South Carolina employers, please remember that the State Unemployment taxable wage base will increase from $7000.00 to $10,000.00. This begins January 1, 2011. Increases will also take effect in 2012 to $12,000.00 and in 2013 to $14,000.00.
There are other states that will see state wage base increases, such as IN, IA, KY, MS, MT, ND, NH, OK, NJ, NM, SD, WA, WY and WI thus far. As legislation becomes finalized and available, we will continue to share this information with you. You will also receive an independent email alert, notifying you of the exact changes for each state. If you have questions or concerns about any pending increases affecting your tax liabilities in other states, please contact our Support Department by emailing us at support@aappayroll.com or by calling us at 843-851-2289.
Be assured that AAP is prepared for these changes and that your payroll taxes will continue to be calculated, paid, and monitored accurately. AAP always proudly provides guaranteed tax reporting for all of our clients.
Some states will be seeing a reduction in their Federal Unemployment Tax Act (FUTA) credit for 2011 due to balances to the Federal Unemployment Account (FUA). Outstanding balances from one year, not repaid by the end of the following calendar year lose a portion of their FUTA credit. The additional FUTA taxes are then applied to the unsettled debts.
Three confirmed states to see the rate change are South Carolina, Michigan and Indiana, largely due to higher unemployment numbers. South Carolina and Indiana employers will now owe 1.1%, up from .8%. Michigan moves from 1.1% to 1.4%.
The FUTA make up tax will be due on or before January 31, 2011 to avoid penalties and/or fees. The amount due will be calculated after final 2010 payrolls are processed and your 940 is generated. In preparation for this additional expense, AAP is happy to calculate an estimated amount due based on your current payroll totals.
Elimination of Advance EITC—Beginning January 1, 2011 recipients will not be able to claim Advance Earned Income Tax Credit. The EITC was eliminated in order to use fund such assistance programs that hire school teachers and support Medicaid.
Small Business Health Care Tax Credit—The Government released a final set of guidelines and forms for small business owners eligible to health care tax credit for the 2010 year. Form 8941 and Form 990-T are now available, with instructions, to help you correctly apply and claim credits.
Mileage Reimbursement Increase—Beginning January 1, 2011 the standard mileage rates for the use of a car (Pickups, van or panel truck) will move to .51 per mile for business, .19 per mile for medical or moving purposes, and .17 per mile driven in service or charitable organizations.
More information on these articles can be found at the IRS website or by calling AAP!
A Year End Advisory should have been received through a recent payroll; however we would like to extend a few more reminders to ensure a smooth close out of 2010! Please call your Customer Service Representative with any questions or changes you may have regarding these items.
November
Rosanna Bustamante
The federal reserve will be closed on the upcoming holidays. While individual banks may be open, most transactions will not be completed until the next Federal Reserve Banking day. Please make arrangements with your processor if your pay date falls on one of these days.
December 24th, 2010
Christmas Day (Federal Day of Observance and AAP Holiday)
December 31, 2010
New Years Eve
AAP will be closed December 24th for Christmas and on December 31st for New Years Eve. Please be sure to contact your Customer Service Representative with any questions or necessary changes to your payroll process.
We are sad to have to bid farewell to Tracy Fish from our Support Department. Thank you for 12 years of dedication and commitment to the growth and operation of AAP. We wish you well in your new career path!
We would also like to take time to welcome Traci Cutler back to the AAP Support Department. Traci rejoined us on October 25.
The federal reserve will be closed on the upcoming holidays. While individual banks may be open, most transactions will not be completed until the next Federal Reserve Banking day. Please make arrangements with your processor if your pay date falls on one of these days.
November 25th, 2010 Thanksgiving day
The IRS has announced that the requirement to report the value of the health insurance coverage they provide employees on each employee’s annual Form W-2 will not be mandatory for 2011. With the changes that employers will need to make to systems and procedures, the IRS and Treasury Department determined that the relief is necessary to provide the time to make the compliance changes. This reporting is for informational purposes only, to show employees the value of their healthcare benefits so they can be more informed consumers. The amount reported does not affect tax liability, as the value of the employer contribution to health coverage continues to be excludible from an employee’s income and it is not taxable.
More information on this law can be found at the IRS website under Affordable Care Act.
Emails are circulating that tax payments have been rejected and asking unsuspecting employers to follow a link to correct the incident. These are not from the IRS and are phishing emails that direct employers and employees alike to a website that can infect your computer with malware. Do not reply to the email. Do not open any attachments or click on any links. The IRS will not request personal information through email. Suspicious emails can be forwarded to phishing@irs.gov.
If you are utilizing electronic filing of taxes with AAP, and have any questions as to whether or not your tax payment was made properly and without a return, please call or email the support department and a report can be run showing the tax payments for any given time frame.
