The Payroll Report: March 12-16


PayClocker

Here is a roundup of recently covered payroll issues:

Bloomberg Tax writers and editors reported on a variety of topics at the American Payroll Association’s annual Capital Summit, which was held March 12 and 13 in Washington:

  • The IRS is to update Form W-4 and its instructions in August or September to conform to the 2017 tax code overhaul (Pub. L. 115-97), said Ken Corbin, agency director of return integrity and compliance services. More changes are to come to Form W-4, Publications 15-A and 15-B, and the agency’s online withholding calculator for the 2019 filing season, he said.
  • The agency is addressing changes to other forms needed because of the tax code overhaul, said National Taxpayer Advocate Nina Olson. Additionally, the IRS continues to combat identity theft and refund fraud, she said, but many returns are flagged as false positives in filters set up to catch such issues.
  • Changes to the new Form W-4 were made to simplify the process of reporting new-hire dates, said Sherri Grigsby, manager of the employer services team for the federal Office of Child Support Enforcement. Additionally, the official Income Withholding for Support form was updated, she said.
  • The Labor Department is launching a program to allow employers to self-audit and self-report payroll violations, said Bryan Jarrett, deputy administrator of the department’s Wage and Hour Division. If the employer catches violations on its own and catalogs the employees who were affected and the possible costs, it would contact the division to discuss the case and work toward a settlement, he said.
  • States have a variety of issues to consider with the tax code overhaul, including how to conform to the federal Internal Revenue Code, limits on the deduction for state and local taxes, and whether to adopt the federal Form W-4, said Peter Isberg, president of the National Payroll Reporting Consortium. States are likely to make changes this year and in 2019 and 2020 because of the time needed to analyze and carry out modifications, he said.
  • Other state policy initiatives include requirements for paid family leave or sick leave and predictive scheduling laws, which govern how much notice employers must give employees regarding work schedules, said Laura Lough, director of publications at the American Payroll Association.
  • Upgrades to the Automated Clearing House’s same-day processing system allow employers to more easily correct payment mistakes, said Michael Herd, senior vice president of the National Automated Clearing House Association. Financial institutions must make funds transferred through same-day ACH credit or ACH debit available to recipients by 5 p.m. local time starting March 16, he said.
  • Congress may address the treatment of gig economy workers and the taxation of mobile workers before it adjourns in October, but it is unlikely they will pass legislation, said Timothy Lynch, a senior director at Morgan Lewis Bockius LLP in Washington.

State

New York released its 2018 unemployment tax rates. The taxable wage base is $11,100. New York also said it was extending to March 20 deadlines for filing and payment of most state taxes that fell between March 15 and 19. The extension applies to Dutchess, Putnam, Rockland, Sullivan, and Westchester counties, which were affected by recent snowstorms. Some exceptions were made, including for remittance of withheld income tax.

South Carolina said employers are to use a new portal for unemployment taxes starting March 26. The new portal, State Unemployment Insurance Tax System (SUITS), would replace the South Carolina Automated Tax System, which is to no longer be available for unemployment tax and wage report filing starting March 18.

Oregon released the forms for its new transit payroll tax, to be effective July 1.

By Jamie Rathjen

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