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U.S. Master Payroll Guide (2011)
This one-source resource to payroll is part of CCH's Master Series of professional guidebooks. You'll find everything you need to know about payroll from employers and their obligations to payroll withholding and tax deposits to payroll management and administration issues.
Scott Mezistrano, CPP, Senior Manager of Government Relations for the American Payroll Association (APA) summarized current legislative trends and APA lobbying efforts at the National Association of Computerized Tax Processors (NACTP) Annual Meeting that was recently held in Chicago, Illinois. Some of the topics discussed are highlighted below.
State withholding simplification
The APA is in favor of HR 3359, the Mobile Workforce State Income Tax Fairness and Simplification Act. Currently, most states with an income tax impose some tax on wages earned within their borders by residents of other states. Some have varying de minimis amounts, or thresholds, that need to be exceeded before withholding is required. The thresholds differ widely, including various numbers of days worked within the state and various wage amounts earned. For example, the District of Columbia has an income tax but does not impose it on nonresidents who earn wages within the District.
Under the bill, all states and localities would have a threshold of 60 days (physical presence and performing duties) before income tax withholding would be required. Current reciprocity agreements would remain intact.
Form 941X
The IRS is developing a new payroll form, Form 941X, Amended Employer's QUARTERLY Federal Tax Return. If released, it will be used for the first quarter of 2008. It is going to replace Form 941c, Supporting Statement To Correct Information. The APA has done focus-group testing of the form and has some concerns about the order of the columns.
Electronic Form W-2
The APA was in favor of allowing employers to issue Form W-2 electronically. Currently, employees must affirmatively consent to receive Form W-2 electronically and not on paper. The APA is in favor of changing this. The APA wants the employer to choose electronic W-2s as the default delivery system and then let employees affirmatively elect a paper version if they want it. Currently, employers may do this with Form W-4.
Pennsylvania simplification
The Governor of Pennsylvania has approved legislation that will decrease the number of tax collecting agencies from 560 to 69. Currently, the state has thousands of local tax jurisdictions. Employers will be required to remit taxes to one tax agency no matter how many work locations the employer has. In addition, withholding and remittance requirements will be standardized.
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