Transcript UNC FIT Powerpoint Template - University of North Carolina

Kim Evans
November 29, 2011
1
Highlights from American
Payroll Association’s
Preparing for Year End and
2012
2


Cash Allowances are still taxable
The new guidance on employer-provided
cell phones and reimbursements for
personal cell phones required to be used
for business does not affect the taxability of
cash allowances provided to employees for
purposes of purchasing and using a cell
phone for business
3

A cash allowance for which substantiation
under an accountable plan is not required is
taxable income to the employee at the time
it is paid
4



Beginning January 1, 2012 premiums will be
deducted and remitted for the current
month
No Liberty Disability deductions should be
withheld on December 2011 payroll
New rate effective January 1, 2012
5

All employees will be under one plan

Payments will be made directly to vendor

Most campuses are transitioning to
electronic payment to vendor
6


Leave balances must be rolled prior to the
January 2012 payroll
WebFocus reports are in development to
assist the Shared Services campuses
7



NC Flex enrollments must be loaded prior
to the January 2012 payroll
Scripts are in development to load for
Shared Services campuses
Elluminate Session scheduled for Dec 6th to
Demo the process
8

Employees who claimed exempt status in
2011 and wish to continue their exemption
for 2012 must submit a new Form W-4 by
February 16, 2012
9


If an employee whose exemption expires on
February 16 does not file a new form,
withhold based on the most recent valid
Form W-4 in the employee’s file, if you have
one
If not, withhold as if the employee were
single claiming no withholding allowances
until he/she submits a new Form W-4
10



Enter taxable fringe benefits as they occur
Qualified Moving Expense Reimbursements
are treated as a fringe benefit excludable
from employees gross income, but
reportable in Box 12 with Code P
Non-Qualified Moving Expenses are
considered taxable income subject to full
taxation and withholding
11



Personal use of a company vehicle is
taxable compensation
Educational Assistance – specific rules on
Job-Related and Non-Job Related
Other taxable fringe benefits i.e. season
tickets
12


Overpayments should be collected in the
same year if possible. Overpayments repaid
in the same year should be collected as net
and adjustment made to employee record
to reduce wages and applicable taxes
withheld
Repayments related to prior years require
special tax treatment by the employee and
must be repaid at Gross.
13



401(k) and 403(b) employee contribution
limits increase to $17,000 from $16,500
457(b) employee contribution limits
increase to $17,000 from $16,500
Catch up contributions for employees age
50 and over is unchanged at $5,500
14



Social Security Wage Base increases to
$110,100 in 2012
The maximum social security tax employee
and employers will each pay is $6,826.20
SSA is no longer mailing out annual
earnings statement to workers. “Retirement
Estimator” is available on SSA website
15


In March 2011, the IRS issued interim
guidance on Form W-2 reporting of the cost
of employer-provided group health plan
coverage
This new reporting requirement is for
information purposes only, to inform
employees of the cost of their health
insurance
16


It does not cause excludable employerprovided health coverage to become
taxable
The interim guidance applies to 2012 W2s –
that are furnished to employees January
2013
17

Salary reductions by an employee into a
health FSA are limited to $2,500, effective
for tax years beginning after December 31,
2012
18


Effective May 16, 2011, the USCIS finalized
the rule without change to an interim rule
issued in December 2008 that took effect
early 2009
Under the interim and final rule, employers
may not accept expired documents to verify
employment authorization in connection
with the Form I-9 process
19


Correct names and social security numbers
on W2 wage reports are key to the
successful processing of an employers
annual wage report submission
SSA provides two internet options that allow
employers to verify their employees names
and social security numbers against SSA’s
records
20

June 26, 2011, SSA began a new method of
assigning social security numbers called
“randomization” that will keep SSA from
running out of SSNs in certain states and
help protect against identity theft
21



Some changes are:
SSA is no longer issuing SSNs based on
geography (state and local area)
SSA is issuing SSNs beginning with the
number “8” which has never been done
before
22


SSA is using all possible SSNs with the
number “7” in position 1, rather than
reserving for certain states and specific
groups i.e. nonresident aliens receiving
SSNs through SSAs Enumeration at Entry
program
The High Group
23





Even with randomization, the SSA will not
issue:
SSNs beginning with the number “9”
SSNs with the number “666” or “000” in
position 1-3
SSNs with the number “00” in position 4-5
SSN’s with the number “0000” in position
6-9
24


SSAs free AccuWage and AccuW2C software
can be downloaded from SSAs website
This free software allows employers to
validate and revalidate the W2 data until it
is error-free on the employers system
before sending file to SSA
25


AccuWage ensures that the data meets the
required format with regard to record
sequence, mandatory fields – it does not
verify name and social security numbers
The latest version should be downloaded
each year, and new versions are “backward
compatible” to check any tax year
26

IRS regulations require “Undelivered
statements for employees” shall be retained
by the employer for 4 years
27