US employment tax rates and limits for Final

Transcription

1 US employment tax rates and limits for 2014 Final

2 Contents Social Security wage base for Qualified pension plan limits for Federal mileage rates 3 Health Savings Account limits for 2014 and Other fringe-benefit inflation adjustments for Per diem rates under high-low substantiation 6 method for FUTA credit reduction states 8 State unemployment insurance 10 wage base limits for 2014 Federal income tax withholding tables 12 for 2014 Supplemental income tax withholding rates 14 for 2014 States with revised income tax withholding 16 tables in 2014

3 Social Security wage base for 2014 The Social Security wage base will increase from $113,700 to $117,000 in 2014, higher than the $115,500 projected in the May 2013 Annual Report of The Board of Trustees. The increase in the wage base of $3,300 is estimated to result in higher taxes for about 10 million workers. The Medicare tax rate for 2014 remains at 1.45% of all covered earnings for employers and employees. Effective in 2013, the Additional Medicare Tax of 0.9% applies to earned income of more than $200,000 ($250,000 for married couples filing jointly). Employers withhold this tax on wages in excess of $200,000 regardless of an employee s filing status. See below for a quick reference chart. Social Security, Medicare and disability insurance contributions 2014 compared with 2013 Description Increase Social Security tax rate for employees 6.20% 6.20% -0- Social Security tax rate for employers Social Security wage base Maximum Social Security tax for employees Medicare tax rate for employers Medicare tax rate for employees 6.20% 6.20% -0- $117,000 $113,700 $3,300 $7, $7, $ % 1.45% %* 1.45% -0- Medicare wage base No limit No limit N/A * Employers must withhold an additional Medicare tax of 0.9% of wages in excess of $200,000. There is no employer matching contribution. For the complete Social Security Administration fact sheet go here. For related information see our special report here. US employment tax rates and limits for 2014 Final 1

4 Qualified pension plan limits for 2014 IRS releases the qualified retirement plan limitations for year 2014 The dollar limitations for qualified retirement and certain nonqualified plans that become effective January 1, 2014, were released by the IRS (see IR at The dollar limitations that are adjusted by reference to IRC 415(d) are adjusted for inflation, and consequently many of the pension plan limitations will change for 2014 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustments. Plan participants in qualified retirement plans will need to consider the impact of the 2014 dollar limitations in their overall financial planning. The pretax limit that applies to elective deferrals to 401(k), 403(b) and most 457(b) plans remains at $17,500. The dollar limitation for catch-up contributions for participants age 50 or over also remains unchanged at $5,500. A complete summary of the cost-of-living adjustments applicable to dollar limitations for qualified retirement plans and other items for 2014 is is provided on the right. Footnotes 1 For a participant who separated from service before January 1, 2014, the participant s limitation under a defined benefit plan under IRC 415(b)(1)(B) is computed by multiplying the participant s compensation limitation, as adjusted through 2013, by For eligible participants in certain governmental plans that allow cost-of-living adjustments to the compensation limit to be taken into account, such a limit increases from $380,000 to $385,000. Qualified retirement plan limitations (2013 vs. 2014) Description 2013 limit 2014 limit Participant pretax contribution limit for 401(k) $17,500 $17,500 and 403(b) plans Section 402(g)(1) Deferral limit for deferred compensation plans of $17,500 $17,500 state and local governments and tax-exempts Section 457(e)(15) Dollar limitation for catch-up contributions for $5,500 $5,500 participants age 50 or over in 401(k), 403(b), governmental 457 plans and SEPs Section 414(v)(2)(B)(i) Dollar limitation for catch-up contributions for $2,500 $2,500 participants age 50 or over to a SIMPLE IRA or a SIMPLE 401(k) Section 414(v)(2)(B)(ii) Defined benefit plan limit 1 Lesser of $205,000 Lesser of $210,000 Section 415(b)(1)(A) or 100% of the or 100% of the participant s three-yearhigh participant s three-year- compensation high compensation Defined contribution plan limit Section 415(c)(1)(A) Maximum ESOP account balance is subject to a five-year distribution period/increments for additional year Section 409(o)(1)(C)(ii) Highly-compensated-employee dollar threshold Section 414(q)(1)(B) Definition of key employee in a top-heavy plan officer compensation threshold Section 416(i)(1)(A)(i) Annual limit on includable compensation for benefits and allocations 2 Sections 401(a)(17), 404(l), 408(k)(3)(C) and 408(k)(6)(D)(ii) SEP employee participation floor Section 408(k)(2)(C) SIMPLE retirement accounts contribution limit Section 408(p)(2)(E) Compensation amount of control employees for fringe-benefit valuation purposes Treas. Reg. Section (f)(5)(i) and (iii) Lesser of $51,000 or 100% of the participant s compensation Lesser of $52,000 or 100% of the participant s compensation $1,035,000/$205,000 $1,050,000/$210,000 $115,000 $115,000 $165,000 $170,000 $255,000 $260,000 $550 $550 $12,000 $12,000 $100,000/$205,000 $105,000/$210,000 2 US employment tax rates and limits for 2014 Final

