Compliance Corner

The information contained herein is not a substitute for tax or legal advice. We do not provide tax or legal advice and all clients are advised to consult with their tax or legal advisers. Your reliance upon information obtained by you or through these posts is solely at your own risk. PlanSource makes no warranties or representations regarding the information herein.

Resources

Society for Human Resource Management (SHRM)

SHRM is the world’s largest HR professional society, with 300,000 members in 165+ countries. SHRM is the leading provider of resources serving the needs of HR professionals and advancing the practice of HR management.

American Payroll Association (APA)

The American Payroll Association is the nation’s leader in payroll education, publications, and training. Each year, the APA publishes the Payroll Source, which contains all payroll regulations and changes for the current year. You can purchase the Payroll Source on the APA’s website, and also access the following resources for free:

Below are some Frequently Asked Questions in regards to updates and/or changes to current tax items

 

 Q: My corporate/headquarters office has moved – what needs to be updated?

 A:  You will need to update your new address with the Federal, State (withholding and unemployment) and Local tax agencies.  PlanSource cannot perform address changes with the tax agencies as the Tax Power of Attorney only extends to filing and remittance of tax payments and returns.  Once you have notified the tax agencies, please notify the PlanSource HCM Service Team and provide proof the address has been updated with the Federal Agency at a minimum. Then, the address change will be processed in our systems and new POA’s will be created.

 

Q:  My Company has gone through a name change – what needs to be updated?

A:  You will need to update your new company name with the Federal, State (withholding and unemployment) and Local tax agencies.  PlanSource cannot perform name changes with the tax agencies as the Tax Power of Attorney only extends to filing and remittance of tax payments and returns.  Once you have notified the tax agencies, please notify the PlanSource HCM Service Team and provide proof the name change has been acknowledged by the Federal Agency at a minimum. The, the name change will be processed in our systems and new POA’s will be created.  Please note this would apply for a legal name change or DBA name change.

 

Q:  My Company has had a change in named officers – what needs to be updated?

A:  You will need to update the officers of the company with the Federal, State (withholding and unemployment) and Local tax agencies. It is good practice to review these registered names with the agencies on a regular basis.  Once you have notified the tax agencies, please notify the HCM Service Team to determine if any current POA’s on file will need to be revised with the removal or addition of a new company officer.

 

Q:  My Company has had a corporation type change – what needs to be updated?

A:  You will need to update the corporation type change with the Federal, State (withholding and unemployment) and Local tax agencies.  PlanSource cannot perform corporation type changes with the tax agencies as the Tax Power of Attorney only extends to filing and remittance of tax payments and returns.  Once you have notified the tax agencies, please notify the PlanSource HCM Service Team to determine if any current POA’s on file need to be revised due to the corporation type change.  For example – your organization has become an LLC (Limited Liability Company).

 

Q:  My Company has opened a new office due to an employee working from home in a new state – what needs to be done?

A:  Every state and jurisdiction has different requirements.  You should review the states requirements on their websites.  The four main items are as follows:

  • Register the Company to do business in the state. This is typically done with the Secretary of State
  • Register for a withholding tax id
  • Register for an unemployment account
  • Register for a local tax id, if applicable

 

Q:  My Company has opened an office in a new state – what needs to be done?

A:  Every state and jurisdiction has different requirements.  You should review the states requirements on their websites.  The four main items they all will require are the following:

  • Register the Company to do business in the state. This is typically done with the Secretary of State
  • Register for a withholding tax id
  • Register for an unemployment account
  • Register for a local tax id, if applicable

 

Q:  My Company has opened a new component – what needs to be done?

A:  Every state and jurisdiction has different requirements.  You should review the states requirements on their websites.  The four main items they all will require are the following:

  • Register the Company to do business in the state. This is typically done with the Secretary of State
  • Register for a withholding tax id
  • Register for an unemployment account
  • Register for a local tax id, if applicable

 

Q:  My Company is closing a component – what needs to be done?

A:  Contact your HCM Account Manager and they will guide you in the process.

 

Q:  What is “Bulk Filing” for Taxes?

A:  This allows for one payment and upload to be made to the state by PlanSource.  By linking to the PlanSource Bulk Filer account with the states listed below this allows for efficiency in the tax remittance process.

 

  • State Unemployment tax: IN, MA, MN, NM, PA, DC, OH, OK, TX
  • Withholding tax: MA, MI, MS, AL, VT

 

Q:  My Company is closing an FEIN?

A:  You will need to notify the Federal, State (withholding and unemployment) and Local tax agencies.  There are different requirements for each tax agency.

  • Federal tax accounts need to be closed at the end of the year due to W-2 filings.
  • State tax accounts need to be closed at the end of the year due to W-2 filings.
  • State Unemployment tax accounts can be closed at the end of the quarter.

 

Q:  What to do for a client W-2 inquiry?

A:  You will need to reach out to your PlanSource HCM Client Service Representative. Provide them with the below details and both the HCM Service and Tax team will work together toward a resolution.

  • Employee name
  • Employee number
  • Component code or payroll group
  • Reason for your inquiry

 

Q:  What are the acronyms/codes used by the HCM teams for taxes?

