Bing Tracking

Payroll Blog

Payroll Training, Tips, and News

  • Employer Registration

    What You Need to Know About Mandatory Employer Registration

    posted by Rachel Blakely-Gray
    Newest Article
  • Follow this comprehensive checklist when you hire your first employee.

    Use Our Ultimate Checklist to Hire Your First Employee

    posted by Amanda Cameron
    Recent Article
  • Health Care Reform: Lifetime and Annual Limits Rules

    Interim final regulations have been issued by the Department of Health and Human Services (HHS), Department of Labor, and Treasury for annual and lifetime limits within group health insurance plans.

    Lifetime Limits
    Under the Affordable Care Act, a plan may not impose a lifetime dollar limit on essential benefits provided to an individual.  This requirement is effective for plan years beginning after September 23, 2010, so for plans with calendar year renewals, it would be effective January 1, 2011.  This requirement applies to both grandfathered and non-grandfathered plans.

    According to the Act, essential health benefits include, at a minimum, items and services in the following categories: ambulatory patient services; emergency services; hospitalization, maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care. Interestingly, the regulations provide no further guidance on the definition of “essential health benefits” except to say that, until HHS issues such guidance, the regulatory agencies will take into account good-faith efforts to comply with the “guidelines” set forth in the Act.

    A group health plan may still impose lifetime limits on non-essential health benefits. Thus, the key will be for the health plan to determine which benefits are “essential.”

    Special Enrollment Notice
    For those who have already reached their lifetime limit on essential benefits, the health plan will need to provide them a notice to let them know that the lifetime limit no longer applies, and (assuming they are still eligible) they have a 30 day special enrollment period to re-enroll in the plan.  This notice must be provided no later than the first day of the plan year beginning on or after September 23, 2010.  The DOL has issued model language for this notice.

    Annual Limits
    Prior to January 1, 2014, both grandfathered and non-grandfathered plans may impose a “restricted” annual limit on the dollar limit of essential benefits provided to an individual.  The annual limit is restricted in that it provides a three year phase-out.  The annual limit may not be less than:

    • $750,000 for any plan year beginning from September 23, 2010 to September 22, 2011
    • $1.25 million for any plan year beginning from September 23, 2011 to September 22, 2012
    • $2 million for any plan year beginning from September 23, 2012 to December 31, 2013

    Health Care Reform: What Is a Grandfathered Plan?

    When the Affordable Care Act (the Act) was passed on March 23, 2010, various health care coverage rules were imposed on health plans.  Some of these rules do not apply to health plans that were in effect as of March 23, 2010.  These plans are referred to as “grandfathered.”

    Recently, the three agencies charged with administering the Act (HHS, DOL, and Treasury) have issued clarification as to what exactly a grandfathered plan is, and the various changes made by health plans that would lose their grandfathered status.

    Grandfathered plan protection

    If a plan is grandfathered, the plan will still need to comply with many of the Act’s mandates.  However, grandfathered plans are exempt from the following mandates:

    • Required coverage for in-network emergency services;
    • Required first-dollar coverage for certain in-network preventive services
    • A prohibition on restricting the designation of primary care providers or requiring referrals for OB/GYN services;
    • Required coverage of routine expenses for participation in clinical trials;
    • Enhanced claim appeal procedures, including implementation of an external appeals process;
    • A prohibition on discriminating in favor of highly compensated individuals (i.e., applying the same nondiscrimination rules to both insured and self-funded plans).

    Keeping grandfathered status

    In order for a plan to retain its grandfathered status, it must not make any significant coverage or cost sharing changes to the plan.  Here are the changes that grandfathered plans would be prohibited from making, or else they would lose grandfathered status:

    • Cannot significantly cut or reduce benefits.
    • Cannot raise co-insurance charges.
    • Cannot significantly raise co-payment charges.
    • Cannot significantly raise deductibles.
    • Cannot significantly lower employer contributions.
    • Cannot add or tighten an annual limit on what the insurer pays.
    • Cannot change insurance companies, however self funded plans may change Third Party Administrators. [As of 11/15/10, HHS has removed this requirement. Plans can change insurance companies and remain grandfathered if the remaining items stay the same.]

    Grandfathered health plans pros and cons

    Employers will need to consider whether the advantages of keeping grandfathered status protection outweighs the cost sharing flexibility associated with non-grandfathered plans.  There are many unknowns at this point how the insurance exchanges beginning in 2014 will affect group health plans, but the HHS estimates that only about 55% of large employers and 34% of small employers will remain grandfathered by 2013.