5 Federal 2014 mileage rates Effective January 1, 2014, the business standard mileage rate (including vans, pickup trucks and panel trucks) decreases from $0.565 per mile to $0.560, and the medical and relocation rate also decreases from $0.240 per mile to $ Mileage related to charity is set by law and remains at $0.140 per mile. (IRS Notice ) Note that the business standard mileage rate may not be used (1) after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS), (2) after claiming an IRC 179 deduction for that vehicle, or (3) for more than four vehicles used simultaneously. (Rev. Proc ) Summary of mileage rates 2013 compared with 2014 Type of mileage Effective January 1, 2013 Effective January 1, 2014 Business standard $0.565 $0.560 Charity $0.140 $0.140 Relocation and medical $0.240 $0.235 US employment tax rates and limits for 2014 Final 3

6 Health Savings Account limits for 2014 and 2015 Health savings account limit type Contribution Self $3,300 $3,350 Family $6,550 $6,650 Out-of-pocket Self $6,350 $6,450 Family $12,700 $12,900 Deductible (high deductible health plan) Self $1,250 $1,300 Family $2,500 $2,600 4 US employment tax rates and limits for 2014 Final

7 Other fringe-benefit inflation adjustments for 2014 In Revenue Procedure , the IRS published the inflation adjustments that will apply to various fringe benefits in medical savings account (MSA) limits Summarized below are the 2014 limits that apply to MSAs. Provision Self-only coverage Family coverage Annual deductible as defined in IRC 220(c)(2)(A) Annual out-of-pocket (other than for premiums) Adoption assistance Not less than $2,200 and not more than $3,250 Not less than $4,350 and not more than $6,550 Not to exceed $4,350 Not to exceed $8,000 The limit on qualified adoption assistance for 2014 is $13,190, up from $12,970 in Health flexible spending accounts The 2014 annual limit on the amount of pretax contributions employees can make toward their health flexible spending account under a cafeteria plan is $2,500, unchanged from Transportation fringe benefits The 2014 monthly limit on parking benefits is $250, up from $245 in The 2014 aggregate monthly limit for transportation in a commuter highway vehicle and any transit pass was $130, down from $245 in On December 19, 2014, legislation was enacted that retroactively increased this limit to $250, in parity with the 2014 limit on parking benefits. (Public Law No: ) US employment tax rates and limits for 2014 Final 5

