The Payroll Report: July 23 to July 27


 

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Here is a roundup of payroll issues covered in the past week:

Federal

Employers face a significant burden related to the withholding calculations required by the draft 2019 Form W-4, two tax groups said in letters to the IRS.

The draft form is more complex and requires the employer to do more to calculate withholding amounts, the National Association of Enrolled Agents said in a July 6 letter. The requirements would particularly affect smaller businesses that would need to seek external help, the letter said.

The draft W-4 gives employers more responsibility for accurate withholding calculations, the American Institute of CPAs said in a July 12 letter. If an employee omits information from the form or does not use the IRS’s online calculator to determine their withholding, underpayment or overpayment of taxes could result, the institute said.

Employers need a revised Publication 15 (Circular E), Employer’s Tax Guide, to provide withholding guidance, the institute’s letter said. Without IRS guidance, employers would need to identify and interpret the changes in the tax code overhaul (Pub. L. 115-97) to determine withholding, the letter said.

State

New Jersey released revised withholding tables July 23. The new tables implement a withholding rate of 15.6 percent in a bill (A. 3088) signed July 1 by Gov. Phil Murphy (D).

New Jersey’s unemployment tax rates are to generally decrease for the period from July 1, 2018, to June 30, 2019, the state Department of Labor and Workforce Development said July 25.

Unemployment tax rates are determined with Table B for fiscal 2019, ranging from 0.4 percent to 3 percent for positive-rated employers and from 4.3 percent to 5.4 percent for negative-rated employers. For fiscal 2018, tax rates for experienced employers were determined with Table C and ranged from 0.5 percent to 5.8 percent.

The tax rate for new employers in fiscal 2019 is 2.8 percent, unchanged from fiscal 2018.

Wyoming’s unemployment-taxable wage base is to increase to $25,400 from $24,700 in 2019, a spokesman for the state Department of Workforce Services told Bloomberg Tax July 23.

Local

New Jersey is to allow the imposition of local payroll taxes under a bill (A. 4156) signed July 24 by Gov. Phil Murphy (D).

The bill provides that municipalities may impose a tax of up to 1 percent of employers’ payrolls. However, under state law, only municipalities with a population of at least 200,000 may impose taxes. Newark already administers a payroll tax.

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