    For more information about grandfathered plans, see www.Heathcare.gov

    Grandfathering FAQs on the HHS website

    Don’t spend time worrying about payroll deductions, when you could be focusing on revenue-generating tasks. Use Patriot Software’s Payroll Services to calculate, file, and remit your payroll taxes for you. Try it free (and stress free) for 30 days!

    Health Care Reform Update: Preventive Care Rules Clarified

    New regulations were issued on July 14, 2010, by The Department of Health and Human Services (HHS), the Department of Labor, and the Treasury regarding preventive care coverage requirements.  The HHS estimates that Americans currently use preventive services at about half of the recommended rate, due to the cost of these services.  According to the HHS, the intention of these regulations is to make preventive care more affordable, so that chronic diseases, which are often preventable, can be detected and treated or prevented early, thereby reducing healthcare costs and promoting health and wellness.

    Health plans that are not “grandfathered plan” will be required to include preventive care services beginning with plan years renewing after September 23, 2010, which would be January 1, 2011 for plans that renew each calendar year.  Grandfathered plans, which are plans that have not made certain substantial changes to plan design or costs will not have to meet this preventive care requirement.

    The covered preventive services would be available at no cost to the employee.  In other words, these services are not subject to a deductible, co-pay, or co-insurance, and would be covered 100% by the health plan, as long as they received services from an in-network provider.  Plans are still allowed to share the cost of preventive services provided by an out-of-network provider.

    Included in the preventive services are:

    • Screenings for diseases such as cancer, diabetes, high cholesterol, and high blood pressure
    • Vaccines for both children and adults
    • Pediatric care
    • Prevention for women including pregnancy related screenings and mammograms.

    For further information about the new preventive care rules, please visit www.healthcare.gov

    Ohio Mandating Electronic Child Support Payments

    The State of Ohio has passed legislation that requires employers with at least 50 employees to remit their payments electronically.  Prior to the legislation, large employers had the option of sending paper checks to the Ohio Child Support Payment Central processing center in Columbus.

    Ohio still encourages employers with less than 50 employees to also make child support payments electronically.  Electronic payments are more efficient and less costly for both employers and the State of Ohio.

    Employers have two options for remitting child support payments electronically:

    1) Online debit through www.ExpertPay.com
    This is a secure site that is free for employers to use.  Once an employer has registered as a user, they can initiate child support payments directly on this website.  The site offers reporting for previous payments.

    2) Electronic Funds Transfer
    You can send a special NACHA ACH credit file to your bank that contains details about the support payment, including employee and case information.  Check with your online payroll provider to see if this option is available.

    If you are on Ohio employer with at least 50 employees, and are currently remitting child support payments with a paper check, you will need to determine which of the two electronic methods will work best for your company.

    Earned Income Credit – What Is It and How Does It Work?

    NOTE: Effective January 1, 2011 the option for advanced EIC payments has been eliminated. Employers are not longer able to advance a portion of the credit with each paycheck.

    Earned Income Credit (EIC) can be referred to several ways, such as Earned Income Tax Credit (EITC) or Advanced Earned Income Credit (AEIC).

    What is EIC?
    EIC is a tax credit for certain individuals who don’t earn a high income and qualify for EIC.  They would receive the tax credit when they file their personal tax return.

    Annual EEO Reporting: Are You Ready?

    Private employers with over 100 employees or federal contractors with at least 50 employees are required each year to file the EEO-1 Report with the EEOC. Employers will report the demographic make-up of their workforce, which includes gender, ethnicity by job class. The annual reporting period starts every July, and employers must file their report no later than September 30th.

    If you are required to file, now is the time to make sure you have all of your employees properly classified by gender, ethnicity, and job class. It is recommended that employees self-identify their race/ethnicity, and can be part of the employee’s new hire paperwork. If this is not possible, employers are permitted to classify their employees’ race based on “visual observation,” but only if the employee’s answer is not available.