8 Per diem rates under high-low substantiation method for 2014 In Notice , the IRS released the per diem reimbursement rates that will apply effective October 1, 2013 (or, optionally, January 1, 2014). The per diem reimbursement rate for high-cost areas increases to $251 and to $170 for low-cost areas. There were also a number of changes to the areas that qualify as high cost. The per diem rates for each locality of travel both within and outside of the United States can be found at Federal per diem rates under the high-low substantiation method for 2014 Description High-cost area* Low-cost area Lodging, meals and incidentals $251 $170 Lodging only $186 $118 Meals and incidentals only $65 $52 Incidental expenses only** $5 $5 *For high-cost areas, see the table at the right. **Rate applies only when a meal expense allowance is not provided. High-cost localities of travel under the high-low substantiation method (effective October 1, 2013) Key city Arizona Sedona (March 1 April 30) California Monterey (July 1 Aug. 31) Napa (Oct. 1 Nov. 30; April 1 Sept.30) San Diego San Francisco Santa Barbara Santa Cruz (June 1 Aug. 31) Santa Monica Yosemite National Park (June 1 Aug. 31) Colorado Aspen (Dec. 1 March 31; June 1 Aug. 31) Denver/Aurora Steamboat Springs (Dec. 1 March 31) Telluride (Dec. 1 March 31; June 1 Sept. 30) Vail (Dec. 1 Aug. 31) District of Columbia Washington, DC County/other defined location City limits of Sedona Monterey Napa San Diego San Francisco Santa Barbara Santa Cruz City limits of Santa Monica Mariposa Pitkin Denver, Adams, Arapahoe and Jefferson Routt San Miguel Eagle Also the cities of Alexandra, Falls Church and Fairfax and the counties of Arlington and Fairfax in Virginia, and the counties of Montgomery and Prince George s in Maryland (see also Maryland and Virginia) 6 US employment tax rates and limits for 2014 Final

9 Per diem rates under high-low substantiation method for 2014 Continued Key city County/other defined location Key city County/other defined location Florida New York Boca Raton/Delray Beach/Jupiter (Jan. 1 April 30) Floral Park, Garden City and Great Neck Nassau Fort Lauderdale (Jan. 1 May 31) Broward Glens Falls (July 1 Aug. 31) Warren Fort Walton Beach/DeFuniak Springs (June 1 July 31) Okaloosa and Walton Lake Placid (July 1 Aug. 31) Essex Key West Miami (Dec. 1 March 31) Naples (Jan. 1 April 30) Illinois Chicago (Oct. 1 Nov. 30; March 1 Sept. 30) Louisiana New Orleans (Oct. 1 June 30) Monroe Miami-Dade Collier Cook and Lake Orleans, St. Bernard, Jefferson and Plaquemine parishes Manhattan (includes boroughs of Manhattan, Brooklyn, the Bronx, Queens, Staten Island) Saratoga Springs/Schenectady (July 1 Aug. 31) Tarrytown/White Plains/New Rochelle North Carolina Kill Devil (June 1 Aug. 31) Pennsylvania Philadelphia Bronx, Kings, New York, Queens, Richmond Saratoga and Schenectady Westchester Dare Philadelphia Maine Rhode Island Bar Harbor (July 1 Aug. 31) Hancock Jamestown, Middletown and Newport (Oct. 1 Oct. 31; May 1 Sept. 30) Newport Maryland South Carolina Baltimore City (Oct. 1 Nov. 30; March 1 Sept. 30) Baltimore City Charleston (May 1 May 31) Charleston, Berkeley and Dorchester Cambridge/St. Michaels (June 1 Aug. 31) Ocean City (June 1 Aug. 31) Washington, DC, metro area Massachusetts Boston/Cambridge Falmouth (July 1 Aug. 31) Dorchester and Talbot Worcester Montgomery and Prince George s Suffolk, City of Cambridge City limits of Falmouth Texas Midland Utah Park City (Dec. 1 March 31) Virginia Washington, DC, metro area Summit Cities of Alexandria, Fairfax and Falls Church; counties of Arlington and Fairfax Martha s Vineyard (June 1 Aug. 31) Dukes Virginia Beach (June 1 Aug. 31) City of Virginia Beach Nantucket (June 1 Sept. 30) New Hampshire Conway (July 1 Aug. 31) Nantucket Carroll Washington Seattle Wyoming Jackson/Pinedale (July 1 Aug. 31) King Teton and Sublette US employment tax rates and limits for 2014 Final 7

