One of the most consequential developments of 2018 – for both businesses and individuals – was the passage of the Tax Cuts and Jobs Act.
This bill – signed by the president at the end of last year – increases the standard deduction, removes personal exemptions, increases the child tax credit, limits or discontinues certain deductions, and of course, changes the tax rates and brackets themselves.
Now, the IRS has released a new tax withholding calculator to give employees the information needed to complete a new Form W-4, which they can submit to their employer if they choose to adjust their withholding.
The dust has settled around the new tax reform bill that was signed late last year, and one provision included in the law is getting attention from employers as well as human resource professionals.
The Paid Family and Medical Leave Credit is a new federal tax credit for employers who offer paid family or medical leave to their “qualifying employees.” For purposes of the credit, a “qualifying employee” is one who has been employed for at least one year, and did not receive compensation in excess of $72,000 in 2018.
Because employers can only claim the credit if they have a paid family leave policy on the books, HR departments have an opportunity to potentially decrease their organizations’ tax liability by ensuring the policy meets the standards set by the credit – pending review of anticipated IRS guidance.
On January 25, 2018, the Equal Employment Opportunity Commission (EEOC) announced that it is now accepting 2017 EEO-1 Reports. This report is identical to the 2016 EEO-1 Report.
Employers with 100 or more employees (and federal contractors with 50 or more employees) have until March 31, 2018 to file their 2017 EEO-1 Report, using data from a “snapshot” taken during October-December 2017.
The data required is the same as it’s always been: number of employees by race, ethnicity, and sex, in each of the 10 EEO job categories.
The passage of Tax Reform in late December was followed by lingering questions from employers on how they should withhold taxes from their employees in 2018 – especially in light of anticipated new withholding tables and potential changes to the Form W4.
On January 11, the IRS released these new withholding tables, which reflect the increase in the standard deduction, repeal of personal exemptions, and changes in tax brackets and rates. The agency advised employers to begin using the new tables as soon as possible, and no later than February 15, 2018.
Employers in Massachusetts will recall that a new employer health assessment takes effect January 1, 2018.
The Employer Medical Assistance Contribution (EMAC) supplement is a new penalty, and will be levied on employers whose non-disabled employees either obtain health insurance from MassHealth (excluding the premium assistance program) or receive subsidized coverage through the Massachusetts ConnectorCare program instead of through an employer-sponsored health plan.
The EMAC supplement applies to employers with six or more employees, and the penalty amount is up to $750 for each worker receiving subsidized coverage.
Here’s what employers need to know about the EMAC:
Rhode Island is set to become the 8th state in the country to mandate paid sick leave.
The bill, “The Healthy and Safe Families and Workplaces Act,” mandates that employers with 18 or more employees in Rhode Island provide 1 hour of paid leave for every 35 hours worked. Employers are required to provide up to a maximum 24 hours in 2018, 32 hours in 2019, and 40 hours by 2020.
Here are some of the top items in the new Rhode Island sick leave law employers should be aware of:
A recently signed law in the state of Massachusetts will penalize employers who have workers receiving subsidized health care, while also increasing the Employer Medical Assistance Contribution (EMAC) tax rate. It applies to Massachusetts employers with six or more employees and is set to take effect January 1, 2018.
There are two parts to the law; the first increases an existing tax (the EMAC), while the second introduces a new penalty.