generation biofuel plant property (sunset 12/31/16) Tax free IRA distributions to certain public charities for individuals 70 1/2 or older permanent Work opportunity tax credit (sunset 12/31/19) 22

23 Non Conformity with Internal Revenue Code Corporate Income Tax 15 year depreciation for restaurant and retail improvements permanent Bonus depreciation (sunset 12/31/19) Energy efficient commercial building deduction (sunset 12/31/16) Exception under subpart F for active financing income permanent Expansion of reduction in S corporation recognition period for built in gains tax permanent Expensing limitations for section 179 property made permanent and indexed Non Conformity with Internal Revenue Code Corporate Income Tax continued Extend and expand charitable deduction for contributions of food inventory permanently Extend special rules for qualified conservation contributions permanently Look through treatment of payments between CFCs (sunset 12/31/19) Restriction on tax free spinoffs involving REITS Special allowance for second generation biofuel plant property (sunset 12/31/16) Work opportunity tax credit (sunset 12/31/19) 23

24 SF 505 First time Homebuyer s Savings Account Anyone can establish account Beneficiary must be Iowa resident No deposit limit Deduction limited to $2,000 or $4,000/year No financial institution requirements Effective for Tax Year 2018 HF 242 Political Checkoff Elimination Effective for Tax Year 2017 Fund is dissolved 24

25 HF 625 Dependent Heath Care Coverage Indicator Effective for Tax Year 2017 Removes reporting requirements, as well Geothermal Heat Pump Credit Federal credit was not renewed Iowa Geothermal Tax Credit (10% of expenses) comes into play for tax year 2017 Use IA 140 to file for Iowa credit. 25

26 Iowa Capital Gain Deduction Iowa Capital Gain Deduction Iowa individual income tax deduction for the entire net long term capital gain from sales of certain property Certain requirements must be met Complete form IA

27 Iowa Capital Gain Deduction IA 100A Cattle, Horses, or Breeding Livestock IA 100B Real Property Used in a Farm Business IA 100C Real Property Used in a Non Farm Business IA 100D Timber IA 100E Business IA 100F Employer Securities to a Qualified Iowa Employee Stock Ownership Plan IA 100A Cattle, Horses, or Breeding Livestock Eligible livestock sales: Horses and cattle held for at least 24 months and used for breeding, dairy, draft, or sporting purposes; and Other livestock (hogs, sheep, goats, etc.) held for at least 12 months and used for breeding purposes Qualifying taxpayer: More than 50% of the taxpayer s gross income came from farming or ranching operations; or Livestock were sold to a lineal descendant Report qualifying sales on IA 100A and affirm the holding period was met 27

28 IA 100B Real Property Used in a Farm Business Farmland held for at least 10 years Taxpayer materially participated in the farm business for at least the 10 years prior to the sale Cash rent landlord usually does not qualify Crop share landlord may qualify Direct participation or management in CRP may qualify Special rules for retired farmers and surviving spouses Report qualifying sales and participation on IA 100B Other Information 28

29 Standard Deduction Amounts 2016: Filing status 1 $1,970 Filing status 3 or 4 $1,970 for each spouse Filing status 2, 5, or 6 $4, : Filing status 1 $2,000 Filing status 3 or 4 $2,000 for each spouse Filing status 2, 5, or 6 $4,920 College Savings Iowa 529 Plan $3,188 per beneficiary for 2016 $3,239 per beneficiary for

30 Individual Income Tax Checkoffs Same four checkoffs for 2017 & 2018: Fish & Wildlife Fund (Chickadee Checkoff) Iowa State Fair Foundation (Corn Dog Checkoff) Joint Fire Fighter Preparedness Fund / Veterans Trust Fund Child Abuse Prevention Interest Rate 0.4% per month during % per month during

31 efiling Statistics for Current Processing Year 90% of individual income tax returns 70% of corporation income tax returns 22% of fiduciary tax returns Resources 31

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34 Like Us on Facebook Purpose of this Presentation This presentation is intended for general educational purposes only. Anyone involved in an audit or protest must contact the Department representative they are working with on that issue. 34

35 What Questions Do You Have? THANK YOU!! 35