Contacting Your Senator

On today’s blog I wrote about contacting your Senator to encourage them to vote for the Tax Simplification Bill.  I am getting some questions on how to you contact them. Here is the link.

You can only write to the Senators that are from your own state.  But it sure will help with getting attention for the bill.

Payroll needs to be pro-active when bills are pending that affect our profession so please contact your Senators today!

Also, if your company has a number of multistate employees and this is a big issue with the company itself, perhaps the company could write a letter or contact the Senators.  Businesses backing this bill will be helpful to get it passed.

 

Update on Multistate Taxation Legislation–Passed the House Again! But Needs Your Help

In our blog on March 9th of this year we discussed the latest attempt (the last one was 2012) to simplify taxation for multistate employees.  Those are employees who live in one state and work in other states. Many of these employees work in the state for only a few days or weeks out of the calendar tax year, yet employers must withhold taxes for these states and the employees must file, in most cases, income tax returns.  To try to alleviate this burden on employers ( the tracking requirements for payroll departments can be massive) the Mobile Workforce State Income Tax Simplification Act of 2015 (H.R. 2315 ) was introduced.  A major push by payroll professionals and the American Payroll Association was begun. I, myself, wrote letters to the Nevada congress members and Senators asking for the bill to be passed as well as asked my blog followers to do the same.  Well the hard work so far is paying off.  The House of Representatives passed the bill on September 21st and it is now in the hands of the Senate.  It appears to be a bi-partisan bill with co-sponsors from both sides of the aisle. However, a similar bill was passed in 2012 but was not considered by the Senate before they adjourned the session so this may be the case this year.  It is opposed by New York state and similarly situation states that will lose a lot of revenue from nonresidents if the bill is passed. Let’s keep our fingers crossed.  However, writing to your Senators might help push this along. If every payroll professional who has had to deal with tracking, withholding and paying multistate employees would write a letter to their own Senators imagine how flooded the Senate mail office would be! So write, phone or email your Senators today!

The Overtime Battle Rages On!

The battle to stop the new overtime rules from taking effect has begun in earnest. 21 states, including Arizona, Kansas, Oklahoma, Nevada, Texas and Utah, and the U.S. Chamber of Commerce have filed a lawsuit in Texas challenging the Department of Labor’s (DOL) final overtime rules under the Tenth Amendment of the U.S. Constitution and the Administrative Procedures AFlag of Nevada (isolated)ct.   Nevada Attorney General Adam Paul Laxalt led the coalition of states filing the suit. According to the suit the final rule contradicts the statutory text of the exemption, as well as Congressional intent.  The suit also raises the specter of the federal executive depleting state budgets in an effort to impose its policy will on the states.

However the DOL has responded by issuing the following statement by Secretary Tom Perez:  “We are confident in the legality of all aspects of our final overtime rule. It is the result of perez2a comprehensive, inclusive rule-making process. Despite the sound legal and policy footing on which the rule is constructed, the same interests that have stood in the way of middle-class Americans getting paid when they work extra are continuing their obstructionist tactics. Partisan lawsuits filed today by 21 states and the U.S. Chamber of Commerce seek to prevent the Obama administration from making sure a long day’s work is rewarded with fair pay. The overtime rule is designed to restore the intent of the Fair Labor Standards Act, the crown jewel of worker protections in the United States. The crown jewel has lost its luster over the years: in 1975, 62 percent of full time salaried workers had overtime protections based on their pay; today, just 7 percent have those protections – meaning that too few people are getting the overtime that the Fair Labor Standards Act intended. I look forward to vigorously defending our efforts to give more hardworking people a meaningful chance to get by.”

Let’s see where the battle takes us by December 1!

sale-red-keyATTENTION BLOG FOLLOWERS!: To reward my blog followers I am offering a special discount on a year’s subscription to The Payroll Pause.  Only $99 per year (rate lasts as long as you keep your subscription current).  That is a $50 savings!  But act fast as this discount is just for the fall and will expire on October 15th.  Use coupon code X36AK67F3 when checking out to receive the discount.

IRS Begins Private Debt Collection in Spring 2017

The Internal Revenue Service announced today that it plans to begin private collection of certain overdue federal tax debts next spring and has selected four contractors to implement the new program. The new program, authorized under a federal law enacted by Congress last December, enables these designated contractors to collect, on the government’s behalf, outstanding inactive tax receivables. As a condition of receiving a contract, these agencies must respect taxpayer rights including, among other things, abiding by the consumer protection provisions of the Fair Debt Collection Practices Act. The IRS has selected the following contractors to carry out this program:

CBE Group 1309 Technology Pkwy Cedar Falls, IA 50613

Conserve 200 CrossKeys Office park Fairport, NY 14450

Performant 333 N Canyons Pkwy Livermore, CA 94551

Pioneer 325 Daniel Zenker Dr Horseheads, NY 14845

These private collection agencies will work on accounts where taxpayers owe money, but the IRS is no longer actively working their accounts. Several factors contribute to the IRS assigning these accounts to private collection agencies, including older, overdue tax accounts or lack of resources preventing the IRS from working the cases. The IRS will give each taxpayer and their representative written notice that their account is being transferred to a private collection agency. The agency will then send a second, separate letter to the taxpayer and their representative confirming this transfer. Private collection agencies will be able to identify themselves as contractors of the IRS collecting taxes. Employees of these collection agencies must follow the provisions of the Fair Debt Collection Practices Act and must be courteous and respect taxpayer rights.

sale-red-keyATTENTION BLOG FOLLOWERS!: To reward my blog followers I am offering a special discount on a year’s subscription to The Payroll Pause.  Only $99 per year (rate lasts as long as you keep your subscription current).  That is a $50 savings!  But act fast as this discount is just for the fall and will expire on October 15th.  Use coupon code X36AK67F3 when checking out to receive the discount.