    The Race/Ethnicity categories are as follows:

    • Hispanic or Latino – A person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin regardless of race.
    • White (Not Hispanic or Latino) – A person having origins in any of the original peoples of Europe, the Middle East, or North Africa.
    • Black or African American (Not Hispanic or Latino) – A person having origins in any of the black racial groups of Africa.
    • Native Hawaiian or Other Pacific Islander (Not Hispanic or Latino) – A person having origins in any of the peoples of Hawaii, Guam, Samoa, or other Pacific Islands.
    • Asian (Not Hispanic or Latino) – A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian Subcontinent, including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam.
    • American Indian or Alaska Native (Not Hispanic or Latino) – A person having origins in any of the original peoples of North and South America (including Central America), and who maintain tribal affiliation or community attachment.
    • Two or More Races (Not Hispanic or Latino) – All persons who identify with more than one of the above five races.
    • Officials and Managers
    • Professionals
    • Technicians
    • Sales Workers
    • Administrative Support Workers
    • Craft Workers
    • Operatives
    • Laborers and Helpers
    • Service Workers

    What You Will Need To File
    If you have never filed an EEO-1 before, and are required to file, you will need to obtain a company Login ID and password to the EEOC’s website so that you can enter your demographic information and file online. You can email the Joint Reporting Committee to get set up.

    For each worksite location at your company, you will need to report the number of male and female employees within each race and job category that were employed during any payroll period between July and September. Below is a sample grid layout similar to the data entry page on the EEOC website.

    EEO Data Sample resized 600

    For more information about the EEO-1 filing process, visit the EEO-1 Survey Website.

    Unchanged 2011 HSA Contribution Limits

    The IRS recently announced that the contribution limits for Health Savings Accounts (HSAs) will not be changing for next year.  The IRS puts limits on four categories pertaining to HSAs:

    1. The amount of money someone can contribute to their HSA in a calendar year
    2. The catch-up amount for those age 55 and over (note this is a different age limit than 401k plans, which is age 50 and over)
    3. The minimum medical insurance plan deductible in order to qualify for an HSA
    4. The maximum out-of-pocket limit of the medical insurance plan

    Here are the 2010- 2011 HSA Contribution Limits:

    Single Contribution Limit to HSA        $3,050.00

    Family Contribution Limit to HSA        $6,150.00

    Catchup for age 55+                        $1,000.00

    Minimum Single HDHP Deductible         $1,200.00

    Minimum Family HDHP Deductible        $2,400.00

    Maximum Single HDHP OOP Limit        $5,950.00

    Maximum Family HDHP OOP Limit         $11,900.00

    New Reporting Requirements in Health Care Reform

    Possibly the most significant reporting change included in the health care reform bills for small businesses is the change in 1099 reporting, which bears no specific relationship to the health care insurance system, the primary focus of the bills.  The Patient Protection and Affordable Care Act (“PPACA”) includes a provision that expands the reporting requirements for reporting trade or business expenditures annually to the IRS.  The expenditures generally were reportable when they hit a $600 threshold for services rendered and generally were not reportable if the payments were made to a corporation.

    PPACA has expanded this reporting requirement in two ways.  First, it has extended the reportable payments to include those made to corporations (except those that are exempt under IRC Section 501(a)).  Second, it has expanded the types of payments that are reportable by including expenditures for property as well as services.

    Because of the increased scope of reportable expenditures, small businesses will likely find that they have a significantly larger number of 1099’s to file at year end.  Identifying these additional reportable payments, procuring the required information from the payees, and producing the Forms 1099 will assuredly create a heavier burden for the average small business.

    These provisions will go into effect for payments made during tax years beginning after December 31, 2011.

    Hire Act Forces IRS to Revise W-2/W-3 Forms, Instructions

    Due to the HIRE Act, the IRS has revised the forms and instructions for W-2, W-3, and W-3c. Below are some highlights of these changes:

    Form W-2 “Wage and Tax Statement”

    The actual format has not changed but they have added the code “CC” to be used in Box 12. There are a few things that employers need to keep in mind regarding what should be entered using this new code “CC”:

    Only wages paid to a “qualified” employee should be reported.

    Only use this code to report wages of employees on your payroll that are exempt from the employer’s portion of social security tax as a result of the HIRE Act.

    Report the exempt wages (not the tax).

    Include all exempt wages which includes both periods March 19-31,2010 AND April 1st, December 31, 2010.

    The amount of exempt wages can not exceed $106,800 (the social security wage limit for 2010).