A: See below list of frequently used acronyms and/or codes:

  • EIN – Employer Identification Number with the IRS
  • FIT – Federal Income Tax
  • FUTA – Federal Unemployment Tax
  • FICA – Federal Insurance Contributions Act.  This describes the combined taxes for Social Security and Medicare
  • Reciprocity – a relationship between states under which privileges granted by one are returned by the other.
  • SDI – State Disability Insurance
  • SIT – State Income Tax
    • Depending upon your state of employment this may also be known as below:
      • PIT (Personal Income Tax)
      • GIT (Gross Income Tax)
      • EIT (Earned Income Tax or Local Tax)
  • SUI/SUTA – State Unemployment Insurance

 

Q:  Do I submit all tax documents to PlanSource HCM Service Team?

A:  Below is a list of examples of specific tax documents you may receive:

  • All tax notices should be forwarded to the HCM Service Team via email.
  • Emails should contain the following in the Subject line:
    • Client Code both Master and Component
    • State or IRS
    • Type of document (notice, form, etc.)
  • When sending multiple tax notices please forward each notice in a separate email to ensure accurate and quick processing
  • Unemployment Claim forms are not processed by the PlanSource. These should be directed to your unemployment claims management department or representative.

 

Q:  When can I expect my quarterly tax package?

A:   Quarterly tax packages are sent 45 days following the end of each quarter.

 

Q:  What is a Tax Reconciliation Package and what should I review?

A:  This package will be sent within 45 days following the end of each quarter. The package contains what tax liabilities were recorded, paid, and filed by PlanSource.  This may also include any outstanding items for the prior quarter.  The outstanding items may include but are not limited to any adjustments processed after the quarterly tax filings or payments have been made.

 

Q:  What are the best reports to run to verify reported tax liabilities?

A:  It is recommended to generate the below Standard Reports from the PlanSource HCM portal.  If you are unable to locate these reports please contact your HCM Client Service Representative

  • Tax Liability Grand Total
  • Summary Payroll Register
  • Tax Reconciliation Posted Transactions

 

Q:  What is the timeline for tax returns, notices, adjustments, etc.?

A:

Taxes Tax Filing Tax returns are delivered via secure file transfer on the 25th of the month following quarter end. (Jan 25th; April 25th; July 25th; Sept 25th)
Taxes Tax Billing Reconciliation Tax billing reconciliations are delivered via e-mail within 45 days after end of quarter.
Taxes Tax Notices (IRS & State) The Tax Team will acknowledge receipt of any tax notices within 3 business days of receipt.

 

Final resolution of the tax notice may take up to 30 days depending on the response time of the respective agency.

Taxes Tax Accounts & Powers of Attorney All tax account information and Powers of Attorney (POA) will need to be returned to the tax team within 30 days of notification.

 

Beyond 30 days a fee of $125 per missing account number and/or POA will be assessed until this information is received by the team.

Taxes Amended Returns Any adjustments which require a return to be amended for prior quarters will be scoped and billed at our normal project rate and may take up to 90 days to complete depending on the types of adjustments needed.

 

Fees associated with Amended returns can be found here: https://na33.salesforce.com/sfc/p/700000008HTo/a/39000000ACeo/Vd6tnTCF4rtWT8uQE.MCPkZG_H7ysknbF1bEG.QCMMs

Should you have any additional questions, please email HCMservice@plansource.com and a HCM Client Service Representative will contact you.

Coming Soon

Compliance Updates

California

California Pay Data Reporting file update to ensure it meets the latest requirements. On or after March 4, you can begin to generate your data file in the UKG Pro solution and submit it directly to the agency.

Kentucky

Owenton, Kentucky (KY173) tax table update from 1% to 1.5%, effective January 1, 2022.

Minnesota

A tax update will be applied to correct 2022 taxable wages and tax amounts for the Minnesota state unemployment insurance (SUI) assessment funds Minnesota Special Assessment Employer (MNTADER) and Minnesota Federal Loan Interest Assessment (MNFLAER). First quarter amounts will be corrected in time for quarter-end filing.

Note: No action is required on your part.

Ohio

Local tax updates, effective January 1, 2022, including:

Tax agent ID change for Dresden Village, Muskingum County (OH1156) from Central Collection Agency (CCA) to null

New local tax codes with a rate of 2% for:

  • Etna-Reynoldsburg JEDD 1 (Licking County), Ohio (OH2223)
  • Etna-Reynoldsburg JEDD 2 (Licking County), Ohio (OH2224)
  • Etna-Reynoldsburg JEDD 4 (Licking County), Ohio (OH2230)

Local tax codes inactivated per statutory requirements for:

  • Reynoldsburg Enterprise Zone, Franklin County (OH2101)
  • Reynoldsburg Enterprise Zone, Licking County (OH2102)

Note: Employers may elect to have checks reversed and reissued to correct any withheld tax for 2022 payrolls, or the employee can reconcile when they file their taxes at the end of the year. Employees previously subject to the Reynoldsburg Enterprise Zone taxes are subject to the tax for the City of Reynoldsburg, Franklin County (OH1442).

