January Federal and State News

Federal Updates:

The IRS has announced that the business standard mileage rate for transportation expenses paid or incurred beginning January 1, 2012, will be 55.5 cents per mile, unchanged from the rate in effect during the final six months of 2011.

In addition, the 2012 standard rate for miles driven for medical or moving purposes will decrease to 23 cents per mile, down from the 23.5 cents per mile rate in effect during the final six months of 2011.  Note, however, that the standard mileage rate for operating a passenger car for charitable purposes, which is set by law, will stay at 14 cents per mile in 2012.

Finally, for purposes of computing the allowance under a fixed and variable rate (FAVR) plan, the standard automobile cost may not exceed $28,000 in 2012, up from $26,900 in 2011.  A FAVR allowance uses a flat rate or stated schedule that combines periodic fixed and variable rate payments, and it relieves employees of the need to keep a record of their actual expenses.

State and Local Updates:



Wage Theft Prevention Act Additions and FAQ.
The Wage Theft Protection Act became effective January 1, 2012. Labor Code sections 2810.5, involving employers providing specific information to employees at the time of hire was added. FAQ were updated 1/23/12.

San Francisco Health Care Security Ordinance Modified:
As of Jan. 1, 2012, the San Francisco Health Care Security Ordinance includes changes to health reimbursements accounts used by employers. The modifications also require companies with 20+ employees to post HCSO notices at the workplace. Read the notice here.


Minimum Wage Increase: The minimum wage increased to $7.64 an hour to adjust with inflation. The tip credit stayed at $3.02 an hour.


Updated Withholding tables All wages paid after Jan. 1, 2012 must comply with the 2012 revised withholding forms.

District of Columbia:

Threshold Due Date Changes for Electronic W-2 filing.Any company filing more than 25 forms W-2 must file the forms electronically, previously 50 W-2 Forms. The due date to file these forms is changed to Jan. 31, 2012.

Withholding Tables Revised: Revised withholding tables allowances by the Tax and Revenue office resulting in an increase in employee withholdings. 


Previous Version of Withholding Booklet Made active:
A recent legislation delayed the personal exemption increase until 2013, therefore The Department of Taxation announced employers should continue to use Booklet A and it’s supplemental insert.


Revised Withholding tables and payment proceduresWages paid after Jan. 1, 2011 are suceptible to the revised wage-bracket and percentage method withholding tables. Paper forms 940 will not longer be mailed to those who regularly pay electronically and a there is a new ACH debt payment process.


Withholding Tables Released:
Queen Anne’s County Income tax increased from 2.85% to 3.2%, which is the only rate change for 2012 for the Maryland Withholding Tables.


Withholding Tables Revised The withholding rate decreased from 5.3% to 5.25%


UI Taxable wage base change, tax rate notice processing delayed There was an increase in the state unemployment insurance taxable wage base from $9,000 to $9,500. There was a delay in processing employer’s tax rate notices due to legislative changes.


Withholding tables issuedThe wage bracket withholding tables, the computer formula and 2012 instruction booklet have been issued.

New Mexico:

Withholding Tables Issued:Revised wage-bracket and percentage method withholding tables issued for wages paid after Jan. 1, 2012.

North Dakota:

Withholding Tables Issued:Revised wage-bracket and percentage method withholding tables issued for wages paid after Jan. 1, 2012.


Withholding Instructions and Payment due dates releasedIncome Tax withholding instructions and school district income tax instructions were issued, which discuss the tax amnesty program. The 2012 due dates and payment schedule for withholding schedule were also released. Download here


Withholding Tables Issued:
New Wage bracket and percentage method withholding tables issued by Tax Commission for all wages paid after Jan. 1, 2012. Top personnel income as decreased from 5.5% to 5.25% and supplemental wage tax rate.


Employer penalties for bad paychecks enacted:
Employers who issue a dishonored check to employees will face the state law penalties by paying the employee the amount of the paycheck damages in the amount of $100 or 3 times the amount of the paycheck - whichever is greater. The maximum amount is $500 more than the paycheck.

Withholding Tables, formulas revised: New wage bracket withholding tables have an increase in the federal tax subtraction from %5,950 to $6,100.


Philadelphia Wage Tax WithholdingAct 32 of 2008 no longer applies for employers that have employees who live in Philadelphia, work outside of Philadelphia (still in PN). The Department of Community and Economic Development is saying to use Act 48 from 1994.

Rhode Island:

New Uniform Withholding Table IssuedThe Division of Taxation introduced the 2012 booklet for withholding that include a uniform table, reflecting the 2010 changes in state law, for employers to use to calculate withholdings.


Withholding Tables Issued: Wage bracket and percentage method withholding tables have been released. Download here.

Source: APA Payroll Currently

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