    Form W-3Transmittal of Wage and Tax Statements”

    Instead of having a Box 12, the form now has a Box 12a and Box 12b.  What was reported in Box 12 before will now be entered in Box 12a “Deferred Compensation” (includes codes D-H, S, Y, AA & BB).  Box 12b “HIRE Exempt Wages and Tips” will be used to report the total exempt wages that were reported on all of the W-2 forms Box 12 labeled with “CC”.

    Form W-3c “Transmittal of Corrected Wage and Tax Statements

    Changes to this form are similar to the ones in Form W-3.  Basically, Box 12 has been replaced with Box 12a and Box 12b.  Box 12a will be used for the “Deferred Compensation” (includes D-H, S, Y, AA & BB).  Box 12b “HIRE exempt Wages and Tips” for reporting the HIRE exempt wages.

    The IRS has also updated the instructions for the 2010 Forms W2 & W3. The changes are found on page 11 where they have added instructions for the new code “CC”.

    Please stay tuned for further updates.

    Employer Provided Health Coverage Available for Children

    As a result of changes made by the recently enacted Patient Protection and Affordable Care Act, health coverage provided for an employee’s children under 27 years of age is now generally tax-free to the employee, effective March 30, 2010.  These changes immediately allow employers with Section 125 cafeteria plans to permit employees to begin making pre-tax contributions to pay for this expanded benefit.

    IRS Notice 2010-38 explains these changes and provides further guidance.

    This expanded health care tax benefit applies to employer-provided coverage and reimbursements including cafeteria plans, flexible spending arrangements (FSA), health reimbursement arrangements (HRA), voluntary employees’ beneficiary associations (VEBA) and self-employed individuals who qualify for the self-employed health insurance deduction pursuant to Code Sec. 162(l).

    Employees who have children who will not have reached age 27 by the end of the tax year are eligible for the new tax benefit from March 30, 2010, forward, if the children are already covered under the employer’s plan or are added to the employer’s plan at any time. For this purpose, a child includes a son, daughter, stepchild, adopted child or eligible foster child. The child does not have to be the taxpayer’s dependent for tax purposes pursuant to Code Sec. 152(a).

    The notice says that employers with cafeteria plans may permit employees to immediately make pre-tax salary reduction contributions to provide coverage for children under age 27, even if the cafeteria plan has not yet been amended to cover these individuals. Plan sponsors then have until the end of 2010 to amend their cafeteria plan language to incorporate this change.

    Follow this link for additional Information on other health care provisions.

    Health Care Reform: Lifetime and Annual Limits Rules

    Interim final regulations have been issued by the Department of Health and Human Services (HHS), Department of Labor, and Treasury for annual and lifetime limits within group health insurance plans.

    Lifetime Limits
    Under the Affordable Care Act, a plan may not impose a lifetime dollar limit on essential benefits provided to an individual.  This requirement is effective for plan years beginning after September 23, 2010, so for plans with calendar year renewals, it would be effective January 1, 2011.  This requirement applies to both grandfathered and non-grandfathered plans.

    According to the Act, essential health benefits include, at a minimum, items and services in the following categories: ambulatory patient services; emergency services; hospitalization, maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care. Interestingly, the regulations provide no further guidance on the definition of “essential health benefits” except to say that, until HHS issues such guidance, the regulatory agencies will take into account good-faith efforts to comply with the “guidelines” set forth in the Act.

    A group health plan may still impose lifetime limits on non-essential health benefits. Thus, the key will be for the health plan to determine which benefits are “essential.”

    Special Enrollment Notice
    For those who have already reached their lifetime limit on essential benefits, the health plan will need to provide them a notice to let them know that the lifetime limit no longer applies, and (assuming they are still eligible) they have a 30 day special enrollment period to re-enroll in the plan.  This notice must be provided no later than the first day of the plan year beginning on or after September 23, 2010.  The DOL has issued model language for this notice.

    Annual Limits
    Prior to January 1, 2014, both grandfathered and non-grandfathered plans may impose a “restricted” annual limit on the dollar limit of essential benefits provided to an individual.  The annual limit is restricted in that it provides a three year phase-out.  The annual limit may not be less than:

    • $750,000 for any plan year beginning from September 23, 2010 to September 22, 2011
    • $1.25 million for any plan year beginning from September 23, 2011 to September 22, 2012
    • $2 million for any plan year beginning from September 23, 2012 to December 31, 2013

    Health Care Reform: What Is a Grandfathered Plan?