New Tax Fraud Scheme

You need to warn your fellow employees and customers that the IRS has announced a new tax fraud scheme.  This time it involved fraudulent Affordable Care Act notices being emailed to individual taxpayers. The IRS has received numerous reports around the country of scammers sending a fraudulent version of CP2000 notices for tax year 2015. Generally, the scam involves an email that includes the fake CP2000 as an attachment.

The CP2000 is a notice commonly mailed to taxpayers through the United States Postal Service. It is never sent as part of an email to taxpayers. The indicators are:

  • These notices are being sent electronically, even though the IRS does not initiate contact with taxpayers by email or through social media platforms;
  • The CP 2000 notices appear to be issued from an Austin, Texas, address;
  • The underreported issue is related to the Affordable Care Act (ACA) requesting information regarding 2014 coverage;
  • The payment voucher lists the letter number as 105C.
Open hand raised, Stop Fraud sign painted
Open hand raised, Stop Fraud sign painted

 

White Paper for the Month: Educational Assistance

My white paper for September is on educational assistance.  How to properly track and tax this benefit is paramount to ensure compliance.  Hope you find it useful.

white-paper-educational-assistance-2016

Beginning in October we will go back to more frequent white papers.  We do them monthly during the summer as it is usually a slow time of the year for payroll and we all want to enjoy the summer off.  But as year end begins to approach we will be focusing our white papers on preparing for it.

Speaking of year end…don’t get left out in the cold when it comes to critical year end news updates. Subscribe to The Payroll Pause today. Get all the latest payroll news as it is released, including wage bases, rates, and annual updates for the low price of only $149 per year.  This type of news update service usually costs payroll departments $500 or more per year.  But payroll news should not be out of the reach of all payroll professionals.

sale-red-key

 

ATTENTION BLOG FOLLOWERS!: To reward my blog followers I am offering a special discount on a year’s subscription to The Payroll Pause.  Only $99 per year (rate lasts as long as you keep your subscription current).  That is a $50 savings!  But act fast as this discount is just for the fall and will expire on October 15th.  Use coupon code X36AK67F3 when checking out to receive the discount.

PA Child Support Changes–More Problems for Payroll

Pennsylvania has recently passed legislation on collecting fees for withholding child support payments. Normally this is good news for payroll. However, the PA legislature has really gone out of its way to make it tough for payroll to enforce the new rules.  If I can get on my soap box for one moment, this is the reason I dread state legislatures getting involved in enacting legislation that is payroll related before check with payroll professionals, which they never do! This legislation, in fact,  could cause “nightmares” for payroll systems as it goes against the norm for collecting such fees.  Basically it boils down to this, which was distributed by the Office of Child Support Enforcement (OCSE):

On July 1, 2016 Governor Tom Wolf signed Act 64, which amends Section 4348(j) of Title 23 of the Pennsylvania Consolidated Statutes. Section 4348(j) permits employers to charge their employees an administrative fee for withholding income for support.  Employers were previously permitted to deduct up to two percent of the ordered amount per pay period as reimbursement for administrative costs related to withholding support. Effective August 30, 2016, employers may deduct a one-time fee of $50 for reimbursement of expenses related to withholding income for support. The two-percent fee is no longer permitted. There are no other changes to the law. Pennsylvania’s income withholding requirements stipulate that administrative fees cannot be deducted from the withholding amount and that Consumer Credit Protection Act (CCPA) limitations apply to amounts withheld from the obligor’s income.

The Pennsylvania Bureau of Child Support Enforcement is providing the Frequently Asked Questions below to address concerns related to the implementation of the new fee. Additional questions regarding the implementation of Act 64 should be directed to the Pennsylvania State Collection and Disbursement Unit at 1-877-676-9580. 

Frequently Asked Questions:

 1. Can employers assess the fee on subsequent orders?

Answer: The one-time $50 fee applies to each employee, not each order. Therefore, employers may only collect up to $50 in administrative fees for the duration of the individual’s employment, regardless of the number of income attachments received for the employee.

2. How should employers handle employees who left employment and were subsequently rehired? When can the fee be reassessed?

Answer: The $50 one-time fee limitation applies for the duration of the individual’s employment. Seasonal, transient, and other typically low-income employees will be adversely affected by Act 64 if each subsequent rehire with the same company is regarded as a new eligibility period for the $50 one-time fee. Therefore, rehired individuals are only eligible for a new $50 fee when their start date is greater than one year from their previous leave date.

3. What should employers do if they are unable to update their payroll system before the August 30, 2016 effective date?

Answer: Employers may withhold the one-time $50 fee at any time during the income attached employee’s tenure with the company. Employers who are unable to update their payroll systems before August 30, 2016 may elect to withhold the fee after their system updates are complete. Employers may not continue to withhold a percentage fee until they are able to take the $50 one-time fee.

So payroll can only deduct a one-time fee per employee no matter how many income withholding orders are received for that employee.  PA child support has also provided additional clarification after releasing the above information.  One addresses the issue of insufficient funds.  If there are not enough funds to take the entire fee in one pay period, can it be pro-rated and taken over multiple periods?  PA Child Support says yes, the employer may deduct the fee over multiple periods if there are insufficient funds to deduct in a single payment.

There are still a lot of unanswered questions for payroll.  I will keep you posted on any further changes to the PA child support situation as they come in.