Payroll Updates

PAYROLL CURRENTLY Issue No. 11 is now available.

The current issue, which is dated November 3, 2017, includes coverage of the following payroll compliance developments: 

401(k) Contribution Limit Increases to $18,500 for 2018. The IRS has announced the cost-of-living adjustments applicable to dollar limits on the benefits and contributions under qualified retirement plans, as well as other items for tax year 2018. The dollar limit on employee elective deferrals to 401(k), 403(b), and 457(b) plans increases to $18,500 (from $18,000 in 2017). Notice 2017-64. 

Social Security Wage Base Increases to $128,700 for 2018. The Social Security Administration (SSA) has announced that the 2018 social security wage base increases to $128,700 (from $127,200 in 2017). The maximum social security tax that employees and employers will each pay in 2018 increases to $7,979.40 (from $7,886.40 in 2017). 

IRS Announces 2018 COLAs for Transportation Fringes, FSA Deferrals, Foreign Earned Income Exclusion, and More. For 2018, the maximum excludable qualified transportation fringe increases to $260 per month (from $255 in 2017); the maximum employee contribution to a health flexible spending arrangement increases to $2,650 (from $2,600 in 2017); and the maximum foreign earned income exclusion amount increases to $104,100 (from $102,100 in 2017). Rev. Proc. 2017-58. 

State Unemployment Insurance Taxable Wage Bases for 2018. Most states have released their state unemployment insurance (SUI) taxable wage bases for 2018. A list of the state wage bases has been posted on the APA website. 

DOJ to Appeal Final Overtime Ruling. The U.S. Department of Justice (DOJ), on behalf of the U.S. Department of Labor (DOL), has filed a notice to appeal a Texas federal district court's final ruling that the DOL's revised overtime rule was invalid. 

IRS Offers Additional Disaster Relief. The IRS is continuing to offer relief for victims of federally declared disasters. 

APA Meets With California Secure Choice Administrators. See "Inside Washington" for November. 

IRS Releases Instructions for Tip Reporting Form 8027. The IRS has released Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, along with the Instructions for Form 8027 for tax year 2017 on its website. 

IRS Plans to Expand W-2 Verification Code Program for 2018. The IRS will expand the program for the 2018 filing season by adding more participants and changing some aspects of the program. 

PAYROLL CURRENTLY Moving to APA's Bookshelf. Starting in January, PAYROLL CURRENTLY will be available on APA's Bookshelf. It will remain a free benefit for APA members. 

Employer Did Not Violate FLSA by Keeping a Portion of Tips. Malivuk v. Ameripark, LLC. 

IRS Issues 2017 Form 944 With Few Changes. The IRS has released the 2017 Form 944, Employer's Annual Federal Tax Return, and its instructions. The form and instructions are available on the APA website. 

IRS Revises Form 8809 for Requesting Filing Extensions. The IRS has issued a revised version of Form 8809,Application for Extension of Time to File Information Returns, which is used to request an extension of time to file some information returns. The form is available on the IRS website. 

IRPAC Recommends Truncation of SSNs on Some Forms W-2, Changes to Penalty Abatements for Incorrect TINs. Read an APA report on payroll-related recommendations made by the IRS Information Reporting Program Advisory Committee at its annual meeting. 

Capitol Hill Update. 

Colorado Addresses Issues in Child Support Withholding Orders. See "Inside Washington" for November. 

IRS Advises Filers to Submit Separate Forms 1096 for Forms 1099-MISC With and Without Box 7 Amounts. The IRS advised filers not to include Forms 1099-MISC, Miscellaneous Income, with non-employee compensation (NEC) reported in Box 7, and Forms 1099-MISC without NEC reporting, on the same Form 1096. 

Off-Duty Officers Were Not Eligible for Overtime. Allen v. City of Chicago. 

IRS Releases 2017 Form 945, Instructions. The IRS has released the 2017 Form 945, Annual Return of Withheld Federal Income Tax, and its instructions. The form and instructions are available on the APA website. 

OCSE Updates Employers' FAQs About Income Withholding. The Office of Child Support Enforcement (OCSE) has updated its webpage on employers' frequently asked questions (FAQs) about income withholding orders. 

IRS Announces Delay in e-Services Migration. On October 27, the IRS released a Quick Alert informing e-Services users that the upgrade to a new platform is proceeding, but the move to new Secure Access authentication will be delayed. 

Tax Reform Debate Poses Questions for Payroll Professionals. See "Inside Washington" for November. 

TIGTA Reviews Effect of IRS Budget Cuts on Criminal Investigations and Tax Compliance. The Treasury Inspector General for Tax Administration (TIGTA) has issued a new report as part of its Fiscal Year (FY) 2017 Annual Audit Plan that addresses the major management challenge of improving tax compliance. TIGTA Audit Report No. 2017-30-073. 

Wage and Hour Roundup. 

State and Local News.
  • Alaska – minimum wage increased
• California – overtime exemptions for computer software professionals, physician increased
• Connecticut – withholding tables, calculation rules unchanged
• Florida – minimum wage increased, tip credit unchanged
• Illinois – filing deadline for Forms W-2 accelerated
• Montana – minimum wage increased; withholding tables unchanged
• New Jersey – minimum wage, tip credit increased
• New Mexico – Albuquerque minimum wage, tip credit increased; Bernalillo County minimum wage and tip credit increased
• Ohio – minimum wage, tip credit increased
• Pennsylvania – employer and employee UC contribution rates announced
• Rhode Island – paid sick leave enacted
• Utah – withholding guide updated
• Wisconsin – Forms W-2, electronic filing threshold decreased

Also available are an Index for 2017, the latest Inside Washington, and the APA's Monthly Calendar, offering compliance and professional development information. 

Get year-end training on command with APA's Preparing for Year-End and 2018 Webinars On Demand