    When the Affordable Care Act (the Act) was passed on March 23, 2010, various health care coverage rules were imposed on health plans.  Some of these rules do not apply to health plans that were in effect as of March 23, 2010.  These plans are referred to as “grandfathered.”

    Recently, the three agencies charged with administering the Act (HHS, DOL, and Treasury) have issued clarification as to what exactly a grandfathered plan is, and the various changes made by health plans that would lose their grandfathered status.

    Grandfathered plan protection

    If a plan is grandfathered, the plan will still need to comply with many of the Act’s mandates.  However, grandfathered plans are exempt from the following mandates:

    • Required coverage for in-network emergency services;
    • Required first-dollar coverage for certain in-network preventive services
    • A prohibition on restricting the designation of primary care providers or requiring referrals for OB/GYN services;
    • Required coverage of routine expenses for participation in clinical trials;
    • Enhanced claim appeal procedures, including implementation of an external appeals process;
    • A prohibition on discriminating in favor of highly compensated individuals (i.e., applying the same nondiscrimination rules to both insured and self-funded plans).

    Keeping grandfathered status

    In order for a plan to retain its grandfathered status, it must not make any significant coverage or cost sharing changes to the plan.  Here are the changes that grandfathered plans would be prohibited from making, or else they would lose grandfathered status:

    • Cannot significantly cut or reduce benefits.
    • Cannot raise co-insurance charges.
    • Cannot significantly raise co-payment charges.
    • Cannot significantly raise deductibles.
    • Cannot significantly lower employer contributions.
    • Cannot add or tighten an annual limit on what the insurer pays.
    • Cannot change insurance companies, however self funded plans may change Third Party Administrators. [As of 11/15/10, HHS has removed this requirement. Plans can change insurance companies and remain grandfathered if the remaining items stay the same.]

    Grandfathered health plans pros and cons

    Employers will need to consider whether the advantages of keeping grandfathered status protection outweighs the cost sharing flexibility associated with non-grandfathered plans.  There are many unknowns at this point how the insurance exchanges beginning in 2014 will affect group health plans, but the HHS estimates that only about 55% of large employers and 34% of small employers will remain grandfathered by 2013.

    For more information about grandfathered plans, see www.Heathcare.gov

    Grandfathering FAQs on the HHS website

    Don’t spend time worrying about payroll deductions, when you could be focusing on revenue-generating tasks. Use Patriot Software’s Payroll Services to calculate, file, and remit your payroll taxes for you. Try it free (and stress free) for 30 days!

    Health Care Reform Update: Preventive Care Rules Clarified

    New regulations were issued on July 14, 2010, by The Department of Health and Human Services (HHS), the Department of Labor, and the Treasury regarding preventive care coverage requirements.  The HHS estimates that Americans currently use preventive services at about half of the recommended rate, due to the cost of these services.  According to the HHS, the intention of these regulations is to make preventive care more affordable, so that chronic diseases, which are often preventable, can be detected and treated or prevented early, thereby reducing healthcare costs and promoting health and wellness.

    Health plans that are not “grandfathered plan” will be required to include preventive care services beginning with plan years renewing after September 23, 2010, which would be January 1, 2011 for plans that renew each calendar year.  Grandfathered plans, which are plans that have not made certain substantial changes to plan design or costs will not have to meet this preventive care requirement.

    The covered preventive services would be available at no cost to the employee.  In other words, these services are not subject to a deductible, co-pay, or co-insurance, and would be covered 100% by the health plan, as long as they received services from an in-network provider.  Plans are still allowed to share the cost of preventive services provided by an out-of-network provider.

    Included in the preventive services are:

    • Screenings for diseases such as cancer, diabetes, high cholesterol, and high blood pressure
    • Vaccines for both children and adults
    • Pediatric care
    • Prevention for women including pregnancy related screenings and mammograms.

    For further information about the new preventive care rules, please visit www.healthcare.gov

    Ohio Mandating Electronic Child Support Payments

    The State of Ohio has passed legislation that requires employers with at least 50 employees to remit their payments electronically.  Prior to the legislation, large employers had the option of sending paper checks to the Ohio Child Support Payment Central processing center in Columbus.

    Ohio still encourages employers with less than 50 employees to also make child support payments electronically.  Electronic payments are more efficient and less costly for both employers and the State of Ohio.