New local tax code reciprocity tax credit limits:

  • Minerva, Stark County (OH1348), from 1.75% to 1.5%
  • Minerva, Carroll County (OH2156), from 1.75% to 1.5%
  • Minerva, Columbiana County (OH2157), from 1.75% to 1.5%
  • Powell City, Delaware County (OH1436), from 0.25% to 2%
  • West Lafayette, Coshocton County (OH1560), from null to 0.75%

Federal

The Employee Retention Tax deduction tax categories ERC “Qualified Wages for ERC” and ERCHB “ERC Paid Health Benefits” should no longer be used by any employers, effective December 31, 2021. If you’ve continued to use these categories past your organization’s eligibility date, please contact the HCM Service Team to request the checks be reversed and reissued.

Colorado

New optional Colorado Withholding Certificate (DR 0004) form available for generation on the Add/Change Withholding Form (W-4) page.

Delaware

Taxable wage base decrease from $16,500 to $14,500, effective January 1, 2022 for:

    • Delaware State Unemployment Insurance Employer (DESUIER) tax
    • Delaware Training Employer (DEETTER) tax

Tax rate increase for DEETTER from 0.095% to 0.11%, effective January 1, 2022.

Kentucky

Tax updates, effective January 1, 2022, for:

  • Florence City, Boone County (KY010 & KY162) taxable wage base increase from $142,800 to $147,000 and a Social Security cap increase from $2,856 to $2,940.
  • Wilder City, Campbell County (KY088) taxable wage base increase from $142,800 to $147,000 and a Social Security cap decrease from $3,570 to $3,307.50.

Ohio

Riverside City, Montgomery County (OH1450) local tax rate increase from 0.015% to 0.025%, effective January 1, 2022.

Pennsylvania

New Castle (Lawrence County) non-resident earned income tax (EIT) decrease to 1.815%, effective January 1, 2022. The resident EIT rate remains unchanged at 2.075%.

Washington

The state governor recently signed amended legislation to delay implementation of the Washington Cares Fund Tax (WACRFEE) until July 1, 2023.

Action may be required:  If you elected to have employees taxed, you can request for these checks to be voided and reissued removing the tax and placing into a refundable deduction or tax code. Please reach out to the HCM Service Team to begin the process should this be needed.

Wyoming

Taxable wage base increase from $27,300 to $27,700, effective January 1, 2022, for the:

  • Wyoming State Unemployment Insurance Employer (WYSUIER) tax
  • Wyoming Employment Support Fund (WYESFER) tax

Washington

The Washington Cares Fund Tax (WACRFEE) will be updated as of January 20, 2022, with a rate of 0.58%.

Action may be required: We have marked all WACRFEE tax codes as “Not Subject to tax”.  At this time the rate will not be applied automatically until the Legislature gives further direction. If you would like to begin withholding this tax please contact the HCM Service Team.

Earning Tax Category

New earnings tax category ADATU “Adoption Assistance Taxable Box 12 Update” added for federal income tax (FIT), Federal Unemployment Tax Act (FUTA), Medicare (MED), and Social Security taxes. Will report Box 12 – Code T of the Form W-2.

New earnings tax category SNTPA “3rd Party Non-Taxable No W2 Pennsylvania State Unemployment Insurance (PASUI) Exception” has been added.

For assistance configuring a new earning code please reach out to the HCM Service Team.

Indiana

Local tax rate increases for:

  • Cass County (IN053 and IN104) from 0.027% to 0.0295%
  • Madison County (IN025 and IN026) from 0.0175% to 0.0225%
  • Randolph County (IN084 and IN135) from 0.025% to 0.03%

North Carolina

The North Carolina state unemployment employer (NCSUIER) wage base limit increased from $26,000 to $28,000, effective January 1, 2022.

Ohio

Local tax updates:

Local school district rate increases from 1% to 1.75% for:

  • Preble-Shawnee SD, Preble County (OH1438)
  • Preble-Shawnee SD, Butler County (OH1953)
  • Preble-Shawnee SD, Montgomery County (OH1803)

New local school district tax codes for:

  • Pike Delta York SD, Fulton County (OH2229) with a rate of 1%
  • Sidney SD, Shelby County (OH2227) with a rate of 0.75%
  • Sidney SD, Logan County (OH2228) with a rate of 0.75%

New local tax codes for:

  • Lockington, Shelby County (OH2225) with a rate of 1%
  • Nashville, Holmes County (OH2226) with a rate of 1%

Local tax rate increases for:

  • Brimfield Tallmadge JEDD, Portage County (OH1822) from 1.5% to 1.75%
  • Hilliard, Franklin County (OH1245) from 2% to 2.5%
  • Powell, Delaware County (OH1436) from 0.75% to 2%

Rhode Island

Rhode Island Disability (RISDIEE) contribution rate and wage base updates.

  • The wage base limit increases from $74,000 to $81,500
  • The tax rate decreases from 1.3% to 1.1%
  • The cap amount decreases from $962.00 to $896.50

Virgin Islands

The Virgin Islands unemployment employer (VISUIER) taxable wage base limit decreased from $32,500 to $30,800, effective January 1, 2022.

Federal

11/05/2021

Form W-2 Box 14 updates to support new 2021 Families First Coronavirus Response Act (FFCRA) and American Rescue Plan Act (ARP) leave reporting requirements that allow employees to claim an income tax credit.