10 2014 FUTA credit reduction states The US Department of Labor announced on November 10, 2014, that employers in seven states and the Virgin Islands will pay their FUTA taxes for calendar year 2014 at a higher federal unemployment (FUTA) tax rate than employers in other states because the states failed to repay their outstanding federal UI loans by November 10, This is down from the 13 states and the Virgin Islands that had credit reductions for calendar year The increased 2014 FUTA taxes are due from employers with their fourth quarter 2014 federal unemployment tax deposit, due February 2, (States with 2014 Federal Unemployment Tax Act (FUTA) credit reductions, US Department of Labor, November 10, 2014.) All the states that requested a waiver of the additional Benefit Cost Rate (BCR) were approved for the waiver. Connecticut did not request the waiver, and as a result, employers in this state will pay at a significantly higher FUTA rate than in other states that began borrowing in and were subject to the BCR. In addition to the BCR waiver, South Carolina again requested, and received, avoidance of the FUTA credit reduction altogether. For more information concerning the FUTA credit reduction read our special report here. State Credit reduction 2014 net FUTA rate California 1.2% 1.8% Connecticut 1.7% 2.3% Indiana 1.5% 2.1% Kentucky 1.2% 1.8% New York 1.2% 1.8% North Carolina 1.2% 1.8% Ohio 1.2% 1.8% Virgin Islands 1.2% 1.8% Details The Social Security Act requires a reduction in the FUTA tax credit when a state has outstanding federal loans for two consecutive January 1st. The reduction in the FUTA tax credit is 0.3% for the first year and an additional 0.3% (or more) for each succeeding year until the loan is repaid. Federal law discourages states from carrying their loan balances over several years by further reducing the FUTA credit beginning in the fifth year of the loan. This add-on to the FUTA credit reduction is referred to as the Benefit Cost Rate (BCR). The BCR triggered on this year for all of the borrowing states (except Delaware) which began borrowing in The BCR penalty may be waived if the state s governor submits an application to the US Secretary of Labor no later July 1 of the penalty year; and the state takes no action (legislative, judicial, or administrative) during the 12-month period ending September 30 that would reduce UI trust fund solvency during that same time period. Should the BCR add-on be waived, as is normally the case if the conditions are met, another penalty, referred to as the 2.7 add-on (that was imposed on the Virgin Islands for ), can kick in if the state s average UI tax rate is inadequate this penalty rate cannot be avoided or waived if triggered recap For 2014, fifteen states and the Virgin Islands faced a potential FUTA credit reduction because there was an outstanding loan balance as of January 1, Seven states (Arkansas, Delaware, Georgia, Missouri, New Jersey, Rhode Island and Wisconsin) repaid their outstanding advances before November 10, 2014, thereby eliminating any FUTA credit reduction for Six states and the Virgin Islands that began borrowing in 2009 and had an outstanding loan balances on January 1 in each of the years of 2010 through 2014, have a 1.2% credit reduction for Indiana and South Carolina, which began borrowing in 2008 and had an outstanding loan balance on January 1 in each of the years of 2009 through 2014, faced a 1.5% credit reduction for However, only Indiana employers will see the FUTA credit reduction, as South Carolina again requested and received avoidance of the FUTA credit reduction for As a result, although the state still has an outstanding loan balance, South Carolina employers will pay at the minimum net FUTA rate of 0.6% for All states that requested a waiver of the BCR add-on for 2014 were found eligible for the waiver. Connecticut did not request the BCR waiver, and as a result, employers in this state will have 0.5% added to their FUTA rate (in addition to the normal 1.2% credit reduction), for a total FUTA rate of 2.3%. No state for 2014 faces the special 2.7 add-on for having an average state UI rate that is lower than allowed under federal law (as the Virgin Islands did for ). 8 US employment tax rates and limits for 2014 Final

