Affordable Care Act Information Reporting | Payroll get ready!

ACA health insurance reporting 8-6-2014_Page_1

Under the Affordable Care Act (ACA) and starting next year (for filing in 2016), large employers are required to provide information statements to employees and information returns to the IRS that contain details about employees’ health coverage benefits.

This new information reporting effort is substantial in scope and requires a coordinated effort between payroll departments, benefits enrollment and insurance plan administrators. On the other hand, the reporting infrastructure necessary to produce employee statements and IRS returns is similar to the annual filing of federal Forms W-2. Consequently, while payroll departments will be dependent on data from other internal and external systems to meet the reporting requirements, they will likely be integral in the compliance effort.

In this publication we explain the returns that will be required and the data they will contain.$FILE/EY-affordable-care-act-health-insurance-information-reporting-are-you-ready.pdf


August 20 – Learn about payroll tax onboarding and earn RCH or CPE credit

tape measure and hard hat

Ernst & Young LLP and the Institute for Professionals in Taxation (IPT) are pleased to present an affordable webcast on August 20, 2014 that explains the payroll tax considerations when hiring a new employee.

Participants are eligible for 1.0 RCH or CPE credits

Registration is available with IPT at:

IPT registration fee:

$50 for IPT members
$65 for individuals who personally do not hold IPT membership
Details concerning the program is included below.

So you hired an employee? Let’s talk employment tax
August 20, 2014: 1:00 –2:00 p.m. E.S.T.
Once a worker is hired a number of essential employment tax decisions and processes are triggered. Gaps in this critical component of the employment life cycle can present a personal risk to owners and officers and to the business as a whole. In this session we will provide participants with information about the critical tax steps in the employee onboarding process and shine an important light on where oversights and errors frequently occur.

Learning Objectives:

  •  Recognize the key differences between employees and independent contractors and how their onboarding requirements differ
  • Know the differences in the onboarding requirements for US and nonresident alien employees
  •  Identify the federal and state tax forms employees must submit and how to implement them
  • Know what steps to take to head off notices about invalid Social Security Numbers
  • Reduce employment tax risk through proactive identification of state and local taxing jurisdictions and compliance with their registration and tax filing requirements
  •  Avoid common employment tax pitfalls in employee hiring agreements that provide for fringe benefits such as cars, cell phones, sign on bonuses, relocation reimbursement, loans, etc.
  • Consider some leading practices in managing employment tax

Pennsylvania ends same-gender marriage ban – are you taxing benefits correctly?

On May 20, 2014, a US District Court judge overturned Pennsylvania’s 1996 ban on same-gender marriage ruling it unconstitutional. (Deb Whitewood, et al, vs. Michael Wolf, 1:13-cv-1861) Governor Tom Corbett chose not appeal the ruling making it the 18th state plus the District of Columbia that now allows the issuance of marriage licenses to same-gender couples. Pennsylvania has never recognized civil unions or registered domestic partnerships, and until now, was the only state in the northeast region that prohibited same-gender marriage.

The May 20th ruling ends a wave of legal challenges that began in September 2013. Guidance has not yet been issued by the Pennsylvania Department of Revenue; however, it is assumed that fringe benefits provided to a same-gender spouse will receive the same state and local tax treatment that was extended to a lawful spouse under prior law.

State and local taxation of same-gender partner benefits isn’t as easy as it seems. That’s because a state’s civil laws governing marriage do not necessarily govern the income tax and unemployment insurance coverage rules. Take Missouri for instance. The state prohibits marriage between a couple of the same gender; however, a same-gender couple lawfully married in another state is treated as married for Missouri income and unemployment insurance tax purposes.

Speak to a trusted employment tax advisor about the payroll tax treatment of same-gender partner benefits.

President’s budget would accelerate W-2 filing due dates


On March 4, 2014, the Administration’s Fiscal Year 2015 Budget was released to Congress, less than a     week after the House Ways and Means Committee published a discussion draft on proposed tax reforms.

From an employer’s perspective, the 2015 budget is very similar to previous years except for the noteworthy additions of an accelerated due date for filing information returns (e.g., Forms W-2 and 1099-MISC), provisions that further eliminate the filing of paper tax returns, and an expansion of income subject to the self-employment tax.

 January 31 deadline for filing Forms W-2 and 1099  

In 2011, as a response to the increase in tax refund scams, the IRS unveiled its vision for a “Real Time Tax System” where Forms W-2 and 1099 are available at the start of the tax filing season.   Under the current system, individual taxpayers receive their information statements on January 31, but information returns aren’t due until as late as March 31. This filing regime forces the IRS to use a look back method for matching Forms W-2 to individual tax returns.

Throughout 2012, the IRS solicited commentary from stakeholders about the feasibility of accelerating the filing deadline for information returns to January 31.   Business groups, such as the National Payroll Reporting Consortium (NPRC) identified numerous challenges businesses would face in meeting this earlier fling deadline, including the likely increase in Forms W-2c because of eliminating the essential gap between when employees receive their information statements and when information returns are filed.

The 2015 budget proposal is the first since 2011 that the administration makes a formal proposal to change the due date for filing information returns. Specifically, Forms W-2 would be due to the Social Security Administration and Forms 1099 to the IRS no later January 31, whether filed on paper on electronically.

At the same time, it is also proposed that the Treasury and IRS be given latitude to lower the 250-return threshold at which electronic filing is mandatory.

For other budget provisions potentially affecting employers, click here

Additional Medicare Tax: 6 facts employers need to know

6 key factsApril 15 is just around the corner and employees are certain to raise numerous questions about the Additional Medicare Tax that first took effect in 2013.   Here’s 6 facts you will need at your finger tips in the weeks ahead.

For the complete article go to:


Happy 2014! Watch This Payroll 2013 Flashback

Happy new year to payroll professionals all over the world!

Principles of Payroll Administration Blog

Happy New Year

Payroll had alot to accomplish in 2013, and you deserve a round of applause!

Watch the Payroll 2013 Flashback

To read up on what you may have missed go to:—Year-end-planning-highlights

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