Note: No action is required if you used the provided FFCRA earning tax categories:

  • ESLPY – Emergency Sick Leave Pmt
  • EFMLP – Emergency Fam/Med Leave Pmt
  • ESLPY – for employees excluded from 3121(b)
  • EFMLP – for employees excluded from 3121(b)
  • GFMLP – Govt Emergency Fam/Med Leave Pmt
  • GSLPY  – Govt Emergency Sick Leave Pmt

Wages reported on a per day limit will be based on your earning setup, and the pay period dates for each payment will be used to report when the leave was taken.

12/10/2021

Taxpayers no longer eligible to claim the employee retention credit for wages paid after September 30, 2021, may have already reduced their employment tax deposits in anticipation of claiming this credit for the fourth quarter of 2021. If this is you, we recommend monitoring guidance issued by the IRS to learn if any action should be taken for these amounts.

Indiana

10/22/2021

Local tax rate increases, effective October 1, 2021, for:

  • Owen County (IN080 and IN131) from 1.60% to 2.50%.
  • Warrick County (IN160 and IN161) from 0.05% to 1.00%.

Maryland

12/10/2021

Local tax rate decreases, effective January 1, 2022, for:

  • St. Mary’s County (MD019) from 3.17% to 3.10%.
  • Washington County (MD022) from 3.2% to 3.00%.

New Jersey

12/10/2021

Local family leave and disability insurance tax rate decreases, effective January 1, 2022, for:

  • NJFLIEE from 0.28% to 0.14%.
  • NJSDIEE from 0.47% to 0.14%.

Ohio

11/05/2021

New local tax code, Etna-Reynoldsburg JEDD VII (Licking County) (OH2221), has been added with a rate of 2%, effective August 31, 2021.

Washington

12/10/2021

New state tax code, Washington Cares Fund Employee (WACRFEE), has been added with a rate of 0.58%, effective January 1, 2022.

Benefits from the fund will not be paid until January 1, 2025. The WACRFEE tax code has been assigned to all companies and employees with the Paid Medical Leave Employer Portion (WAPMLER) tax code.

Clients will be responsible for reporting this tax which can be reported along with the Paid Family Leave (WAPMLER) tax. You can find instructions for reporting on the Washing Paid Leave site.

12/20/2021

Washington has announced plans to change and improve the WA Cares Fund during the 2022 legislative session. Collection of this tax has been paused until April 2022, potentially until January of 2023. We will continue to post updates as they are received. More information can be found on the Washington Cares Fund site.

As a result of the new ruling, the WACRFEE tax code has been updated with a 0.00% rate for all companies and employees who currently are assigned to the WAPMLER tax code.

Federal

07/09/2021

In support of IRS modifications to Form 7200, the COVID-19 Form 7200 Credit Information standard report (Menu > Administration > Reporting > Standard Reports > Available) will reflect all emergency sick and emergency family leave tax categories and all applicable wages for employer Social Security (USSOCER) as of the second quarter 2021. Employer Social Security was previously exempt on the form. In addition, the report now includes information for the temporary COBRA premium subsidy.

Note: Medicare amounts for government tax categories (GSLPY and GFMLP) are currently under-calculated. We will be monitoring closely and will inform you when these will be corrected.

Florida

09/30/2021

On November 3, 2020 voters approved amendment 3, which amends Florida’s constitution to gradually increase the states minimum wage. Effective September 30, 2021 the Florida Minimum Wage is increasing to $10.00 per hour.

For additional information in regards to the increase schedule, please review the Florida State Website.

New York

07/01/2021

Effective July 1, 2021, the New York State Income Tax (NYSIT) and Yonkers, New York (NY003) withholding tables are updated per the latest 2021 statutory limits.

More information can be found on the New York State Website

Ohio

07/09/2021

Local tax credit increase, effective July 1, 2021, for West Alexandria, Preble County (OH1556) from 0.5% to 1%.

Note: No action is required on your part. Employees can reconcile when they file their taxes at the end of the year.

Texas

07/30/2021

Effective January 1, 2021, the Unemployment Obligation Assessment Rate (TXOARER) state tax code has been reactivated and updated with a wage base amount of $9,000 and a tax rate of 0.03% per statutory requirements.

An updater has been run to add the TXOARER tax code to any component company and employees configured with Texas State Unemployment Insurance – Employer (TXSUIER) and update historical wage and tax amounts.

More information can be found on the Texas Government Website.

Federal

04/09/2021

Update to the following deduction tax categories to ensure an annual dependent care limit of $10,500 (increased from $5,000) to comply with the new American Rescue Plan Act of 2021:

  • DEP – Dependent Care
  • D125 – Dependent Care Section 125

06/04/2021

The COVID-19 2020 Social Security Deferral Repayment standard report (Menu > Administration > Reporting > Standard Reports > Available) will now track 2021 repayment amounts for employees who deferred 2020 Social Security taxes.

  • To comply with recent Internal Revenue Service (IRS) guidance received for the American Rescue Plan Act of 2021, the following Families First Coronavirus Relief Act (FFCRA) earnings tax categories are no longer exempt from employer Social Security (USSOCER) tax payments, effective April 1, 2021:
    • Emergency Fam/Med Leave Pmt (EFMLP)
    • Emergency Sick Leave Pmt (ESLPY)
    • Govt Emergency Fam/Med Leave Pmt (GFMLP)
    • Govt Emergency Sick Leave Pmt (GSLPY)

Taxable wages and taxes calculated will be updated retroactively through April 1.