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12 2014 state unemployment taxable wage bases Here is the final list of the 2014 state unemployment insurance (SUI) taxable wage bases and employee SUI withholding rates, if applicable. For the latest state unemployment insurance facts in your state, go to SUI taxable wage bases, 2014 vs State Alabama 8,000* 8,000* % increase/ decrease Alaska 37,400 36, % 0.62% Arizona 7,000* 7,000* Arkansas 12,000* 12,000* California 7,000* 7,000* Colorado 11,700 11, % Connecticut 15,000* 15,000* Delaware 8 18,500 10,500* 76.20% District of Columbia 9,000* 9,000* Florida 8,000* 8,000* Georgia 9,500* 9,500* Hawaii 40,400 39, % Idaho 35,200 34, % Illinois 12,960 12, % Indiana 9,500* 9,500* Iowa 26,800 26, % Kansas 7 8,000* 8,000* Kentucky 1 9,600 9, % Louisiana 7,700 7,700 Maine 12,000* 12,000* Maryland 8,500* 8,500* Massachusetts 14,000* 14,000* Michigan 9,500* 9,500* Minnesota 29,000 29,000 Mississippi 14,000* 14,000* Missouri 13,000* 13,000* Montana 29,000 27, % Nebraska 9,000* 9,000* Nevada 27,400 26, % New Hampshire 14,000* 14,000* 2014 employee contribution rates New Jersey 31,500 30, % Employee SUI withholding rate is 0.425% on wages up to $31, US employment tax rates and limits for 2014 Final

13 % increase/ State decrease New Mexico 23,400 22, % New York 10,300 8, % North Carolina 21,400 20, % North Dakota 33,600 31, % Ohio 9,000* 9,000* Oklahoma 18,700 20,100 (7.49%) Oregon 35,000 34, % 2014 employee contribution rates Pennsylvania 8, , % Employee SUI withholding 0.07% on total wages Puerto Rico 7,000* 7,000* Rhode Island 20, , % South Carolina 2 12,000 12,000 South Dakota 3 14,000 13, % Tennessee 9,000* 9,000* Texas 9,000* 9,000* Utah 30,800 30, % Vermont 16,000* 16,000* Virginia 8,000* 8,000* Virgin Islands 22,500 23,600 (4.88%) Washington 41,300 39, % West Virginia 12,000* 12,000* Wisconsin 14,000 14,000 Wyoming 24,500 23, % FUTA 7,000* 7,000* * Law sets the taxable wage base; legislation would be necessary to change. Footnotes: 1 Kentucky. The taxable wage base will continue to increase by $300 each calendar year until the taxable wage base reaches $12,000 in South Carolina. The taxable wage base will increase to $14,000 for South Dakota. The taxable wage base will increase by $1,000 per year through 2015: 2010 = $10,000; 2011 = $11,000; 2012 = $12,000; 2013 = $13,000; 2014 = $14,000; 2015 = $15, Pennsylvania. The taxable wage base will increase to $9,000 for calendar year 2015, $9,500 for calendar year 2016, $9,750 for calendar year 2017, and $10,000 for calendar year 2018 and after. 5 New Jersey. Employee rate includes the Workforce Development/Supplemental Workforce Funds surcharge. 6 Rhode Island. Employers assigned the maximum tax rate of 9.79% pay unemployment taxes up to a taxable wage base of $22,100 for Kansas. The taxable wage base will increase to $12,000 in 2015 and to $14,000 in Delaware. Legislation enacted in mid-august 2013 changes the determination of the SUI taxable wage base from a set amount of $10,500 to a range of $10,500 to $18,500 for calendar year 2014 and beyond by tying the wage limit to the balance of the state s unemployment trust fund the higher the trust fund balance, the lower the taxable wage base. US employment tax rates and limits for 2014 Final 11

