The Payroll Report: June 11 to June 15


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

Federal

The draft 2019 Form W-4, Employee’s Withholding Allowance Certificate, released June 6 by the IRS, may require employers to include at least four new input fields in their withholding systems, increasing complexity, payroll professionals told Bloomberg Tax.

The new data required by the form would involve additional employer calculations based on the amounts given by employees when determining federal income tax withholding.

The need for more data appears to “make the withholding calculation process much more difficult for employers and their systems,” Brent Gow, CPP, managing partner of BRGow & Associates LLC, told Bloomberg Tax. Adoption of the form by employees also may be an issue because of the form’s complexity, he said June 8.

The lack of clarity in the use of the form’s new fields could result in employees reporting amounts for jobs other than their highest-paying job, which is not the form’s intention, or simply leaving the fields blank, said Mary Hevener, a partner with the law firm Morgan, Lewis & Bockius LLP.

State

Idaho released a worksheet June 12 for employees to determine the number of state allowances to claim on their federal Form W-4, Employee’s Withholding Allowance Certificate. The number of state allowances is based on a new state child tax credit that may be claimed for children age 16 or under on Dec. 31, 2018.

The worksheet also allows employees to determine state allowances to claim based on their federal itemized deductions or determine if additional withholding is needed for multiple jobs.

The IRS extended the filing deadline for victims of Indiana severe storms and flooding that started Feb. 14, 2018.

Employers with operations in the affected counties have until June 29, 2018, to file employment tax returns due after Feb. 14 and before June 29, the IRS said. However, employers still must deposit employment taxes on time, the IRS said.

Local

A Seattle business tax on employee hours was repealed June 12 by the city council with support from Mayor Jenny Durkan (D), less than a month after the council unanimously passed the measure.

The ordinance, CB 119280, was to have established a head tax for businesses with annual income exceeding $20 million. Effective Jan. 1, 2019, employers were to pay a rate of $0.14323 an hour in tax on all full- and part-time and temporary employees, based on the number of hours of work completed quarterly in Seattle.

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