    Employers have two options for remitting child support payments electronically:

    1) Online debit through www.ExpertPay.com
    This is a secure site that is free for employers to use.  Once an employer has registered as a user, they can initiate child support payments directly on this website.  The site offers reporting for previous payments.

    2) Electronic Funds Transfer
    You can send a special NACHA ACH credit file to your bank that contains details about the support payment, including employee and case information.  Check with your online payroll provider to see if this option is available.

    If you are on Ohio employer with at least 50 employees, and are currently remitting child support payments with a paper check, you will need to determine which of the two electronic methods will work best for your company.

    Earned Income Credit – What Is It and How Does It Work?

    NOTE: Effective January 1, 2011 the option for advanced EIC payments has been eliminated. Employers are not longer able to advance a portion of the credit with each paycheck.

    Earned Income Credit (EIC) can be referred to several ways, such as Earned Income Tax Credit (EITC) or Advanced Earned Income Credit (AEIC).

    What is EIC?
    EIC is a tax credit for certain individuals who don’t earn a high income and qualify for EIC.  They would receive the tax credit when they file their personal tax return.

    Annual EEO Reporting: Are You Ready?

    Private employers with over 100 employees or federal contractors with at least 50 employees are required each year to file the EEO-1 Report with the EEOC. Employers will report the demographic make-up of their workforce, which includes gender, ethnicity by job class. The annual reporting period starts every July, and employers must file their report no later than September 30th.

    If you are required to file, now is the time to make sure you have all of your employees properly classified by gender, ethnicity, and job class. It is recommended that employees self-identify their race/ethnicity, and can be part of the employee’s new hire paperwork. If this is not possible, employers are permitted to classify their employees’ race based on “visual observation,” but only if the employee’s answer is not available.

    The Race/Ethnicity categories are as follows:

    • Hispanic or Latino – A person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin regardless of race.
    • White (Not Hispanic or Latino) – A person having origins in any of the original peoples of Europe, the Middle East, or North Africa.
    • Black or African American (Not Hispanic or Latino) – A person having origins in any of the black racial groups of Africa.
    • Native Hawaiian or Other Pacific Islander (Not Hispanic or Latino) – A person having origins in any of the peoples of Hawaii, Guam, Samoa, or other Pacific Islands.
    • Asian (Not Hispanic or Latino) – A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian Subcontinent, including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam.
    • American Indian or Alaska Native (Not Hispanic or Latino) – A person having origins in any of the original peoples of North and South America (including Central America), and who maintain tribal affiliation or community attachment.
    • Two or More Races (Not Hispanic or Latino) – All persons who identify with more than one of the above five races.
    • Officials and Managers
    • Professionals
    • Technicians
    • Sales Workers
    • Administrative Support Workers
    • Craft Workers
    • Operatives
    • Laborers and Helpers
    • Service Workers

    What You Will Need To File
    If you have never filed an EEO-1 before, and are required to file, you will need to obtain a company Login ID and password to the EEOC’s website so that you can enter your demographic information and file online. You can email the Joint Reporting Committee to get set up.

    For each worksite location at your company, you will need to report the number of male and female employees within each race and job category that were employed during any payroll period between July and September. Below is a sample grid layout similar to the data entry page on the EEOC website.

    EEO Data Sample resized 600

    For more information about the EEO-1 filing process, visit the EEO-1 Survey Website.

    Unchanged 2011 HSA Contribution Limits

    The IRS recently announced that the contribution limits for Health Savings Accounts (HSAs) will not be changing for next year.  The IRS puts limits on four categories pertaining to HSAs:

    1. The amount of money someone can contribute to their HSA in a calendar year
    2. The catch-up amount for those age 55 and over (note this is a different age limit than 401k plans, which is age 50 and over)
    3. The minimum medical insurance plan deductible in order to qualify for an HSA
    4. The maximum out-of-pocket limit of the medical insurance plan

    Here are the 2010- 2011 HSA Contribution Limits:

    Single Contribution Limit to HSA        $3,050.00

    Family Contribution Limit to HSA        $6,150.00

    Catchup for age 55+                        $1,000.00

    Minimum Single HDHP Deductible         $1,200.00

    Minimum Family HDHP Deductible        $2,400.00

    Maximum Single HDHP OOP Limit        $5,950.00

    Maximum Family HDHP OOP Limit         $11,900.00

    New Reporting Requirements in Health Care Reform

    Possibly the most significant reporting change included in the health care reform bills for small businesses is the change in 1099 reporting, which bears no specific relationship to the health care insurance system, the primary focus of the bills.  The Patient Protection and Affordable Care Act (“PPACA”) includes a provision that expands the reporting requirements for reporting trade or business expenditures annually to the IRS.  The expenditures generally were reportable when they hit a $600 threshold for services rendered and generally were not reportable if the payments were made to a corporation.

