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  • EE0-1 report

    What Is the EEO-1 Report for Employers?

    posted by Mike Kappel
    Newest Article
  • reciprocity and reciprocal states for income tax

    What Is State Reciprocity?

    posted by Michele Bossart
    Recent Article
  • What Is the EEO-1 Report for Employers?

    Federal employment law requires certain U.S. employers to submit an annual EEO-1 Report, which is a count of all employees, ordered by job category, ethnicity, race, and gender. Employers must submit the report to the U.S. Equal Employment Opportunity Commission’s (EEOC) Joint Reporting Committee.

    What Is State Reciprocity?

    Here’s a tricky question: when a person lives in one state but works in another, to which state should the employee owe state income tax?

    After all, both states may have a claim to the tax, but it certainly isn’t fair to tax the employee twice.

    What is Employer Withholding?

    A young employee’s very first paycheck can come as a shock. After all, they were hired for a specific hourly wage or monthly salary. Then their paycheck arrives, and it’s much less than expected.  That’s because of employer withholding — their employer is legally required to withhold a number of different taxes and other payments from their gross pay.

    What Are Regular Hours?

    The term “regular hours” can mean several different things, but most often refers to the usual hours that employers expect their employees to work.  When an employer runs payroll, they usually must select from several different hours types: regular hours, overtime hours, holiday hours, etc.

    What Are Payroll Liabilities?

    Payroll liabilities are any type of payment related to payroll that the company owes, but has not yet paid. Payroll liabilities can include taxes withheld from employees, such as federal and state income tax, Social Security, and Medicare, as well as other items such as union dues, health insurance contributions, 401k retirement fund contributions, and wage garnishments.

    The most common payroll liabilities are the taxes that make up an Employer’s 941 deposit. Employers are required to withhold federal, state, and local income tax from most employee paychecks, as well as Social Security and Medicare taxes which the employer matches. Most employers remit these payroll liabilities on a monthly schedule using the Electronic Federal Taxpayer System (EFTPS).

    An Overview of State Income Tax

    Employee wages are often subject to two different types of income tax withholding: federal income tax and state income tax. State income tax funds a variety of different state projects and programs, including K-12 and higher education, Medicaid and health care, corrections, public assistance, and other needs, according to the National Association of State Budget Officers. 

    Most states impose individual income taxes, except for seven states that do not. Two states have limited state income taxes.

    Individual Income Tax
    There are 41 different states with individual income taxes. These state tax amounts are withheld by their employers before they receive their net pay. Tax rates vary and may change depending on the state’s need. States with individual income tax may offer specific deductions for individuals, although there are different limits on these deductions.

    What Are Gross Wages?

    Gross pay, also known as gross wages, is what attracts many people to a job. They see the advertised salary or hourly pay and think of everything they could do with that income. However, when they receive a paycheck, they realize that they didn’t take into account the gross wages versus the net wages.

    Gross wages are the total amount an employee is paid before any taxes, deductions, insurance premiums, and other withholdings. In fact, a person’s take-home pay may be significantly less than their gross wages.

    What is Supplemental Pay?

    Supplemental pay can include a number of different payments from an employer to an employee. Also known as supplemental wages, supplemental pay can include the following: bonuses, commission, overtime, retroactive pay increases, cashed-in sick leave, prizes, back pay, and more.

    These different payments are made in addition to the employee’s standard wage, and when it comes to taxes, they are considered completely different. Supplemental pay is taxed like wages in some ways (Medicare and Social Security are normally deducted), but they are sometimes taxed in additional ways, too. For that reason, take care when dealing with supplemental payments to make sure all regulations are followed correctly.

    What Is a Reporting Agent?

    Some businesses take on all payroll tasks themselves: the accounting, writing and distributing checks, figuring and submitting all necessary taxes, and handling other withholdings. Some companies, however, may not have the time to devote to payroll and will outsource payroll tasks to a company that specializing in this area. To the IRS, this company is known as a reporting agent.

    The business will need to file a Form 8655, a Reporting Agent Authorization Form, with the Internal Revenue Service. This form establishes the relationship between the company and the reporting agent and authorizes the reporting agent to submit tax returns, make tax deposits, etc., on the company’s behalf.

    What is COBRA?

    The Consolidated Omnibus Budget Reconciliation Act is better known as COBRA — a way for workers to keep their group health insurance coverage after they have lost their job. The law was passed in 1985 to give employees and their families the chance to temporarily continue health coverage.

    COBRA coverage is limited, and the timeframe that COBRA is offered depends on the circumstances that resulted in the loss of benefits. Workers who have lost their jobs, are changing jobs, or voluntarily left their jobs may be eligible for COBRA. Families may be eligible if they will lose their benefits due to the death of the insured.

