Ascentis Blog

Information to help HR and payroll managers, recruiters, and compliance officers become more effective.

Tag Archives: payroll

State Taxation of Benefit Coverage for Adult Children

The tax treatment of the value of benefit coverage for adult children varies by state. The states listed below have recently provided guidance or clarification on this issue. If you have employees with health care coverage for adult children in any of the states listed below, you should make sure that your payroll system is handling the taxation correctly.

California: The Franchise Tax Board confirmed that the value of health coverage for adult children is considered state taxable income to the employee and should be included in Box 16 of Form W-2.

Maine: The governor signed legislation conforming to the Internal Revenue Code (IRC) effective December 31, 2010, thereby adopting conformity to the federal tax treatment and excluding the benefit value from state taxable income.

Mississippi: The Department of Revenue explained that although no guidance has been published, the state will conform to the federal tax treatment and exclude the benefit value from state taxable income.

Pennsylvania: The state conforms to the current IRC and therefore excludes the benefit value from state taxable income.

Virginia: The Department of Taxation determined that until this issue is addressed by the General Assembly, the state will conform to the federal tax treatment and exclude the benefit value from state taxable income.

West Virginia: The State Tax Department explained that the state will conform to the federal tax treatment and exclude the benefit value from state taxable income.

Stay informed about the latest in HR and payroll news, trends, best practices and evolving legislation. Sign up for the monthly Ascentis HR, Benefits and Payroll News.

IRS Announces 2011 Standard Mileage Rates

IRS Standard Mileage Rates 2011

The Internal Revenue Service has announced the 2011 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are:

  • 51 cents per mile for business miles driven
  • 19 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously. The IRS is requesting public comments on whether taxpayers should be allowed to use the business standard mileage rate in this circumstance.

Other Changes Regarding Standard Mileage Rates in 2011

Beginning in 2011, a taxpayer may use the business standard mileage rate for vehicles used for hire, such as taxicabs.

Also beginning in 2011, the standard mileage rates are announced in a separate notice, which also provides the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate and the maximum standard automobile cost for automobiles under a fixed and variable rate (FAVR) allowance. The IRS plans to discontinue publishing the standard mileage rate revenue procedure annually but will publish modifications as required.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

For Additional Information

Revenue Procedure 2010-51 and Notice 2010-88 contain additional details regarding the standard mileage rates.

Stay informed about the latest in HR and payroll news, trends, best practices and evolving legislation. Sign up for the monthly Ascentis HR, Benefits and Payroll News.

Tools to Make Your Job Easier

Is this how you feel close to EOY?

Payroll Managers, I wouldn’t change jobs with you for anything. I’m a writer – and a marketer – and that comes easy for me. It’s naturally a part of who am I and what I do. And though there are a lot of “tools” that I use to get my job done, none of it really impacts my company’s business like a Payroll Manager’s job does. My hat is off to you.

Why do I say this? Well, as I sit through this morning’s Ascentis EOY Payroll Webinar, put on by our professional service team, I’m blown away by the complexity of your job function. There is so much to know, so much to do – and all of it is critical in maintaining your company’s business.

There are so many advantages to using payroll software (as well as HRIS and/or Time and Attendance) that make payroll and HR jobs much more manageable – wizard driven reports, auditing, and so on and so forth. Listening in on this webinar I heard our professional services team teach how clients using specific components of our software can make EOY processes easier. From Hire Act Credit reporting, to quarter end tax filing, to showing off the W-2 wizard, our team covered a lot of EOY ground in two hours, and in the end made a lot of those watching relax.

It pleased me to no end to hear our client partners comments on how thankful they were that these options were available to them in Ascentis software – and how incredibly impressed they were to work with a company that just didn’t hand them a software contract and walk away.  And if you don’t know that about Ascentis by now, you should. We do more than sell  you a product- we build a relationship. We support our software - but more so, we support your use of it – every step of the way, and your success because of it is important to us as well.

Yes, Payroll managers have a very difficult job – and this time of year makes it more so. But remember, Ascentis is here to help – we’ve got four more webinars this month – and if you haven’t signed up for one yet – reserve your space now (it’s limited). We’d love to do whatever we can to help you through one of the roughest parts of your year.

So register today for one of the next four Managing Year-End webinars and learn some stress-reducing tips and best practices that will make your job easier. Among other issues, we’ll discuss:

  • Reviewing and signing-off on W-2s
  • Completing turnaround
  • Upcoming changes in limits and payroll-related laws in 2011
  • Common year-end procedures and best practices
  • And much more!

Give yourself some peace of mind and don’t miss this opportunity to learn exactly what you need to know for a successful, accurate and on-time year-end process. This webinar will be offered four more times in November and December — just choose the date most convenient for you (all webinars are held from 10am to noon, PST). Click on a date to register:

If you want to know more about Ascentis Payroll, or any of our products and services,  prior to the webinar dates listed above, just give us a call at 800-229-2713 or email us at any time. We’re happy to be here for you.

Health Plan Reporting Reprieve for Tax Year 2011

Good news employers, there is no need to rush the implementation of the Health Care Cost Reporting which was set to be required starting this January, 2011.  Just a few days ago, the IRS issued notice 2010-69 offering “interim relief with respect to form W-2 reporting of the cost of coverage of group health insurance under § 6051(a)(14).

As many HR and Payroll managers have been aware, the Section 6051(a)(14) was added to the Code by § 9002 of the Patient Protection and Affordable Care Act of 2010, Public Law 111-148, enacted March 23, 2010. Section 6051(a)(14) provides that the total cost of applicable employer sponsored coverage (as defined in § 4980I(d)(1)) must be reported on Form W-2 in January, 2011.

This meant that you were required to begin reporting (for tax year 2011) on employees W-2’s the applicable employer-sponsored coverage.   For the purposes of this reporting, it does not matter who pays for the coverage (whether a percentage or in total), it is the total COST of the coverage that must be disclosed and reported.

There are a few exclusions to the reporting rule, however, including:

  • Long term disability insurance
  • Coverage for a specific illness
  • Hospital indemnity or fixed indemnity insurance
  • Salary reductions contributions to a flexible spending account (FSA) under a cafeteria plan.

This requirement was originally effective for tax year 2011 and forward. However, the IRS decided that relief from 2011 requirement was needed in order to allow employers additional time to make any essential changes to their payroll systems preparation for compliance with the reporting requirement. However, the IRS has made reporting optional for the 2011 tax year, so employers are not required to include this information on W-2 Forms issued for 2011.

Despite the reporting reprieve, there are some compliance related issues that employers should really start paying attention to immediately:

  • Make sure that your payroll manager or staff is gathering this information now ahead of time for the mandatory 2012 reporting.
  • Document what coverage was provided to each employee and have the calculation of that total cost documented for each employee.
  • Employers may be asked to address questions from employees about this reporting requirement for this tax year as well as next year. Using an employee self service (ESS) feature of an HRIS system (if you have one) will help in getting this information out to your employees. However, if you don’t have employee self service in your HRIS, sending out a memo assuring your employees that the information that will show up on their W-2’s in 2012 (and not in 2011) is intended to simply to show them the total value of their health care benefits, and does affect their tax liability.

If you are an Ascentis Payroll customer, this reprieve allows you some time to start gathering the information required for this reporting feature. If you have not done so already, call your account manager at (916) 624-6160 to talk about how we can help you make the necessary changes to your services to include this reporting option on your W-2’s for 2012.  If you are not an Ascentis customer yet, please feel free to contact us with any questions you may have about acquiring our Payroll system or moving from your current system to ours. Ascentis Payroll (as well as our other products) is extremely customizable, flexible, and easy to use.

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