More information can be found at the IRS website under E-mails scams.
Keeping in line with our ability to tailor a payroll service to fit each client’s needs, we understand the importance of having reports that work for your business. We also understand that, while we currently offer a wide variety of comprehensive reports, you may find yourself needing something more customized. Many of our clients have had custom reports built by AAP over the years, but there is another solution for the tech savvy clients who often need to tweak and build basic reports on the fly.
Such clients could benefit by having our Adhoc Reporting feature activated at no extra charge. With minimal instruction, you can develop and build your own personal report database. As always, our AAP Support Department is happy to continue to generate reports internally for our clients* or to assist you as you learn to use the Adhoc piece.
You are not trapped in an “as is” reporting service with AAP! Contact a Support Representative for more information on how this free and easy service can help your business and save you time and money!
*Some AAP custom reports do require a fee based on complexity or length of labor.
Many business are starting to recover and move forward, but many are still unable to hire new employees and process payroll. Did you know that quarterly federal returns are still required to be submitted even if a business did not pay any payroll for a quarter. States require the quarterly reports and even some require monthly zero payment notifications. Please notify us of any changes in your processing timelines so that we can ensure that your reports are made timely.
There are many changes from the federal and state governments in regards to electronic filing. These change include but are not limited to reduction in threshold limits for requirements of electronic filing, mandatory electronic filing requirements, and the discontinued acceptance of tax payments by banks. If you currently do not utilize electronic filing with AAP and would like to discuss your options, please contact your processor for more information.
SC Unemployment Legislative Changes— In the Spring of 2010, new legislation was made regarding the taxable wage base. Beginning January 1, 2011 the taxable wage base will be $10,000.00, up from the current $7000.00. Increases will also take effect in 2012 to $12,000.00 and in 2013 to $14,000.00.
IRS EFT Requirement – The IRS will no longer be accepting the coupon 8109 for payment of federal taxes as of December 31, 2010. Some banks have already stopped accepting the federal taxes payments this year. Electronic filling will be mandated for all payments after December 31, 2010.
Illinois EFT change -Illinois currently requires employers with an annual withholding liability of $200,000 or more to pay their taxes electronically. As of January 1, 2011 this threshold will be lowered to $12,000 or more.
Maine EFT Requirements— Maine currently requires employers with a combined tax liability of $25,000 or more, for all tax types during the current look back period, to pay their taxes electronically. As of January 1, 2011 this threshold will be lowered to $18,000 or more and will continue to decrease each year.
Oregon Minimum Wage Increase— As of January 1, 2011 the new minimum wage for the state of Oregon will be increased to $8.50 an hour. The current minimum wage for this state is $8.40 an hour.
Ashley Bond
Ashley Bond
Congratulations to Donna Bond and the entire Bond family on the birth of her son Ian Bond. He was born September 28th.
The federal reserve will be closed on the upcoming holidays. While individual banks maybe open, most transactions will not be completed until the next Federal Reserve Banking day. Please make arrangements with your processor if your pay date falls on one of these days
October 11th, 2010 Columbus day
November 25th, 2010 Thanksgiving day
December 25th, 2010 Christmas day
January 1st, 2011 New years day
Every two months Sommer Judy and Tracy Fish attend continuing education seminars through the South Carolina American Payroll Association. These seminars keep them current on the changing laws in the state and federal governments as well as providing them with credits toward their certifications. The information learned at these seminars is shared with everyone in the office to make sure we are providing our clients with the most up to date information.
Tracy has also taken this information to the community by talking with a business class in August this year at Miller-Motte Technical College located in North Charleston, SC. She explained some of the key points of payroll to students that are learning to open their own business someday.
This November Tracy and Wendy Brock will be attending the Carolinas Payroll Conference in Myrtle Beach, SC. This conference is for payroll professionals across South Carolina, North Carolina, and provides continuing education for Certified Payroll Professionals.
The end of the year is fast approaching, as is the time for W-2s, 1099s, and end of the year quarterlies. Take time to verify the accuracy of each employee’s legal name, social security number, and address. AAP will make any necessary employee corrections free of charge through December 30th; however, later changes are subject to reprinting and/or corrections fees. AAP cannot assume liability for IRS penalties for incorrect W-2s, which are currently $50 per incorrect W-2.
Also, any third party sick pay, bonuses, extra pay for insurance and auto allowance, that will need to be included in 2010, need to be submitted in writing by December 15th to ensure timely processing.
Please look for additional Year End Notices in upcoming payroll packets.