    What Is the EEO-1 Report for Employers?

    Federal employment law requires certain U.S. employers to submit an annual EEO-1 Report, which is a count of all employees, ordered by job category, ethnicity, race, and gender. Employers must submit the report to the U.S. Equal Employment Opportunity Commission’s (EEOC) Joint Reporting Committee.

    What Is State Reciprocity?

    Here’s a tricky question: when a person lives in one state but works in another, to which state should the employee owe state income tax?

    After all, both states may have a claim to the tax, but it certainly isn’t fair to tax the employee twice.

    What is Employer Withholding?

    A young employee’s very first paycheck can come as a shock. After all, they were hired for a specific hourly wage or monthly salary. Then their paycheck arrives, and it’s much less than expected.  That’s because of employer withholding — their employer is legally required to withhold a number of different taxes and other payments from their gross pay.

    What Are Regular Hours?

    The term “regular hours” can mean several different things, but most often refers to the usual hours that employers expect their employees to work.  When an employer runs payroll, they usually must select from several different hours types: regular hours, overtime hours, holiday hours, etc.

    What Are Payroll Liabilities?

    Payroll liabilities are any type of payment related to payroll that the company owes, but has not yet paid. Payroll liabilities can include taxes withheld from employees, such as federal and state income tax, Social Security, and Medicare, as well as other items such as union dues, health insurance contributions, 401k retirement fund contributions, and wage garnishments.

    The most common payroll liabilities are the taxes that make up an Employer’s 941 deposit. Employers are required to withhold federal, state, and local income tax from most employee paychecks, as well as Social Security and Medicare taxes which the employer matches. Most employers remit these payroll liabilities on a monthly schedule using the Electronic Federal Taxpayer System (EFTPS).

    An Overview of State Income Tax

    Employee wages are often subject to two different types of income tax withholding: federal income tax and state income tax. State income tax funds a variety of different state projects and programs, including K-12 and higher education, Medicaid and health care, corrections, public assistance, and other needs, according to the National Association of State Budget Officers. 

    Most states impose individual income taxes, except for seven states that do not. Two states have limited state income taxes.

    Individual Income Tax
    There are 41 different states with individual income taxes. These state tax amounts are withheld by their employers before they receive their net pay. Tax rates vary and may change depending on the state’s need. States with individual income tax may offer specific deductions for individuals, although there are different limits on these deductions.

    What Are Gross Wages?

    Gross pay, also known as gross wages, is what attracts many people to a job. They see the advertised salary or hourly pay and think of everything they could do with that income. However, when they receive a paycheck, they realize that they didn’t take into account the gross wages versus the net wages.

    Gross wages are the total amount an employee is paid before any taxes, deductions, insurance premiums, and other withholdings. In fact, a person’s take-home pay may be significantly less than their gross wages.

    What is Supplemental Pay?

    Supplemental pay can include a number of different payments from an employer to an employee. Also known as supplemental wages, supplemental pay can include the following: bonuses, commission, overtime, retroactive pay increases, cashed-in sick leave, prizes, back pay, and more.

    These different payments are made in addition to the employee’s standard wage, and when it comes to taxes, they are considered completely different. Supplemental pay is taxed like wages in some ways (Medicare and Social Security are normally deducted), but they are sometimes taxed in additional ways, too. For that reason, take care when dealing with supplemental payments to make sure all regulations are followed correctly.

    What Is a Reporting Agent?

    Some businesses take on all payroll tasks themselves: the accounting, writing and distributing checks, figuring and submitting all necessary taxes, and handling other withholdings. Some companies, however, may not have the time to devote to payroll and will outsource payroll tasks to a company that specializing in this area. To the IRS, this company is known as a reporting agent.

    The business will need to file a Form 8655, a Reporting Agent Authorization Form, with the Internal Revenue Service. This form establishes the relationship between the company and the reporting agent and authorizes the reporting agent to submit tax returns, make tax deposits, etc., on the company’s behalf.

    What is COBRA?

    The Consolidated Omnibus Budget Reconciliation Act is better known as COBRA — a way for workers to keep their group health insurance coverage after they have lost their job. The law was passed in 1985 to give employees and their families the chance to temporarily continue health coverage.

    COBRA coverage is limited, and the timeframe that COBRA is offered depends on the circumstances that resulted in the loss of benefits. Workers who have lost their jobs, are changing jobs, or voluntarily left their jobs may be eligible for COBRA. Families may be eligible if they will lose their benefits due to the death of the insured.