14 Federal withholding rates for 2014 The IRS has released the 2014 Publication 15, Circular E, Employer s Tax Guide. Here is what you need to know about withholding federal tax from wages. Social Security and Medicare tax As previously reported, the 2014 Social Security wage base increases to $117,000. The Social Security and Medicare tax rates for both the employer and the employee remain unchanged, at 6.2% and 1.45%, respectively. Also unchanged is the Additional Medicare Tax. Employers are required to withhold Additional Medicare Tax of 0.9% on wages in excess of $200,000. There is no employer contribution. For our guide to the 2014 federal and state rates and limits, go to our year-end resource hub here. Nonresident alien employee income tax calculation For 2014, apply the following procedure to figure the amount of federal income tax to withhold from the wages of nonresident alien employees performing services within the US. Use the chart below in addition to the withholding tables used to figure federal income tax withholding on the wages of nonresident alien employees. Note: Nonresident alien students from India and business apprentices from India are not subject to this procedure. Amount to add to nonresident alien employees wages for calculating 2014 income tax withholding only Payroll period Add additional Daily or miscellaneous $8.70 Weekly $43.30 Biweekly $86.50 Semimonthly $93.80 Monthly $ Quarterly $ Semiannually $1, Annually $2, annual percentage method withholding The following is a reprint of the tax year 2014 annual percentage method of federal income tax withholding. Withholding allowances Payroll period One withholding allowance Daily or miscellaneous $15.20 Weekly $76.00 Biweekly $ Semimonthly $ Monthly $ Quarterly $ Semiannually $1, Annually $3, US employment tax rates and limits for 2014 Final

15 Table 7 Annual payroll period (a) Single person (including head of household) If the amount of wages (after subtracting withholding allowances) is: Not over $2,250 $-0- The amount of income tax to withhold is: Over But not over Of excess over $2,250 $11,325 $ % $2,250 $11,325 $39,150 $ % $11,325 $39,150 $91,600 $5, % $39,150 $91,600 $188,600 $18, % $91,600 $188,600 $407,350 $45, % $188,600 $407,350 $409,000 $117, % $407,350 $409,000 And over $118, % $409,000 (b) Married person If the amount of wages (after subtracting withholding allowances) is: Not over $8,450 $-0- The amount of income tax to withhold is: Over But not over Of excess over $8,450 $26,600 $ % $8,450 $26,600 $82,250 $1, % $26,600 $82,250 $157,300 $10, % $82,250 $157,300 $235,300 $28, % $157,300 $235,300 $413,550 $50, % $235,300 $413,550 $466,050 $109, % $413,550 $466,050 And over $127, % $466,050 US employment tax rates and limits for 2014 Final 13

16 State supplemental income tax withholding rates for 2014 Comparable to the optional flat rate of 25% (for 2013 and 2014) that can be used for computing federal income tax withholding on supplemental wages such as bonuses, some states also allow for a fixed supplemental rate of income tax withholding. Following is our 2014 survey of states that allow for the optional use of the supplemental withholding method and the rates that apply for Changes since our 2013 survey are highlighted in yellow. (Much of this information was obtained by Ernst & Young LLP during the course of informal telephone or surveys with state governmental agencies. Although telephone and surveys are useful in determining how government departments currently treat an issue, answers and positions derived from such surveys are not binding upon the state, cannot be cited as precedent and may change over time and hence cannot be relied upon.) Ernst & Young LLP survey States offering a supplemental withholding tax rate option* (as of January 7, 2014) Changes between the 2013 and 2014 survey are highlighted in yellow State supplemental withholding tax rate options for 2014 State State contact number Alabama % Arkansas % California Supplemental wages or Supplemental withholding tax rate for % Bonus and stock options 10.23% Colorado % Georgia Annual wages: under $8, % $8,000 $10, % $10,000 $12, % $12,000 $15, % Over $15, % Idaho % Illinois % Indiana % Iowa % Kansas % Maine % Maryland (1) MD resident 5.75% plus local WH rate Massachusetts % Michigan % Minnesota % Missouri % Montana % Nebraska % New Mexico % New York (2) % North Carolina % North Dakota % Ohio % 14 US employment tax rates and limits for 2014 Final

