The Payroll Report: Feb. 20 to Feb. 23


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Here is a roundup of payroll issues recently covered:

Federal:

With three business days remaining in February, employers and payroll administrators may not have much longer to wait before the IRS releases the 2018 Form W-4, Employee's Withholding Allowance Certificate, and an updated online withholding calculator.

The form and the calculator are expected to provide insight into more accurate income tax withholding under the federal tax code overhaul, signed Dec. 22 (Pub. L. 115-97), which suspended personal exemptions from 2018 to 2025.

Guidance issued by the IRS in January said that the 2017 Form W-4 for claiming exemption from income tax withholding may be treated as effective through Feb. 28 (Notice 2018-14). Once the 2018 Form W-4 is released, employees have 30 days to refile.

In Notice 1036, the agency said that by the end of February it also would have its withholding calculator ready, along with information to help people determine whether to adjust withholding.

The payroll community also awaits Publication 15-B, Employer's Tax Guide to Fringe Benefits, which is to contain guidance on reimbursements and income exclusions affected by the new tax law. The guidance is expected to clarify how employers should handle reimbursements for qualified moving expenses, the taxability of some working condition fringe benefits, and the taxability of meals provided for an employer's convenience.

Applicable large employers, insurers, self-insuring employers, and other coverage providers are reminded that Forms 1095-B and 1095-C must be provided to individuals by the extended deadline of March 2, 2018. The original deadline was Jan. 31, 2018.

The Transportation Department released the Standard Industry Fare Level terminal charge amount and rates for the first half of 2018. The terminal charge portion of the SIFL formula increased to $41.71 for the first half of 2018, compared with $40.63 for the second half of 2017. The rate for the first 500 miles of travel increased to 22.82 cents a mile from 22.22 cents a mile. The rate for miles 501 to 1,500 rose to 17.40 cents a mile from 16.94 cents a mile. The rate for distances of more than 1,500 miles increased to 16.73 cents a mile from 16.29 cents a mile.

State:

Meanwhile, several state legislatures are figuring out how to deal with the effects of the tax law. Idaho, for example, updated its Internal Revenue Code conformity date to Dec. 21, 2017, excluding the changes made by the law. West Virginia updated its conformity date to Jan. 1, 2018, but removed the state’s dependence on the number of exemptions claimed on the federal W-4. An examination of how state legislatures are seeking to offset the tax code overhaul can be found here.

By Jazlyn Williams

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