Payroll Provisions - Patient Protection and Affordable Care Act Upheld

Effect on Payroll Departments

The health care law requires employers to report the overall cost of employer-sponsored group health coverage on their employees’ Form W-2, Wage and Tax Statements. Effective in 2013, the payroll provisions in the health care law will place a limit of $2,500 for the annual pretax deductible amount for health flex spending accounts.

The law will also require employers to withhold an additional 0.9% in Medicare taxes for individual employees with earnings over $200,000 ($250,000 if married). Employers will not have to distinguish the added Medicare tax amount from the total amount on Forms W-2 but will need to use an extra line to report that additional tax amount on Form 941.

To easily and automatically stay on top of Government changes that affect your payroll processing, try out Optimum Payroll Software or check back often with Optimum’s blog.

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HR Administrator Kris Benson, Reid Supply Company

We use the provided tax summary reports to summarize the required tax payments which we process through EFTPS, which takes less than 15 minutes each payroll for all companies combined.