The Payroll Report: Dec. 18 to Dec. 29


PayClocker

Here is a roundup of payroll issues recently covered:

Federal
Last week, on Dec. 22, tax legislation that overhauls the U.S. tax code for the first time in more than 30 years was signed into law by President Donald Trump. The measure (Pub. L. No. 115-97) contains several payroll-related provisions, including the following:
•    Seven individual tax brackets were set at 10, 12, 22, 24, 32, 35, and 37 percent, effective Jan. 1, 2018, and expiring Dec. 31, 2025.
•    The withholding rate was reduced to 37 percent from 39.6 percent for those receiving $1 million or more in supplemental wage payments in 2018.
•    The optional flat withholding tax rate increased to 28 percent from 25 percent for those receiving up to $1 million in supplemental wage payments in 2018.
•    Personal exemptions were suspended from 2018 until the end of 2025.
Under upcoming guidance from the IRS, the 2017 Forms W-4 that employees already have filed may be used by employers in conjunction with the law’s provisions.
Until guidance on the 2018 percentage method income tax withholding brackets is released, “employers and payroll service providers should continue to use the existing 2017 withholding tables and systems,” the IRS said. Those implementing changes based on new guidance would be encouraged to do so by February, it said.
The IRS said Dec. 22  in a news release that an extension to provide Forms 1095-B,  Health  Coverage, and 1095-C, Employer-Provided  Health  Insurance Offer and Coverage, to individuals was given applicable large employers, insurers, self-insuring employers, and other coverage providers. The new deadline is March 2, 2018, 30 days longer than the original due date of Jan. 31.

State
Colorado and Oregon  may make changes to withholding methods to accommodate provisions of the federal tax law that take effect Jan. 1, 2018.  
Washington’s Department of Labor and Industries adopted final rules on the enforcement of paid sick-leave requirements. The rules, which take effect Jan. 1, explain how the department would respond to employer violations of the paid  sick - leave  law, failure to pay employees the tips and service charges that they are owed, or retaliation against employees.
Michigan released its standard unemployment-taxable wage base, modified wage base for delinquent employers, and unemployment tax rates for 2018. Arizona, Hawaii, and Montana released unemployment tax rates for 2018.

Local
The Charleston, W.Va., city service fee is to increase to $3 a week from $2.50 a week, effective Jan. 1, 2018. Employers are to deduct the fee each week from the pay of full-time and part-time employees who regularly report for work at a location in Charleston.
By Jazlyn Williams

Take a free trial of Bloomberg BNA’s Payroll Decision Support Network, your one-stop resource for reliable, up-to-date guidance and analysis in every area of payroll administration and compliance.
Follow Bloomberg BNA on Twitter @BloombergBNA and join the Bloomberg BNA U.S. and Global Payroll group on LinkedIn.