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With the Ernst & Young Payroll Resource Library, you stay ahead of the trends and developments that affect this complex—and ever-changing—area. By tapping into the experience and observations of Ernst & Young’s employment tax and payroll professionals across the country, the editors of this powerful, online resource help you stay fully aware of the latest events and changes.
Links within news stories display full text documents including legislation, regulations, court decisions, rulings and government reports.
The first time you click on a link you will be taken to the IntelliConnect login page, where you will need to enter your ID and password. Subsequent links will take you directly to the desired document.
Daylight saving time starts at 2 a.m. Sunday, March 14, when clocks will be set forward one hour. Shift workers on duty at that time will work one hour less, and paying them for a full shift may raise questions under the Fair Labor Standards Act.
An additional hour of pay provided to an employee who works less than a "full" shift need not be included in calculating the worker's regular rate of pay when considering any overtime for that week. At the same time, the extra hour of pay may not be credited toward any overtime pay that may be due. When daylight saving time ends, employees working a nine-hour shift because the clock is turned back must be paid for all hours worked, and the extra hour must be counted in establishing the hours worked in that week.
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The President signed the Temporary Extension Act of 2010, (P.L. 111-144) on March 2. Among other things, the law provides a 30-day funding extension for unemployment compensation. The law also amends the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) (see the CCH PAYROLL MANAGEMENT GUIDE Report Letter 1287/2093, dated May 5, 2009) to extend, through March 31, 2010, the eligibility of a qualified beneficiary for COBRA continuation coverage and premium assistance. The law redefines a "premium assistance eligible individual'' for COBRA continuation coverage. As redefined, the law now treats as a qualifying event the involuntary termination of employment of any qualified beneficiary who did not make (or who made and discontinued) an election of COBRA coverage on the basis of a reduction of hours of employment.
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The IRS has administratively determined to accept the position that medical residents are excepted from FICA (Social Security and Medicare) taxes based on the student exception for tax periods ending before April 1, 2005, when new IRS regulations went into effect. Under the student exception, Code Sec. 3121(b)(10), FICA taxes do not apply to service performed by students employed by a school, college, or university where the student is pursuing a course of study.
The IRS will, within 90 days, begin contacting hospitals, universities and medical residents who filed FICA refund claims for these periods to provide further information and procedures. Employers and individuals with pending claims do not need to take any action at this time. Taxpayers can obtain additional information by calling 1-800-919-1717 or by going to http://www.irs.gov/charities and clicking on Medical Resident FICA Refund Claims. Taxpayers with currently pending suits should contact the Department of Justice attorney assigned to the case. (IR-2010-25, March 3, 2010.)
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The Internal Revenue Service has announced that interest rates will remain the same for the calendar quarter beginning April 1, 2010. The interest rates are as follows: four percent for overpayments (three percent in the case of a corporation); four percent for underpayments; six percent for large corporate underpayments; and one and one-half percent for the portion of a corporate overpayment exceeding $10,000.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus three percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points and the overpayment rate is the federal short-term rate plus two percentage points. The rate for large corporate underpayments is the federal short-term rate plus five percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half of a percentage point.
These interest rates are computed from the federal short-term rate based on daily compounding determined during January 2010 ( IR-2010-22, February 26, 2010; Rev. Rul. 2010-9, I.R.B. No. 2010-13, March 29, 2010).
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The Social Security Administration has announced that it is renewing a computer matching program with the Department of Health and Human Services (HHS), Office of Child Support Enforcement (OCSE) to verify the eligibility of individuals who seek federal prescription drug subsidies. Specifically, the SSA will verify the eligibility of individuals who apply for or receive subsidies under Social Security Act §1860D-114 (42 USC 1395w-114), as amended by the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), by matching key data with the OCSE.
The MMA requires the SSA to perform this verification for each individual who seeks the drug subsidy and who self-certifies his or her income, resources and family size.
What information will be provided?
The program matches quarterly wage and unemployment insurance information from the National Directory of New Hires (NDNH), which is maintained by the OCSE, with certain identifying information in the SSA's Medicare database. The program will establish the conditions, terms and safeguards under which the OCSE agrees to disclose this data. The full text of the notice as it appears in the February 26, 2010, issue of the Federal Register (75 Fed. Reg. 9012) is published in this week's Report at ¶14,492C.
Comments solicited
The matching program will become effective 40 days after notice of the program is sent to Congress and the Office of Management and Budget or March 28, 2010, whichever date is later. Interested parties may send comments to one of the addresses listed in the announcement.
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Unemployment Insurance Reporter with Social Security provides in-depth coverage of federal and state laws and regulations, including Unemployment Insurance, Social Security, Supplemental Security Income, and Disability. With all the facts and data about taxes and benefits under major subject categories, and expert “plain English” explanations, analyses and indexes, there is no other product that offers the same scope of coverage.
CCH® is the leading provider of information covering Human Resources, Employment and Labor Benefits, Pensions, Payroll, Safety, and Unemployment Insurance. For more information about our products and services, go to http://hr.cch.com/ or call 800-449-9525. This newsletter is copyrighted by CCH® and may be redistributed only for non-commercial purposes and only in its entirety, specifically including the CCH® headers, this paragraph and the CCH® copyright line. No other redistribution or re-purposing, including but not limited to use on a web site, intranet or extranet, is permitted without prior written permission of CCH®.
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