Minnesota

06/04/2021

An update was deployed on June 4th, 2021 which will link the new tax code MNFLAER – MN Federal Loan Interest Assessment to your existing MNSUI tax code in order to comply with state regulations. The tax calculation applies only to the tax mount due, not taxable wages. Calculation for the tax amount is as follows:

 

  • MNFLAER tax due = MNSUIER wages * MNSUI Rate * 4%

 

Additional information in regards to the Minnesota federal loan interest assessment can be found here on the Minnesota Unemployment Insurance Website.

Ohio

06/17/2021

Local tax rate increases, effective July 1, 2021, for:

  • Midvale, Tuscarawas County (OH1341) from 1.00% to 1.50%
  • Cridersville Village, Auglaize County (OH1749) from 1.00% to 1.50%

Oregon

06/04/2021

New Multnomah Preschool for All local income tax code, effective January 1, 2021, for Multnomah County (OR010 Multnomah Preschool). Tax rate is 1.5% for filers with wages over $125,000 (single) or $200,000 (married), and 3.0% for filers with wages over $250,000 (single) or $400,000 (married). OR0010 will be added to any existing company setup with Oregon State Income Tax (ORSIT).

New Metro Tax for Supportive Housing local income tax codes, effective January 1, 2021, for Washington and Clackamas counties (OR009 Metro Supportive Housing) and Multnomah County (OR009M Supportive Housing Multnomah). Tax rate is 1% for filers with wages over $125,000 (single) or $200,000 (married). OR009M will be added to any existing company setup with Oregon State Income Tax (ORSIT).

Action Required: To assign the new tax codes to applicable employees, you must set up a new Work Location and add applicable tax codes to either the “Work-in tax – resident rate” or Work-in tax – non-resident rate” drop down menu.

Note: Retroactive calculation of this tax for 2021 is not required. Any under-withholding will be reconciled when employees file their taxes at the end of the year.

Pennsylvania

05/07/2021

Local county rate increases, effective January 1, 2021, for:

  • Montgomery County (PA101091) from 1.4% to 1.45%
  • Bucks County (PA117551) from 0% to 1%

Federal

01/07/2021

The 2021 Federal Form W-4 is now available in PlanSource HCM.

Note: Revisions to the 2021 form were recently released by the Internal Revenue Service (IRS), and the updated form will be available in PlanSource HCM on February 12. No action is required on your part and you can use the current form until the updated form is available.

03/05/2021

Update to the ERC “Qualified Wages for ERC” and ERCHB “ERC Paid Health Benefits” deduction tax categories to ensure combined qualified wages and qualified paid health benefits cap amount is $7,000 per quarter in compliance with the Consolidated Appropriations Act, 2021. With this update, when the deduction tax category of ERC and the calculation rule of “None” is selected, the earnings on a check that will be subject to the employer portion of Social Security (USSOCER) will automatically multiply that amount by 0.7.

Note: If you use the calculation rule of “None” for the ERC tax category, an update will be applied to re-calculate to 70% of qualified wages for payrolls closed on or after January 1. It will also update any checks that reached the previous cap amount of $5,000 per year accommodating the new cap amount of $7,000 per quarter.

03/26/2021

NEW EARNINGS TAX CATEGORIES FOR FAMILIES FIRST CORONAVIRUS RESPONSE ACT (FFCRA)

New earnings tax categories added to support emergency paid sick leave or expanded family and medical leave for employees who are excluded from the definition of employment under section 3121 (b). ESLP2 “ESLPY for emp excluded from 3121(b)” and EFML2 “EFMLP for emp excluded from 3121(b)” support new lines in the Form 941 worksheet.

The COVID-19 Form 7200 Credit Information standard report ( Menu > Administration > Reporting > Standard Reports > Available) now reflects 70% of qualified wages to support the Employee Retention Credit, effective January 1, 2021.

State

01/07/2021

COLORADO / NEW MEXICO / NORTH DAKOTA / UTAH

The 2021 Form W-4 state withholding forms are now available.

Note: Revisions to the 2021 form were recently released by the IRS, and the updated form will be available in PlanSource HCM on February 12. No action is required on your part and you can use the current form until the updated form is available.

01/29/2021

OREGON / WASHINGTON

The following codes are being reclassified from local income tax codes to worker’s compensation codes to most accurately reflect their function:

  • WALIEE – WA Labor & Ind EE Withholding
  • WALIEP – WA Labor & Ind ER Paid
  • ORWCEE – Oregon W/C EE Withholding
  • ORWCEP – Oregon E/C ER Paid

WALIER (WA Labor & Ind ER Expense) or ORWCER (Oregon W/C ER Expense) will now be linked to WALIEP/E or ORWCEP/E assigned at the location and employee tax setup.

Note: There will be no change to how these tax codes calculate nor any changes to the tax history.

Kentucky

01/29/2021

Local tax rate increase for Glasgow City, Barren County (KY041) from 1.5% to 1.75%, effective July 1, 2021.

