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Payroll

Severance pay: Is it FICA taxable or not?

10/26/2012
A federal appeals court has ruled that a bankrupt company’s severance payments qualified as FICA-free supplemental unemployment benefits—also known as SUB pay. Therefore, the court concluded, the company’s $1 million FICA refund claim was proper.

1099 this! And this! And this, too!

10/22/2012
The W-2 year-end process is burdensome enough. The last thing you need to worry about is back-up withholding from payments made to independent contractors and filing Form 1099-MISC. Here’s what you need to know for the 2012 filing season.

FICA wage base increases to $113,700 for 2013

10/16/2012
The Social Security Administration has announced that the 2013 taxable wage base for the Social Security portion of FICA increases to $113,700. That’s a 3.2% hike over the 2012 wage base of $110,100.

State chart: withholding on supplemental pay

10/08/2012
STATE WITHHOLDING RATES: Here’s a chart summarizing how states handle income tax withholding on supplemental wages. Note: To get the full story on state tax rates, visit your state tax department’s website.

Timekeeping records: Know the rules for exempt & nonexempt staff

10/08/2012
Employers with casual timekeeping systems are much more likely to face lawsuits over unpaid wages than organizations with strict record-keeping rules. Some simple procedural guidance can help keep you out of court. Here’s how the record-keeping requirements for exempt employees differ from those for nonexempt workers.

IRS nixes reimbursement plans as wage recharacterizations

10/07/2012
It would be great if you could wave a magic wand and convert some of employees’ taxable wages into nontaxable business reimbursements. But you can’t. A new revenue ruling reiterates that employees’ expenses must have a business connection before you can reimburse them tax-free.

Are cash bonuses to employees and survivors taxable? Reportable?

10/04/2012

Question: We are a public employer. Since employees haven’t had pay raises in more than four years, we will soon be making cash distributions to them. Employees’ survivors will get separate distributions. Are these distributions taxable and how do we report payments made to survivors?

Employee loans: Are they reportable or not?

10/04/2012

Question: Our company makes interest-free loans to employees so they can buy home computers. The purpose of the loan program is to allow employees to hone their computer skills. Employees can take up to four years to repay their loans. Must we report the loans on their W-2 forms?

Reporting agents: IRS offers new guidance on your responsibilities, rights

10/03/2012
Payroll reporting agents are service bureaus and other businesses that can handle all of your payroll duties, including depositing taxes and filing forms. New guidance from the IRS is designed to help you keep tabs on your reporting agent.

Special analysis: Lifestyle benefits = payroll taxes

09/28/2012
Corporate HR departments love nontraditional benefits—perks other than leave, health insurance and retirement benefits—because they’re generally cheap and build loads of employee good will. But many so-called lifestyle benefits are taxable, much to HR’s chagrin.