Social Security and Medicare for 2012 – The total withholding for social security continues at 4.2% until February 29, 2012, but remains at 6.20% for the employer match and the wage base for 2012 increased to at $110,100 for OASDI portion.  We expect Congress to announce whether or not Social Security withholding will continue to be 4.2% before February ends.   Medicare withholding remains the same at 1.45% and the employer share is the same at 1.45% of gross wages.

Federal and State Wage Base for Unemployment Insurance – The federal wage base for unemployment insurance continues at $7,000 for 2012 with the effective tax rate of .6% however when completing Form 940, NYS employers must pay an additional .3% on all base wages paid for 2011.  NYS wage base continues at $8,500. 

Plan to track Health Insurance costs per employee during 2012.  This amount will need to be reported on the employee’s Form W-2 for 2012.

Continue to use the Electronic Federal Tax Payment System (EFTPS) to make all required payments to IRS.  Paper coupons (Form 8109) are no longer accepted by the local banks.

IRS has on its website the withholding tables for wages after December 31, 2010 at this time (the old Publication 15) which will probably be updated some time during early 2012.   NYS issued a new withholding booklet for wages paid after December 31, 2011.

Minimum Wage for 2012 – The minimum wage continues at $7.25 per hour for all wages paid in NYS.

New Hire Reporting - You have 20 days to notify NYS of newly hired employees.  You can do this online at www.nynewhire.com if you register to do so.  Otherwise, you can fax in a copy of Form IT-2104 – the NYS version of Federal Form W-4 to NYS using the fax number as indicated on Page 4.

New Form LS 56 – For all employees you must have a completed Form LS 56(or LS 57-59 depending on type of employee) by February 1, 2012, Notice and Acknowledgement of Wage Rate and Designated Payday Hourly plus Overtime.  A copy must also be provided to the employee.  This form, along with a completed copy of Form W-4 and I-9 should be retained in the employee’s file by the employer.  A copy of Form LS 56 can be obtained at www.labor.state.ny.us. (Labor Law 195(1))

Form 1099 –  1099 penalties of $250 will be enforced during 2012 for failure to file required 1099’s.   Again, we stress that if you do not have a social security number or a federal identification number for a potential 1099, pay the recipient only 78% of any payments that may be due them and send a letter requesting that they provide you with the proper identification number by completing the enclosed Form W-9.  Go to www.irs.gov to get the complete details regarding backup withholding. 

New York State Forms – As you are probably aware, NYS continues to try to be paperless.  Form NYS-1 coupons for NYS tax withholding will not be provided to employers this year.  These forms can be obtained on line or electronically filed using the NYS OnLine Center.  NYS is encouraging that all employers utilize the Center for filing purposes.

Correcting previously filed Form 941’s – Use Form 941X to report corrected information on previously filed Form 941.  Go to www.irs.gov  (use W-2C and W-3C to correct previously filed W-2’s).

Payment of Withholding Taxes

Federal Payment Requirements:

IRS has notified you during the fourth quarter of 2011 of your depository status for 2012.  This status is determined by your history of total withholding liability for the period 07/01/10 through 06/30/11.  If that total is more than $50,000, you are required to make semi-weekly deposits. If your accumulated liability is over $2,500, you must make monthly deposits.  The computation of liability remains the same:

Liability = (OASDI W/H @ 4.2%) + (ER Match @ 6.2%) + (Medicare W/H X 2) + Federal W/H
or 13.30% of GROSS + Federal W/H

Payment of payroll tax liability is determined by the following:

New York State Payment Requirements:

Liability is computed based on actual total withholding of New York State tax and is summarized as follows:

If at the end of a quarter, the withholding liability is under $700 and a payment has been made during the quarter, a payment of the balance should be made prior to the last day of the month following the end of the quarter --OR-- it may be paid with the quarterly report.

Quarterly Reporting Requirements
(Due the last day of January, April, July and October)

FEDERAL WITHHOLDING TAXES - FORM 941

Form 941, "Employer's Quarterly Federal Tax Return", must be filed showing the breakdown of tax liabilities for the quarter.  If the total undeposited tax exceeds $2,500, a deposit must be made with EFTPS by the 15th day of the month following.  If the total undeposited tax is less than $2,500, it may be paid with form.

FEDERAL UNEMPLOYMENT INSURANCE TAX – FORM 940

Deposit Federal Unemployment Insurance (FUTA Tax) computed on a quarterly basis at the net rate of 0.6% of the first $7,000 in gross wages paid per employee per calendar year, plus an additional assessment if NYS does not pay back federal loans.  (For 2011 it was + .3%).   No deposit is required for any quarter in which the liability plus the accumulated liability for the previous quarters is less than $500 (except for fourth quarter).  You must make your deposit using EFTPS if over $500.

