The Affordable Care Act & Changes to 2014 W-2 and 1099 Forms

The April 15 tax deadline is still months away but the Affordable Care Act has brought many new changes to the Forms W-2 and 1099 reporting that require you to start preparing for the tax season now. Did you know the first tax related deadline is approaching on January 31, 2014? Read below to find out important changes and dates that your company needs to be aware of for the upcoming tax season.

Affordable Care Act Tax Changes

  • Employers are required to withhold .9% Additional Medicare Tax on taxable wages paid to an employee of more than $200,000 in a calendar year.
  • It is mandatory for employers who filed less than 250 W-2s to report the cost of coverage under an employer sponsored health plan. This must be recorded on the W-2 form in Box 12.

Filing Tips and Important Dates

  • Employers must provide the filer with proper instructions for forms 1099 and W-2
  • Businesses with 250 or more W-2 or 1099s must file their forms electronically
  • 2013 W-2s must be kept for 4 years and 1099s must be kept for 3 years after the due date of the respective report
  • Employers must mail employee copies of W-2 and recipient copies of 1099 by January 31, 2014
  • Paper filing of Form W-2s must be sent to the and Form SSA 1099’s to the IRS by February 28, 2014. Electronic filing of these forms must be sent by March 31, 2013

W-2 Provisions

  • The rate of the social security withholding (employees only) on the W2 form is 6.2% for 2013
  • On W-2 G form, boxes have been added to report state winnings, local winnings,  local income tax withheld and the name of the locality.

Form 1099 Provisions

  • Box 11 is now used to report foreign tax paid on payments reported on 1099 MISC
  • Box 12 is used to enter the name of the foreign country or U.S. possession for which foreign tax was paid

Optimum Payroll Software can help your business stay up to date and compliant with all Federal and State laws and revisions.  To learn more about how Optimum can save you time and money with streamlined payroll processing, watch a free demo or contact us today!
View more information and download the the W-2 and 1099 forms on the IRS website.

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