Starting in tax year 2011, the Affordable Care Act requires employers to report the value of the health insurance coverage they provide employees on each employee’s annual Form W-2. This reporting is for informational purposes only, to show employees the value of their health care benefits so they can be more informed consumers. The amount reported does not affect tax liability, as the value of the employer contribution to health coverage continues to be excludible from an employee’s income and it is not taxable.
More information on this law can be found at the IRS website under Affordable Care Act.
This new credit helps small businesses and small tax-exempt organizations afford the cost of covering their employees and is specifically targeted for those with low- and moderate-income workers. The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees. Learn more by browsing the IRS page on the Small Business Health Care Tax Credit for Small Employers.
Effective Jan. 1, 2011, the cost of an over-the-counter medicine or drug cannot be reimbursed from Flexible Spending Arrangements or health reimbursement arrangements unless a prescription is obtained. The change does not affect insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles. The new standard applies only to purchases made on or after Jan. 1, 2011, so claims for medicines or drugs purchased without a prescription in 2010 can still be reimbursed in 2011, if allowed by the employer’s plan. A similar rule goes into effect on Jan. 1, 2011 for Health Savings Accounts (HSAs), and Archer Medical Savings Accounts (Archer MSAs). Employers and employees should take these changes into account as they make health benefit decisions for 2011.
SC Department of Revenue has released the Legislative Update for 2010 on the Department of Revenue website on September 20th. This update provides a list of changes in permanent and temporary laws and regulations enacted during the SC 2010 Legislative session. One of the updates discussed is that SC income tax law has been amended to conform to the IRS code. Read more on these updates at www.sctax.org.
Sommer Judy
Nydia Shelton
American Automated Payroll is proud to announce the opening of our Nashville, Tennessee office. We would like to welcome seasoned payroll professional, Matt Haverstick to our team. Matt began with us on September 1st and is our first Business Development Manager for the Nashville area.
This year has allowed us two expansion opportunities to Columbia and Nashville. Our corporate office and operations will remain in Summerville, SC. It is always rewarding to expand our presence and to be able to better serve our clients. Thank you to all of our loyal clients who have helped us achieve this success!!
It is hard to believe that Christmas is just over 3 months away. We are also coming up to another quarter end and before you know it 2010 will be closing and 2011 will come with lots of new laws and payroll changes.
Help AAP to ensure a smooth quarter end by alerting us of any COBRA Credits taken July 1 to September 30, W-11’s for those new employees who qualify for the HIRE Act credit, and any miscellaneous change that may need to be made before the end of quarter.
The government agencies will also begin sending out original quarter returns to employers this month. By forwarding this information to AAP when you receive them, you can prevent future and unnecessary notices and/or penalties from those agencies!
President Obama signed into law the federal Education Jobs Act on August 10, 2010. A section of this law states that the advance payment of the Earned Income Credit will no longer be advanced with payroll by employers starting January 1, 2011. Employees can still take the credit on their personal income tax returns for 2011. This will affect many employees paychecks as the credit for federal taxes will no longer be given in advance. The IRS has not posted official guidance on this change yet, so we will watch this closely and give updates on this change as they are announced.
AAP is excited to announce that we are now supporting our own time and attendance program with packages that can easily fit any company’s budget! From basic time punching to advance systems capabilities that include scheduling, benefits tracking features and custom reporting, we can tailor a system to work for you! Pricing for AAP EZ Time starts at just $25 per month and AAP Time + at just $45 per month. Rates and fees based on package selection, hardware needs and company size. Call your sales representative or the AAP Support Department for a free demo!!
Mandatory Tax Payment Policy in effect 12/31/10
The IRS has announced that the federal deposit coupon program will be discontinued as of 12/31/10 and will be mandating Electronic Filing for all tax payments. If you currently do not have AAP send your tax payments electronically and would like to be ahead of this change, feel free to call your Customer Service Representative to inquire how to participate in this service today.
HIRE ACT
The IRS has stated that there was an issue with the first quarter of 2010 and applying the tax credits for the New Hire act properly. First quarter credits were taken on second quarter returns under line 12e of the 941. Notices have been sent to employers and the IRS is working to correct this issue. If you receive any kind of notice from the federal or state governments, fax or email them as soon as possible to the support department at support@aappayroll.com.
Hiring Incentives to Restore Employment (HIRE) Act
Enacted into law on March 18, 2010 and effective as of March 19, 2010 this new law is a two part tax benefit to employers who hire unemployed workers this year after February 3, 2010 and before January 1, 2011. The new law gives opportunity for employers to qualify for a 6.2-percent payroll tax incentive by exempting them from their share of Social Security taxes on wages paid to these qualifying workers. Read More
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Summerville, SC 29483
sales@aappayroll.com
Columbia Payroll Office
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North Carolina Payroll Office
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Raleigh, NC 27615
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