NYS COMBINED WITHHOLDING & UNEMPLOYMENT - FORM NYS-45 AND NYS-45-ATT

New York State continues to use Form NYS-45, "Quarterly Combined Withholding Wage Reporting and Unemployment Insurance Report" to report quarterly liability for unemployment insurance along with reconciling NYS withholding for the quarter.  This report is due the last day of the month following the end of a quarter.

FORM NYS-45-ATT

This form is to be used when there are six or more employees.  For fourth quarter only, this form must be filed showing only annual gross wages and withholdings.  This form is the “NYS W-2.”

Annual Reporting Requirements

FORM 944 –This is the annual form that enables small businesses that have less than $1,000 in payroll taxes due for the entire year file only once.  Payment of tax is made with the form on an annual basis due January 31st of the year after the payroll liability is incurred.  Note:  IRS will advise if you are a 944 filer, but if your liability increases, you must still make monthly payments using the $2,500 rule.

FORM 940 –This is the ANNUAL Federal Unemployment Insurance Tax form for employers, which reconciles all payments made for the year to quarterly liabilities.  The balance, if under $500, may be paid with the form otherwise make deposit with EFTPS.

FORM W-2 –Wage statements must be completed and distributed to employees on or before January 31, 2012.  Form W-2 for 2011 has remained the same as 2010.  Please review the instructions before completion.  USE forms W-2C and W-3C to correct previously filed W-2’s and W-3.

FORM W-3 –his is a transmittal and reconciliation schedule to accompany the Forms W-2. Form W-3, together with W-2's are to be mailed by February 29, 2012 to Social Security Administration, Data Operations Center, Wilkes-Barre, PA  18769-0001..

FORM 1099 –"Federal Information Return for the Calendar Year 2011".  On or before February 29, 2011, Form 1099 must be filed with IRS for each individual or partnership to whom you made payment in 2011, to the extent not reported on Form W-2.  You must provide the recipient with a copy of Form 1099 on or before January 31, 2012.  You must file a 1099-Misc when you pay $600 or more for services and you must report all payments to attorneys over $600 regardless of type of entity on the 1099-Misc Form.

FORM 1096 –A separate transmittal Form 1096 must be filed with each type of Form 1099.  By February 29, 2012, mail Form 1096 with original copies of Forms 1099 to Internal Revenue Service Center, Austin, TX 73301.

We recommend that all forms be mailed Certified Mail Return Receipt.

This payroll and 1099 requirement letter has been prepared as a guide and does not attempt to take the place of any of the publications provided to you by the various taxing authorities.

If you do not receive the forms from the taxing agencies, you should contact those agencies and request the missing forms be mailed to you as soon as possible. Telephone numbers of the various agencies are:

Internal Revenue Service - Information 1-800-TAX-1040 (829-1040)

Internal Revenue Service - Small Business 1-800-829-4933

Internal Revenue Service - Forms and Publications 1-800-TAX-FORM (829-3676)

IRS - Information on Electronic Filing (EFTPS) 1-800-555-4477

 

Federal Fair Labor Standards 1-315-448-0630

Social Security Administration 1-800-772-1213
     

NYS Dept of Tax & Fin – Taxpayer Assistance Call Center 1-518-457-5342

NYS Dept of Tax & Fin – Sales Tax Assistance 1-518-485-2889

NYS Dept of Tax & Fin – T/P Assist Call Ctr - Forms Only 1-518-457-5431

NYS Fair Labor Standards – Binghamton 1-607-721-8014

NYS Fair Labor Standards – Syracuse 1-315-735-6198

NYS Labor Dept.- Unemployment Insurance-Information 1-888-899-8810

NYS Dept of State 1-212-417-5800

NYS Dept of State - Division of Corporations 1-518-473-2492

NYS Disability Benefits Bureau 1-800-353-3092

NYS Workmen’s Compensation Board 1-866-750-5157

NYS New Hire Notification  -   FAX # - 1-518-320-1080

Most forms and publications can be downloaded off the internet by going to the websites as shown below.

Internal Revenue Service www.irs.gov

IRS: Forms and Publications www.irs.gov/formspubs/index.html

IRS: Business Tax Information www.irs.gov/businesses/index.html

IRS: Efile www.irs.gov/efile/index.html

 

Federal Dept of Labor www.dol.gov

Social Security Administration www.ssa.gov

US Citizenship and Immigration Services www.uscis.gov

 

New York State www.tax.state.ny.us

NYS: Forms www.tax.state.ny.us/forms/

NYS Dept of State www.dos.state.ny.us

NYS Dept of Labor www.labor.state.ny.us

 

NYS New Hire Online www.nynewhire.com/