Maine

02/26/2021

PlanSource HCM updated to support the Maine Unemployment Administrative Fund tax code (MEUAFER). For companies already paying state unemployment insurance (MESUIER), the linked code (MEUAFER) will be added to the company and employee setup to ensure calculations and withholdings are in effect for future payrolls.

North Dakota

02/26/2021

Update deployed to correct North Dakota State Unemployment Insurance (NDSUIER) wages being incorrectly reduced by 401(k) amounts.

Note: No action is required on your part. An update will be applied prior to the end of the quarter to correct previously reported wages.

Ohio

01/22/2021

Local tax rate decreases, effective January 1, 2021, for:

      • Amelia Village, Clermont County (OH2151) from 1% to 0%
      • Wilmot Village, Stark County (OH1578) from 1.75% to 1.5%

Note: You may refund any over-withholding on the next available payroll or the employee can reconcile when they file their taxes at the end of the year.

02/12/2021

Local tax rate decrease from 1.75% to 1.5%, effective January 1, 2021, for:

  • Minerva Village, Carroll County (OH2156)
  • Minerva Village, Columbiana County (OH2157)
  • Minerva Village, Stark County (OH1348)

Note: You may refund any over-withholding on the next available payroll or the employee can reconcile when they file their taxes at the end of the year.

02/26/2021

New local tax for Latty Village, Paulding County (OH2214), effective January 1, 2021. Tax rate is 1%.

Puerto Rico

02/12/2021

2021 updates to qualified retirement plan limits:

  • Elective deferral limit and catch-up deferral limit remain at $15,000 and $1,500, respectively
  • Annual defined contribution plan maximum limit increase from $57,000 to $58,000
  • Annual compensation limit increase from $285,000 to $290,000
  • Deferral limits for dual qualified plans and federal government retirement plans remain at $19,500

Washington

01/29/2021

New tax code (WASEAJER) to support Seattle’s recent payroll expense tax, beginning January 1, 2021, for employers with payroll expenses over $7 million. The tax rate will range from 0.7% to 2.4% based on the cumulative compensation of employees with salaries above $150,000.

Federal

11/06/2020

2021 annual contribution limit updates for deferred compensation plans:

  • Contribution limit for 401(k), 403(b) and most 457 plans remains at $19,500.
  • Catch-up contribution limit for employees aged 50 and over remains at $6,500.
  • Limitation for defined contribution plans increased to $58,000 from $57,000.
  • Compensation limit increased to $290,000 from $285,000.

New earnings tax category NQVCP “NQ Plan/ER Contri/Vestd in Cur. Yr. Pmt” records non-qualified retirement plans, employer-paid retirement plan contributions, and vested current-year payments, effective January 1, 2020.

Earnings tax categories MNEPY “1099 Non Employee” and MNEUP “1099 Non Employee Update” are updated to report using Form 1099-NEC Box 1, and calculates federal and state income tax for these earnings when an employee has backup withholdings or other wage withholding elections.

Note: No action is required on your part. An updater was run to change historical tax reporting for the earnings tax categories.

Puerto Rico

12/11/2020

Form W-2PR is updated with changes for 2020 and is available to view and print.

Colorado

11/20/2020

Update to earnings tax category COGAR “Colorado GRNIS” and added new garnishment code “COGA2-CO Gar Oct 2020,” which reflects the new limits for writs of garnishments issued on or after October 1, 2020.

Connecticut

12/11/2020

Connecticut recently enacted the Paid Family and Medical Leave Act (PFMLA), which entitles all eligible Connecticut employees to a paid leave benefit. Beginning in January, employers must begin withholding employee contributions totaling 0.5% of the employee’s wages up to the Social Security contribution base in order to fund the program. The following new tax codes are added, effective January 1, 2021, to help you comply with the new regulation:

  • CTFMLEE – CT State Fam & Med Leave
  • CTPFMLEE – CT Private Family & Medical Leave

Note: Both tax codes will be added to your company setup if you have Connecticut State Unemployment Insurance (CTSUI) assigned. The state code (CTFMLEE) will be set as “Subject to tax” and the private code (CTPFMLEE) will be set as “Not subject to tax.” You can change this setting if you wish. Both codes will be automatically assigned to employees who have Connecticut State Income Tax (CTSIT) as their primary work location. All tax codes will be delivered with a 0% rate but will be changed to the default rates mandated by the state effective January 1.

For more information and full details on the new law, visit the Connecticut Paid Leave website.

Indiana

10/01/2020

Local tax decreases, effective October 1, for:

  • Pulaski County (IN082 and IN133) from 3.38% to 2.85%
  • Wayne County (IN095 and IN146) from 1.5% to 1.25%

12/30/2020

Local county rate increases, effective January 1, 2021, for:

  • Martin County (IN029 and IN030) from 1.75% to 2.5%
  • Owen County (IN080 and IN131) from 1.4% to 1.6%
  • Randolph County (IN084 and IN135) from 2.25% to 2.5%
  • Shelby County (IN087 and IN138) from 1.5% to 1.6%
  • Switzerland County (IN041 and IN042) from 1% to 1.25%
  • Union County (IN091 and IN142) from 1.75% to 2%

Ohio

11/20/2020

The Village of Smithfield (OH2139) has been dissolved and the municipal income tax rate of 1% is no longer in effect as of October 30, 2020.

