Federal unemployment tax is calculated on the first $7,000 of each employee’s wages at the rate of 0.6%. The tax is deposited at the end of any quarter in which the total tax due is $500 or more.
For 2012, an additional tax of 0.3% will be levied on the same base amount of $7,000. This tax increase is due to the fact that Pennsylvania owes the federal government in excess of $3 billion in loans used to pay unemployment benefits. The additional 0.3% tax will be due by the Federal Form 940 deadline, which is January 31, 2013. If you choose, you may include the additional tax with any quarterly deposit. Please keep in mind that there may be yet another tax increase of 0.3% depending upon the status of unpaid federal loans.
Please contact Kay Smuck or Tammy Mearig at 717.239.5180 if you have questions.
As required by the United States Treasury Regulations, you should be aware that this communication (including any attachments unless expressly stated otherwise) is not intended by the sender to be used, and it cannot be used, for the purpose of avoiding penalties under the United States federal tax laws.
Wednesday, April 4, 2012
Monday, January 9, 2012
Business Compliance E-Alert sent on January 5, 2012
Federal Updates
Social Security Tax
Employee Social Security tax withholding will remain at 4.2% until February 29th. We will advise of any changes when they occur. Employer tax remains at 6.2%. Continue making Form 941 deposits using the same total tax calculation used in 2011.
Federal Income Tax
The Internal Revenue Service has not yet released Publication 15 for 2012. We will send an Alert as soon as it is available. For those of you using software, we will assume the software provider will automatically update. Until that time, continue to use the 2011 tax tables.
Federal Unemployment Tax (FUTA)
On Jan. 1, 2011 the Commonwealth marked the second consecutive year with an outstanding loan balance to the federal government, currently at $3.123 billion. This outstanding debt causes an automatic FUTA credit loss of .3 percent for payments relating to 2011 wages. Therefore, employers will see their FUTA tax liability go from .6% to .9% on January 1, 2012. An additional .3 percent in FUTA credit will be lost every year until the Commonwealth eliminates its outstanding debt to the federal government. It is not important that your software provider has not, as yet, updated this tax. The tax is not payable until April, so please give them time to make the correction. The additional FUTA tax for 2011 will be collected in January 2012 with the filing of your annual Form 940 tax return.
Social Security Tax
Employee Social Security tax withholding will remain at 4.2% until February 29th. We will advise of any changes when they occur. Employer tax remains at 6.2%. Continue making Form 941 deposits using the same total tax calculation used in 2011.
Federal Income Tax
The Internal Revenue Service has not yet released Publication 15 for 2012. We will send an Alert as soon as it is available. For those of you using software, we will assume the software provider will automatically update. Until that time, continue to use the 2011 tax tables.
Federal Unemployment Tax (FUTA)
On Jan. 1, 2011 the Commonwealth marked the second consecutive year with an outstanding loan balance to the federal government, currently at $3.123 billion. This outstanding debt causes an automatic FUTA credit loss of .3 percent for payments relating to 2011 wages. Therefore, employers will see their FUTA tax liability go from .6% to .9% on January 1, 2012. An additional .3 percent in FUTA credit will be lost every year until the Commonwealth eliminates its outstanding debt to the federal government. It is not important that your software provider has not, as yet, updated this tax. The tax is not payable until April, so please give them time to make the correction. The additional FUTA tax for 2011 will be collected in January 2012 with the filing of your annual Form 940 tax return.
Monday, August 8, 2011
Business Compliance EAlert
PA Unemployment Tax Returns Error
It has come to our attention that the paper format of Form UC-2, which was recently mailed to employers, may show an incorrect employer tax rate.
If filing paper returns, check that the employer contribution rate is the same as the rate used on the return filed for the 1st quarter of 2011, period end date March 31, 2011. If the rate is incorrect, change the rate on the 2nd quarter form and file as usual.
Although we believe the online rate should be accurate, you should check this rate for accuracy.
It has come to our attention that the paper format of Form UC-2, which was recently mailed to employers, may show an incorrect employer tax rate.
If filing paper returns, check that the employer contribution rate is the same as the rate used on the return filed for the 1st quarter of 2011, period end date March 31, 2011. If the rate is incorrect, change the rate on the 2nd quarter form and file as usual.
Although we believe the online rate should be accurate, you should check this rate for accuracy.
Monday, February 7, 2011
Groundhog Day: 10 Mistakes that Small Businesses Make Over and Over
A recent article on http://www.openforum.com/ written by Barry Moltz discussed 10 mistakes that small business make over and over.
Feb 02, 2011 - In the movie, Groundhog Day, Phil, played by actor Bill Murray, is forced to live the same day over and over again until he learns where he is making lifelong mistakes. Many small business owners are also doomed to make the same mistakes over and over and over again. Here are the top 10 mistakes that are repeated by small businesses and how they can be solved.
Feb 02, 2011 - In the movie, Groundhog Day, Phil, played by actor Bill Murray, is forced to live the same day over and over again until he learns where he is making lifelong mistakes. Many small business owners are also doomed to make the same mistakes over and over and over again. Here are the top 10 mistakes that are repeated by small businesses and how they can be solved.