    PPACA has expanded this reporting requirement in two ways.  First, it has extended the reportable payments to include those made to corporations (except those that are exempt under IRC Section 501(a)).  Second, it has expanded the types of payments that are reportable by including expenditures for property as well as services.

    Because of the increased scope of reportable expenditures, small businesses will likely find that they have a significantly larger number of 1099’s to file at year end.  Identifying these additional reportable payments, procuring the required information from the payees, and producing the Forms 1099 will assuredly create a heavier burden for the average small business.

    These provisions will go into effect for payments made during tax years beginning after December 31, 2011.

    Hire Act Forces IRS to Revise W-2/W-3 Forms, Instructions

    Due to the HIRE Act, the IRS has revised the forms and instructions for W-2, W-3, and W-3c. Below are some highlights of these changes:

    Form W-2 “Wage and Tax Statement”

    The actual format has not changed but they have added the code “CC” to be used in Box 12. There are a few things that employers need to keep in mind regarding what should be entered using this new code “CC”:

    Only wages paid to a “qualified” employee should be reported.

    Only use this code to report wages of employees on your payroll that are exempt from the employer’s portion of social security tax as a result of the HIRE Act.

    Report the exempt wages (not the tax).

    Include all exempt wages which includes both periods March 19-31,2010 AND April 1st, December 31, 2010.

    The amount of exempt wages can not exceed $106,800 (the social security wage limit for 2010).

    Form W-3Transmittal of Wage and Tax Statements”

    Instead of having a Box 12, the form now has a Box 12a and Box 12b.  What was reported in Box 12 before will now be entered in Box 12a “Deferred Compensation” (includes codes D-H, S, Y, AA & BB).  Box 12b “HIRE Exempt Wages and Tips” will be used to report the total exempt wages that were reported on all of the W-2 forms Box 12 labeled with “CC”.

    Form W-3c “Transmittal of Corrected Wage and Tax Statements

    Changes to this form are similar to the ones in Form W-3.  Basically, Box 12 has been replaced with Box 12a and Box 12b.  Box 12a will be used for the “Deferred Compensation” (includes D-H, S, Y, AA & BB).  Box 12b “HIRE exempt Wages and Tips” for reporting the HIRE exempt wages.

    The IRS has also updated the instructions for the 2010 Forms W2 & W3. The changes are found on page 11 where they have added instructions for the new code “CC”.

    Please stay tuned for further updates.

    Employer Provided Health Coverage Available for Children

    As a result of changes made by the recently enacted Patient Protection and Affordable Care Act, health coverage provided for an employee’s children under 27 years of age is now generally tax-free to the employee, effective March 30, 2010.  These changes immediately allow employers with Section 125 cafeteria plans to permit employees to begin making pre-tax contributions to pay for this expanded benefit.

    IRS Notice 2010-38 explains these changes and provides further guidance.

    This expanded health care tax benefit applies to employer-provided coverage and reimbursements including cafeteria plans, flexible spending arrangements (FSA), health reimbursement arrangements (HRA), voluntary employees’ beneficiary associations (VEBA) and self-employed individuals who qualify for the self-employed health insurance deduction pursuant to Code Sec. 162(l).

    Employees who have children who will not have reached age 27 by the end of the tax year are eligible for the new tax benefit from March 30, 2010, forward, if the children are already covered under the employer’s plan or are added to the employer’s plan at any time. For this purpose, a child includes a son, daughter, stepchild, adopted child or eligible foster child. The child does not have to be the taxpayer’s dependent for tax purposes pursuant to Code Sec. 152(a).

    The notice says that employers with cafeteria plans may permit employees to immediately make pre-tax salary reduction contributions to provide coverage for children under age 27, even if the cafeteria plan has not yet been amended to cover these individuals. Plan sponsors then have until the end of 2010 to amend their cafeteria plan language to incorporate this change.

    Follow this link for additional Information on other health care provisions.

    Send this to friend