Note: No action is required on your part. Any over-withholding will be reconciled when employees file their taxes at the end of the year.

12/18/2020

Local tax rate increases, effective January 1, 2021, for:

  • Fairborn City, Greene County (OH1177), from 1.5% to 2%
  • Timberlake Village, Lake County (OH1513), from 1% to 2%
  • Waynesville Village, Warren County (OH1981), from 0.5% to 0.75%

12/30/2020

Local school district rate changes, effective January 1, 2021, for:

    • Clyde-Green Springs EVSD, Sandusky County (OH1834) increase from 1% to 1.5%
    • Clyde-Green Springs EVSD, Seneca County (OH1887) increase from 1% to 1.5%
    • Triway LSD, Holmes County (OH2026) decrease from 1.75% to 1%
    • Triway LSD, Wayne County (OH2027) decrease from 1.75% to 1%
    • Valley View LSD, Montgomery County (OH1536) increase from 1.25% to 1.75%
    • Valley View LSD, Preble County (OH1967) increase from 1.25% to 1.75%

New local tax code OH2213 for Helena Village, Sandusky County, effective January 1, 2021. Tax rate is 1%.

Oregon

12/11/2020

New tax codes OR008 (employee) and OR008ER (employer) calculate per city ordinance to comply with Eugene’s new Community Safety Payroll Tax Ordinance, effective January 1, 2021. Upon deployment, these tax codes will be added to any existing company setup with Oregon State Income Tax (ORSIT).

Action Required: To assign the tax code to applicable employees, you must set up a new Work Location and add OR008 to the “Other” drop down menu.

Note: These taxes will only calculate for pay periods that begin on or after January 1.

12/18/2020

A new measure recently passed in Portland to raise money for supportive housing services for people experiencing homelessness. Beginning January 1, 2021, the program will collect a 1% tax on all taxable income of more than $125,000 for individuals and $200,000 for joint filers who live or work within the metro district.

A new tax code (OR009), calculating per the city ordinance, will be assigned to any company or component company that has locations with Oregon State Income Tax (ORSIT), effective January 1.

Action Required: To assign the tax code to applicable employees, you must set up a new Work Location and add OR009 to either the “Work-in tax – resident rate” or Work-in tax – non-resident rate” drop down menu.

We are awaiting final guidance from the city regarding withholding rules and we’ll be in touch again when more information is provided. For additional details on the supportive housing services, visit the Oregon Metro Government site.

Federal

09/01/2020

A presidential order effective September 1, 2020 gives employees the opportunity to defer their portion of social security taxes between September 1, 2020 and December 31, 2020 if they are earning $4,000 or less per bi-weekly pay period. Currently repayment of those taxes would begin January 1 through April 30, 2021 with equal portions being added to their current social security tax amount for the corresponding payroll cycles between 01/01/2021 and 04/30/2021.

Developing information in regards to this order can be viewed on the IRS Website.

07/02/2020

Excess Social Security (USSOCEE) wages for the following earnings tax categories will be recorded in their own fields to ensure proper reporting on Form 941:

  • EFMLP “Emergency Fam/Med Leave Pmt”
  • ESLPY “Emergency Sick Leave Pmt”
  • GFMLP “Govt Emergency Fam/Med Leave Pmt”
  • GSLPY “Govt Emergency Sick Leave Pmt”

California

09/18/2020

Update to the following earnings tax categories to ensure California workers’ compensation wages are included, effective January 1, 2020, for:

  • BERPY – Bereavement Payment
  • MILAS – Suppl. Military Pay Active Service
  • JURPY – Jury Duty Payment

New Jersey

07/02/2020

The New Jersey (NJ002) Waterfront Commission has reduced the assessment fee from 1.8% to 1.7%, effective July 1. 2020.

New York

09/18/2020

The employee contribution rate for New York Paid Family Leave will increase to 0.5111% of gross wages per pay period with a maximum annual contribution of $385.34, effective January 1, 2021. Visit the state website for full details on updates for 2021.

07/02/2020

The New York (NY005) Waterfront Commission has reduced the assessment fee from 1.8% to 1.7%, effective July 1. 2020.

Ohio

09/18/2020

Cincinnati City will decrease its wage tax rate from 2.1% to 1.8%, effective October 2, 2020, affecting the following tax codes:

  • OH1006 – Cincinnati City – Resident/Hamilton
  • OH1656 – Cincinnati City – Non-Resident/Hamilton

Pennsylvania

07/16/2020

Local non-resident tax rate increase for Philadelphia (PA100012), from 3.4481% to 3.5019%, effective July 1, 2020.

08/28/2020

Local non-resident tax rate increase for Hazleton City, Luzerne County (PA105058), from 1% to 2%, effective July 1, 2020.

Federal

04/10/2020

Update to the following Families First Coronavirus Response Act earnings tax categories to make them exempt from the employer portion of social security tax for paid sick and family/medical leave:

  • EFMLP “Emergency Fam/Med Leave Pmt”
  • ESLPY “Emergency Sick Leave Pmt”

04/17/2020

Update to correct the wage and tax calculation of any calculated employer social security tax retroactive to April 1 for the following Families First Coronavirus Response Act earnings tax categories:

  • EFMLP “Emergency Fam/Med Leave Pmt”
  • ESLPY “Emergency Sick Leave Pmt”

Note: No action is required on your part.