- They focus on profits not cash.
- They don’t diligently collect the money that is owed by customers.
- Lack of focus on what your business does.
- Expanding too quickly by increasing fixed and overhead costs.
- Hiring the wrong people.
- Not firing employees quickly enough.
- Knowing when to quit.
- Not focusing on marketing and distribution.
- Failure to systematically do marketing even while they have “too much work."
- Not consistently seeking help.
Monday, January 17, 2011
National Labor Relations Board Issues New Labor Law Poster Requirements
In an effort to ensure that all employees of businesses covered by the National Labor Relations Act (NLRA) will be able to read about their rights to unionize, the National Labor Relations Board (NLRB) now requires a notice be displayed at all times in the workplace. The notice, among other things, states that employees have the right to: organize, form, join or assist a union to discuss wages, benefits, terms and conditions of employment or union organizing; take action with coworkers to improve working conditions by taking complaints to the employer, government agency or a union; and/or to strike or picket.
The NLRA applies to employees in most private-sector workplaces, including manufacturing plants, retail centers, private universities, and health care facilities. Agricultural workers and domestic workers were excluded in the original law and are not covered. Also exempted are supervisors and independent contractors. The organizing and collective bargaining rights of state and local government employees are determined by state laws enforced by individual state agencies.
Employers subject to the jurisdiction of the NLRB will be required to post the notice by November 14, 2011. The NLRB has mandated that the size of the poster will be at least 11 x 17 inches. The form may be downloaded from the NLRB website at www.nlrb.gov. The poster will be available beginning November 1, 2011. The notice must be posted wherever notices to employees regarding personnel rules and policies are customarily posted and are readily seen by employees, not simply where other legally mandated notices are posted.
Some very small establishments may not be subject to the posting requirement.
As required by the United States Treasury Regulations, you should be aware that this communication (including any attachments unless expressly stated otherwise) is not intended by the sender to be used, and it cannot be used, for the purpose of avoiding penalties under the United States federal tax laws.
The NLRA applies to employees in most private-sector workplaces, including manufacturing plants, retail centers, private universities, and health care facilities. Agricultural workers and domestic workers were excluded in the original law and are not covered. Also exempted are supervisors and independent contractors. The organizing and collective bargaining rights of state and local government employees are determined by state laws enforced by individual state agencies.
Employers subject to the jurisdiction of the NLRB will be required to post the notice by November 14, 2011. The NLRB has mandated that the size of the poster will be at least 11 x 17 inches. The form may be downloaded from the NLRB website at www.nlrb.gov. The poster will be available beginning November 1, 2011. The notice must be posted wherever notices to employees regarding personnel rules and policies are customarily posted and are readily seen by employees, not simply where other legally mandated notices are posted.
Some very small establishments may not be subject to the posting requirement.
As required by the United States Treasury Regulations, you should be aware that this communication (including any attachments unless expressly stated otherwise) is not intended by the sender to be used, and it cannot be used, for the purpose of avoiding penalties under the United States federal tax laws.
Monday, December 27, 2010
President Signs Taxcut Extensions into Law!
Congress has approved and President Obama has signed a multi-billion dollar tax cut package, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (2010 Tax Relief Act). The new law includes, among many other items, an extension of the Bush-era tax cuts for two years, estate tax relief, new incentives to invest in machinery and equipment, and a host of retroactive and extended tax breaks for individuals and businesses. The following are paramount in the legislation:- The current individual income tax rates will be retained for two years (2011 and 2012), with a top rate of 35% on ordinary income and 15% on qualified dividends and long-term capital gains.
- Employees and self-employed workers will receive a reduction of two percentage points in Social Security payroll tax in 2011, bringing the rate down from 6.2% to 4.2% for employees, and from 12.4% to 10.4% for the self-employed. Employers do not receive a reduction in Social Security payroll tax and are still responsible for paying 6.2% on behalf of employees.
- A two-year Alternative Minimum Tax (AMT) “patch” for 2010 and 2011 will keep the AMT exemption near current levels and allow personal credits to offset AMT. Without the patch, an estimated 21 million additional taxpayers would have owed AMT for 2010.
Monday, November 1, 2010
Extension of Electronic Filing Requirement
The Pennsylvania Department of Labor and Industry, Unemployment Tax Services has announced an extension of the electronic filing requirement for unemployment tax returns previously scheduled to start for reporting periods ending December 31, 2010. They now advise that implementation of the electronic filing requirement has been rescheduled to begin with the quarter ending March 31, 2011.
Beginning with the first quarter of 2011, paper forms will not be mailed to employers. This supports the efforts of the Unemployment Compensation Management System, or UCMS, to standardize the collection of wage data and employer contributions, increase employers’ self-service options, improve the accuracy of data, and make processing more efficient and less expensive to employers and the Commonwealth.
Kay Smuck
Beginning with the first quarter of 2011, paper forms will not be mailed to employers. This supports the efforts of the Unemployment Compensation Management System, or UCMS, to standardize the collection of wage data and employer contributions, increase employers’ self-service options, improve the accuracy of data, and make processing more efficient and less expensive to employers and the Commonwealth.
Kay Smuck
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