Employers to Experience Many State Changes To Significant Payroll Amounts, Dates in 2017

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By Howard Perlman, Christine Pulfrey and Caitlin Reilly

Employers may augment payroll compliance for 2017 by enhancing their understanding of major changes to states' payroll-related dollar amounts, rates and deadlines that are to take effect next year.

Updates to key federal payroll figures for 2017 are available in this issue of PAG Newsletter on Page 208 .

New State Annual Reconciliation Dates

In 2017, some states are to mandate earlier deadlines for employers to file annual returns and state copies of Form W-2, Wage and Tax Statement, than were applicable in 2016.

The Consolidated Appropriations Act (Pub. L. 114-113) signed in December 2015 shifted the deadline for filing Form W-2 with the federal government to Jan. 31, starting with tax year 2016 forms filed in 2017, replacing later deadlines. Since then, 14 states established earlier deadlines for filing annual returns and state copies of Form W-2.

Starting with tax year 2016 forms filed in 2017, 26 states, the District of Columbia and Puerto Rico have an annual reconciliation date of Jan. 31. The states are Alabama, Colorado, Connecticut, Delaware, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Mississippi, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Utah, Vermont, Virginia and Wisconsin.

The annual reconciliation date for Nebraska is Feb. 1 and for 11 other states is Feb. 28. The states are Arizona, Arkansas, Hawaii, Kansas, Maine, Michigan, Missouri, Montana, New Jersey, Oklahoma and West Virginia.

In 2017, unlike in 2016, annual filing of state Forms W-2 is to be in effect for employers in Iowa and Oklahoma.

Most states have released 2017 income tax withholding tables or confirmed that current tables are to remain in effect. Of the tables released, significant changes were reflected in Maine and North Carolina’s tables. The Maine withholding tables include a new taxable income rate bracket of 10.15 percent, applicable to annual income that exceeds $200,000. North Carolina's flat withholding rate decreased to 5.599 percent from 5.85 percent.

Minimum Wage Increases

Hourly minimum wage rates are to increase in 17 states Jan. 1, 2017. The states are Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Hawaii, Massachusetts, Michigan, Missouri, Montana, New Jersey, Ohio, South Dakota, Vermont and Washington. New York's minimum wage is to increase Dec. 31, 2016, and Maine's minimum wage is to increase Jan. 7.

Maryland, Oregon and the District of Columbia are to increase hourly minimum wages July 1. Nevada typically announces in early April any wage increase that is to take effect July 1.

The three states in 2017 that are to base hourly minimum-wage changes on the employer’s size or location are New York, California and Oregon.

New York, starting Dec. 31, 2016, is to have four hourly minimum wages differentiated by employer size and location. Effective Dec. 31, 2016, New York City employers with at least 11 employees are to pay $11 and those with fewer than 11 employees are to pay $10.50. Employers in Nassau, Suffolk and Westchester counties are to pay $10 and employers in the rest of the state are to pay $9.70. Also, employers of fast-food workers in New York City are to pay $12 and employers of fast-food workers in the rest of the state are to pay $10.75.

California, starting Jan. 1, is to have a minimum wage for employers with at least 26 employees and one for employers with fewer than 26 employees. Effective Jan. 1, employers with at least 26 employees are to pay $10.50 and those with fewer than 26 employees are to pay $10.

Oregon implemented regional minimum wages July 1, 2016. Effective July 1, 2017, Oregon’s standard hourly minimum wage is $10.25, its Portland Metro minimum wage is $11.25 and its minimum wage for nonurban counties is $10. The hourly minimum wage applicable for Oregon employees is based on where they perform work.

UI, TDI Wage Base Changes

In addition to unemployment wage bases for 2017 previously listed Nov. 16 on page 184 of the PAG Newsletter, wage bases for six states are to rise in 2017: Alaska, $39,800; Hawaii, $44,000; Idaho, $37,800; North Carolina, $23,100; Oregon, $38,400 and Utah, $33,100. North Dakota's wage base is to decrease to $35,100.

Tennessee is the only state with a wage base unconfirmed for 2017. If the balance of the state's unemployment trust fund Dec. 31, 2016, is more than $1 billion, then because the balance June 30, 2016, also was more than $1 billion, Tennessee's wage base for 2017 would decrease to $7,000, down from $8,000 for 2016.

Tennessee's unemployment trust fund balance as of Dec. 16 was slightly more than $1 billion. If the balance Dec. 31 does not exceed $1 billion, Tennessee's wage base for 2017 would be $8,000.

For 2017, the wage base for temporary disability insurance is to increase for four states: California, $110,902; Hawaii, $1,023.31, which is a weekly wage base instead of an annual one; New Jersey, $33,500 and Rhode Island, $68,100.

To contact the editor responsible for this story: Michael Trimarchi at mtrimarchi@bna.com.

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

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