Mary Lou Sipple is a Payroll Consultant at NGA Human Resources, a leading provider of global HR services, technology and consulting. She is a Certified Payroll Professional with more than 25 years of experience implementing human resource and payroll systems with multiple vendors across a wide range of industries. She has a BBA degree from Loyola University Chicago and an MBA from Dominican University.
There are always tax changes in a new year in the US and 2016 has been no different. So, what’s new?
Here are some of the payroll tax changes for this year
New filing date for 2016 Forms W-2 W-3, and 1099- MISC
Both paper and electronically filed 2016 Forms W-2 and W-3 must be filed with the Social Security Administration (SSA) by 31 January 2017. Both paper and electronically filed 2016 Form 1099-MISC must be filed with the IRS by 31 January 2017.Work opportunity tax credit extended for qualified taxexempt organizations hiring qualified veterans
The work opportunity tax credit is now available for eligible unemployed veterans who begin work after 31 December 2014 and before 1 January 2020. Qualified tax-exempt organisations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C.Retroactive increase in excludible transit benefits for 2015
The monthly transit benefit exclusion retroactively increased from $130 USD to $250 USD for the period of 1 January 2015 to 31 December 2015. Instructions on the IRS website provide guidance on how to correct Social Security and Medicare taxes on the excess transit benefits.Qualified parking exclusion and commuter transportation benefit
The monthly exclusion for qualified parking, commuter highway vehicle transportation and transit passes is $255 USD for the 2016 calendar year.
ACA Reporting – extension of 2016 due dates
Employers subject to the Affordable Care Act’s 2015 information reporting requirements were given extra time to give these forms to employees and file them with the government.
In Notice 2016-4, issued by the IRS on 28 December, the agency extended the information reporting due dates.
On 28 December, in Notice 2016-04, the Internal Revenue Service (IRS) extended the information reporting due dates for insurers, self-insuring employers, other health coverage providers and applicable large employers.Truncated taxpayer identification numbers
The IRS has issued regulations that allow a payee’s identification number to be truncated on statements. The regulations allow the first five digits of the nine-digit number to be replaced with asterisks (*) or X’s. Examples of a payee include a beneficiary, borrower, debtor, insurer, policyholder, recipient, shareholder, student or transferor. The truncated taxpayer identification number rules do not apply to Form W-2.Federal tax treatment of identity protection services
The value of the identity protections services that have been provided to an individual who has had their personal information compromised in a data breach are excluded from the gross income or wages of that individual.
These are just a few of the new tax exclusions and filing requirements for both employees and employers in 2016. Additional detailed information and guidance on any of the payroll tax changes can be found on the IRS website.
Mary Lou Sipple is a Payroll Consultant at NGA Human Resources, a leading provider of global HR services, technology and consulting. She is a Certified Payroll Professional with more than 25 years of experience implementing human resource and payroll systems with multiple vendors across a wide range of industries. She has a BBA degree from Loyola University Chicago and an MBA from Dominican University.
There are always tax changes in a new year in the US and 2016 has been no different. So, what’s new?
Here are some of the payroll tax changes for this year
New filing date for 2016 Forms W-2 W-3, and 1099- MISC
Both paper and electronically filed 2016 Forms W-2 and W-3 must be filed with the Social Security Administration (SSA) by 31 January 2017. Both paper and electronically filed 2016 Form 1099-MISC must be filed with the IRS by 31 January 2017.Work opportunity tax credit extended for qualified taxexempt organizations hiring qualified veterans
The work opportunity tax credit is now available for eligible unemployed veterans who begin work after 31 December 2014 and before 1 January 2020. Qualified tax-exempt organisations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C.Retroactive increase in excludible transit benefits for 2015
The monthly transit benefit exclusion retroactively increased from $130 USD to $250 USD for the period of 1 January 2015 to 31 December 2015. Instructions on the IRS website provide guidance on how to correct Social Security and Medicare taxes on the excess transit benefits.Qualified parking exclusion and commuter transportation benefit
The monthly exclusion for qualified parking, commuter highway vehicle transportation and transit passes is $255 USD for the 2016 calendar year.
ACA Reporting – extension of 2016 due dates
Employers subject to the Affordable Care Act’s 2015 information reporting requirements were given extra time to give these forms to employees and file them with the government.
In Notice 2016-4, issued by the IRS on 28 December, the agency extended the information reporting due dates.
On 28 December, in Notice 2016-04, the Internal Revenue Service (IRS) extended the information reporting due dates for insurers, self-insuring employers, other health coverage providers and applicable large employers.Truncated taxpayer identification numbers
The IRS has issued regulations that allow a payee’s identification number to be truncated on statements. The regulations allow the first five digits of the nine-digit number to be replaced with asterisks (*) or X’s. Examples of a payee include a beneficiary, borrower, debtor, insurer, policyholder, recipient, shareholder, student or transferor. The truncated taxpayer identification number rules do not apply to Form W-2.Federal tax treatment of identity protection services
The value of the identity protections services that have been provided to an individual who has had their personal information compromised in a data breach are excluded from the gross income or wages of that individual.
These are just a few of the new tax exclusions and filing requirements for both employees and employers in 2016. Additional detailed information and guidance on any of the payroll tax changes can be found on the IRS website.
