August State and Local Updates

Federal News

National Payroll Week – Sept. 3-7, recognizes the work of payroll professionals and is an effort to help workers understand the wage withholding system and their paychecks.
National Payroll Week celebrates the hard work by America’s 156 million wage earners and the payroll professionals who pay them.  The American Payroll Association started the event in 1996.  APA chapters and members will give presentations to school and civic groups and participate in community service initiatives.

State News


San Francisco Tax Exemption: On July 10, 2012, the San Francisco Board of Supervisors passed a measure that excuses small businesses, with less than $500,000 in payroll expenses, from the city’s 1.5% payroll tax. Small businesses must comply to city labor laws to keep the 3-year exemption.


New Hire Reporting: As of July 5, 2012 employers are required to report the first day an employee works for pay when reporting to the State Directory of New Hires under bill S.B. 274.

Income for Child Support Includes Lump Sum Payments: As of July 5, 2012 the definition of “income” related to child support now includes any lump sum payments that are due to employees from employers.


Living Wage Rate Increase: On October 1, 2012 the Living wage in Miami Beach will increase from $12.17 to $12.92 an hour.  For employers who offer insurance, the rate increased from $10.72 to $11.28 an hour.


Internal Revenue Codes Updated: The Internal Revenue Codes (IRC) have been updated to mean the IRC of 1986, which took affect on December 31, 2011.


Withholding Returns and Taxes to be Paid Electronically: Beginning January 1, 2013, all employers will be required to file their withholding returns and pay taxes electronically. The Department of Revenue will be contacting all businesses that have not started filing their returns and paying taxes electronically throughout August.


Unpaid Income Tax Interest Rate: Becoming effective January 1, 2013 the interest rate for all unpaid income taxes will be 4%.


Online Access to Tax Return Forms: After November 1, 2012, employers will be able to access occupational license tax returns forms online on the secretary of state’s website.


Child Support Withholdings: The Division of Support Enforcement and Recovery announced that as of July 1, 2012, employers are responsible for collecting an additional $2.00 fee every time child support is deducted from a new or existing wage withholding order.  The fee will be sent to the Department of Health and Human Services with the child support that is withheld.


Income Tax Rate Decreased: Due to a legislation that expedited the scheduled income tax decrease, the income tax rate is decreasing to 4.25% from 4.35% beginning October 1, 2012.

Decreased Supplemental Wage Tax Rate: The supplemental wage tax rate has been rescheduled to now decrease from 4.35% to 4.25% beginning on October 1, 2012. The original date was January 1, 2013.


Withholding Returns to be Filed Online: Beginning October 1, 2012, employers must stop using FileMS and start using Taxpayer Access Point to file withholding returns online. The last day employers can use FileMS is September 17, 2012.

New Jersey

UI Insurance and Temporary Disability Insurance: The New Jersey Department of Labor and Workforce announced that taxable wage bases for both unemployment insurance and temporary disability insurance will be $30,900 for 2013.

New York

Living Wage Rate Increase: The Nassau County living wage rate increased on August 1, 2012 to $14.91 an hour, previously $14.61. For employers who offer health benefits, the increase was to $13.11 an hour from $12.11 an hour.

Interest Assessment Surcharge: New York must pay around $102 million in interest on their $4 billion loan from the Federal Unemployment Insurance Trust Fund by September 30, 2012. Employers will be temporarily charged with an Interest Assessment Surcharge (IAS) of .15%. The maximum amount that most employers will be assessed is $12.75 per employee.  For more information, the New York Department of Labor has publish FAQ regarding the Interest Assessment Surcharge.


Quarterly Filings of Withholding Returns: As of July 1, 2012, all employers must file quarterly withholding returns with the Oklahoma Tax Commission no later than the 20th day of the month at the end of each quarter.  Penalties include 10% of the amount or tax, or 10% of the amount that was under payed.


Third Party Preparers must Electronically File Quarter Withholding Returns: After January 1, 2013, third-party preparers who are filing 50 or more Employer Quarterly Return of Income Tax Withheld Forms must file the forms electronically and must do so for the remainder of the calendar regardless of the number of forms.

EFT Threshold for Withholding Tax Deposits Decreased: Employers paying $10,000 or more in withholding tax must now pay by by Electronic Funds Transfer (EFT). The threshold was lowered from $20,000.

Rhode Island

Minimum Wage Increased: Beginning January 1, 2013 the minimum wage in Rhode Island will increase to $7.75 an hour.  The tip credit will also increase to $4.86 an hour.

Employee Misclassification Rules:  As of June 20, 2012, an employer’s misclassification of an employee is now considered a violation of the state’s Payment of Wages law due to the passage of H.B. 7509.

West Virginia

Electronic Tax Payments: Beginning January 1, 2012, employers who are collecting more than $50,000 in total payments of any tax type from the previous year must start making payments through electronic funds transfer (EFT).


New Hire Reporting: Employers must report the first day an employee works for pay when reporting to the Department of Employment.

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