California EITC (Earned Income Tax Credit)
The state of California requires that a separate notice be sent to employees advising them to file for the Federal Earned Income Tax Credit if they are eligible. Effective with this year end, California employers must also advise their employees that they may be eligible for the California Earned Income Tax Credit. This credit is offered in addition to the Federal Earned Income Tax Credit. Form FTB-3514 plus a California Income Tax return will assist any eligible taxpayer. See more about this credit here.
Ohio FUA Repayment
The state of Ohio has repaid its FUA (Federal Unemployment Account) loan balance. These loans are available to states that have depleted their unemployment account balances. As long as Ohio does not borrow any more money from the fund before the deadline of November 10, 2016, Ohio can avoid being a FUTA credit reduction state for the 2016 reporting year. This would mean that Ohio employers would be able to take the full FUTA credit of 5.4% as long as all of their state unemployment returns were filed and paid timely during 2016.
The Department of Justice announced today the arrest of 61 people in the U.S and in India for the perpetration of an unusually successful scam. The calls to individuals threatened them with lawsuits unless the person paid up.
The money, in most cases, is lost. The overseas conspirators, including call centers in India, used methods of transferring cash that made it generally undetectable.
The operator would threaten potential victims, the government alleges, and if the operator found someone who believed the call was real, co-conspirators would work to extract money from the victim.
“One 85-year-old California woman was threatened over nonexistent tax violations,” NPR’s Carrie Johnson reports. “Prosecutors say she turned over $12,000 to the scammers.”
The IRS will not call a taxpayer; if contact is needed, they will send a letter via USPS postal mail. See more information on the case here.
If you’re an employer, you’ll need to be looking out for changes, new rules, and any other compliance measures for year-end 2016. We’ll be supplying a round-up of these in our blog posts over the next few weeks.
Social Security Wage Base for 2017
The Social Security Administration has released the wage base for 2017. Please see the fact sheet here.
The wage base will be $127,200, an increase of $8,700 from the 2016 base of $118,500. The total amount withheld from employees will be $7,886.40, an increase of $539.40 from $7,347 in 2016. As in previous years, all Social Security deductions are matched by you, as the employer. This year again, there is no cap on Medicare withholding for employees or employers.
W-2 Filing Deadline – are you prepared?
REMINDER: The due date for filing 2016 W-2 Forms is January 31, 2017. We discussed earlier this year the fact that the Federal government and many state governments have accelerated the W-2 filing deadlines in an attempt to stem tax return fraud. Here’s a link to a useful fact sheet that will put this information at your fingertips.
Make sure your calendar is updated. See you soon.
Navigating state law changes can be tricky and often results in employers not being in compliance with new regulations. Small businesses can unknowingly be out of compliance if they fail to understand all aspects of newly enacted laws. This could be the case with California’s Senate Bill (“SB”) 3. Signed by Governor Brown on April…
via Navigating California’s New $15 Minimum Wage — Zenefits Blog