 

New deduction tax categories to report the qualified wages and qualified paid health benefits that will be used to receive the Employee Retention Tax Credit per the Coronavirus Aid, Relief, and Economic Security (CARES) Act:

    • ERC “Qualified Wages for ERC”
    • ERCHB “ERC Paid Health Benefits”

New deduction tax categories to report the qualifying paid healthcare benefits for employees taking paid sick or family/medical leave per the Families First Coronavirus Response Act:

      • PFML “PFML Paid Health Benefits”
      • PSL “PSL Paid Health Benefits”

05/08/2020

Update to ensure the employer portion of Medicare tax that is paid for the Families First Coronavirus Response Act earnings tax categories (ESLPY and EFMLP) is tracked separately as a credit in UltiPro for proper reporting.

Note: No action is required on your part as a result of this update. Any wages previously paid with these tax categories will have the credit retroactively calculated and applied with your next processed payroll.

05/29/2020

Update to the following deduction tax categories to ensure a combined cap amount of $5,000 in order to comply with the Coronavirus Aid, Relief, and Economic Security (CARES) Act:

      • ERC “Qualified Wages for ERC”
      • ERCHB “ERC Paid Health Benefits”

Note: If you’re using the timeclock import to add these deductions to paychecks, you’ll need to continue to monitor the amounts manually to avoid exceeding the cap. An update to ensure the cap amount is respected when using the timeclock import will be available on June 12.

  • Update to the ERC “Qualified Wages for ERC” deduction tax category. Now, when the calculation rule of “None” is selected, the system will calculate the earnings on a check that are subject to the employer portion of Social Security (USSOCER), and automatically multiply that amount by 0.5 in order to comply with the CARES Act.

06/12/2020

The Internal Revenue Service announced increased contribution limits for Health Savings Accounts (HSA) for 2021:

  • HSA Individual limit will be $3,600
  • HSA Individual with catch-up limit will be $4,600
  • HSA Family limit will be $7,200
  • HSA Family with catch-up limit will be $8,200

California

05/29/2020

New earnings tax category MQPUP “ER Contribution to qual retirement plan (upd)” to make employer contributions to a qualified retirement plan exempt from all federal taxes and taxable for California state unemployment insurance (SUI) and state disability insurance (SDI), effective January 1, 2020.

Federal

01/03/2020

The employee contribution rate for New York Paid Family Leave will increase to 0.5111% of gross wages per pay period with a maximum annual contribution of $385.34, effective January 1, 2021. Visit the state website for full details on updates for 2021.

PlanSource HCM now supports Code FF for Box 12 reporting on the W-2c electronic file. The following earnings tax categories are reported in the file:

  • FFQUP – Code FF – QSEHRA (update)
  • FFQPY – Code FF – QSEHRA (payment)

01/24/2020

PlanSource HCM updates to support the new 2020 Federal Form W-4, updated W-4 in Spanish, and more.

  • COLORADO / NEW MEXICO
    • PlanSource HCM update to support the 2020 Federal Form W-4 as the state’s withholding form.
  • DELAWARE / SOUTH CAROLINA
    • New 2020 state specific W-4 withholding forms (Form DE-W4 and Form SC W-4) are now available.

03/13/2020

The 2020 Form 941 is now available.

Puerto Rico

01/10/2020

2020 updates to qualified retirement plan limits:

  • Deferral limit increase from $19,000 to $19,500.
  • Annual compensation limit increase from $280,000 to $285,000.
  • Defined benefit dollar maximum increase from $56,000 to $57,000.
  • The elective deferral limit and catch-up deferral limit remain the same at $15,000 and $1,500 respectively.

Kentucky

01/24/2020

Occupational License Tax rate increase for Henderson, Henderson County (KY209), from 1.29% to 1.49%, effective January 14, 2020.

Action Required: Withhold any under withheld amounts on the next available payroll.

Massachusetts

03/13/2020

Employer 401K match contributions are now calculated as wages for Massachusetts Paid Family and Medical Leave.

New York

02/21/2020

New York State Disability Insurance (NYSDI) tax is excluded from severance pay and the SEVPY and SEVUP earnings tax categories have been updated, effective January 1, 2020, to reflect exemptions for the following tax codes:

  • NYSDIEE
  • NYSDIEP
  • NYSDIER

Ohio

01/24/2020

Tax rate decrease for Lithopolis, Fairfield County (OH1291), from 1.5% to 1%, effective January 1, 2020.

Action Required: Refund any over withheld taxes on the next available payroll.

Washington

02/21/2020

The following third party sick pay earnings tax categories are exempt for the Washington Paid Family and Medical premium calculation, effective January 1, 2020:

  • PPL7P – Private Plan-under 6 mths/7 days or less (payment)
  • PPM7P – Private Plan-under 6 mths/over 7 days (payment)
  • PPNTP – Private Plan-after 6 mths/after 7 days (payment)
  • SNRUP – 3rd Party Sick No W-2 Issued (update)
  • TPFUP – 3rd Party Sick Pay FUTA Taxable (update)
  • TPSUP – 3rd Party Sick Pay W-2 issued (update)