17 State supplemental withholding tax rate options for 2014 State State contact number Oklahoma % Oregon % Pennsylvania % Rhode Island % Supplemental withholding tax rate for 2014 South Carolina % Vermont (3) % of federal withholding Virginia % West Virginia Annual wages: under $10, % $10,000 $24, % $25,000 $39, % $40,000 $60, % Over $60, % Wisconsin Annual wages: under $10, % $10,220 $20, % $20,440 $153, % $153,280 $224, % $225,000 and over 7.75% * There is no supplemental rate of withholding for Arizona, Connecticut, Delaware, District of Columbia, Hawaii, Kentucky, Louisiana, Mississippi, New Jersey, Puerto Rico or Utah. Footnotes (1) Maryland: For lump-sum distributions, withhold at 7.0% for nonresidents, 3.20% for residents employed in Delaware, and 5.75% plus local rate for residents working in Maryland. (2) New York: For state withholding tax purposes, the supplemental withholding rate is 9.62%. For New York City residents, the supplemental withholding rate is 4.25%. For City of Yonkers, the resident supplemental withholding rate is 1.443%, and for nonresidents, 0.50%; effective August 1, 2014, the resident supplemental withholding rate increased to % and the nonresident rate was unchanged. (3) Vermont: According to the Department of Taxes 2013 income tax withholding booklet and Publication TB 23 (revised January 2013), the supplemental withholding rate was 27% of the federal withholding amount for supplemental and nonperiodic payments. US employment tax rates and limits for 2014 Final 15

18 States with 2014 revised income tax withholding tables The following chart summarizes the states that have issued revised income tax withholding tax tables and/or instruction guides for tax year If you do not have a copy of the state s revised income tax withholding guide for tax year 2014, see the link in the chart below. For more tips on items to watch out for as we begin a new year, see the EY 2013 payroll checklist here. (Much of this information was obtained by Ernst & Young LLP during the course of informal telephone or surveys with state governmental agencies. Although telephone and surveys are useful in determining how government departments currently treat an issue, answers and positions derived from such surveys are not binding upon the state, cannot be cited as precedent and may change over time and hence cannot be relied upon.) States with revisions to their 2014 income tax withholding tables State California Connecticut Delaware District of Columbia Illinois Indiana (effective 10/01/13 01/01/14) Kansas Kentucky Maine Maryland Massachusetts Michigan Minnesota Missouri New Mexico New York (state and City of Yonkers) North Carolina North Dakota Ohio (effective 01/01/14) Ohio (effective 07/01/14) Oklahoma Oregon Puerto Rico Rhode Island Wisconsin (effective 04/01/2014) Vermont Website Tables/Percentage_Method.shtml NEW%20MEXICO%20 WITHHOLDING%20TAX_ pdf US employment tax rates and limits for 2014 Final

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20 Ernst & Young LLP employment tax advisory contacts Mary Angelbeck Anthony Arcidiacono Peter Berard Gregory Carver Bryan De la Bruyere Jennie DeVincenzo Richard Ferrari David Germain Julie Gilroy Ken Hausser Nicki King Kristie Lowery Thomas Meyerer Chris Peters Matthew Ort Stephanie Pfister Debera Salam Debbie Spyker EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US Ernst & Young LLP. All Rights Reserved. SCORE No. YY3190 CSG No ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. EY does not bear any responsibility whatsoever for the content, accuracy or security of any websites that are linked (by way of hyperlink or otherwise) to external websites. ey.com Mary Gorman mary.gorman@ey.com Mike S. Willett mike.willett@ey.com Unemployment claims management, employment tax transformation services, mobile workforce compliance, risk and controversy these are just a few of the US employment tax services we provide to businesses across the globe. Click here for more information. Connect with us Visit us on LinkedIn Follow us on Twitter Read our blog at Payroll Perspectives from EY