Business Tax Extenders Pertinent To Your PEO

The House passed H.R. 5771 the "Tax Increase Prevention Act of 2014" more commonly known as the "Tax Extenders" on December 3. The bill included extensions of popular business tax measures like R&D and Work Opportunity tax credits, bonus depreciation and Section 179 depreciation for one year (effective for tax years beginning after December 31, 2013). Of particular note for PEOs is the inclusion of much of the verbiage that was contained in the "Small Business Efficiency Act" that codified PEOs in the Internal Revenue Code. In this bill, a "certified PEO" would be deemed to be the employer for employment tax purposes and treated as the successor employer of their client customers. A certified PEO would be required to be bonded (greater of 5% of their prior year federal payroll tax liability up to $1M or $50,000); have an independent certified audit in accordance with GAAP annually; have quarterly payroll tax assertions performed; and pay an annual fee of up to $1,000.The bill now heads to the Senate for their review.

PAYROLL FILING Update

New Filing Requirements For Michigan Employers

As we prepare for the holiday season, it's hard to ignore the fact a new year is right around the corner. With this brings changes to the electronic filing requirement for quarterly tax reports for Michigan employers. Starting with the first quarter of 2015, all employers including those with five or fewer employees will be required to file their tax reports (UIA 1028) electronically. First quarter reports are due April 25, 2015. In 2014, the state of Michigan has mandated all employers with six or more employees file their quarterly taxes electronically though the Michigan Web Account Manager (MiWAM). If you have not already registered for a MiWAM account, you can do so at michigan.gov/uia. MiWAM provides a convenient, simple way to file quarterly tax reports; schedule payments; respond to fact-finding inquiries, view letters and notices from the agency; and file UIA tax protests.

Federal Unemployment Credit Reductions For 2015

The Federal Unemployment Tax Act (FUTA) tax rate is 6.0% of wages paid up to a limit of $7,000 per worker annually. Employers in most states are allowed a 5.4% credit against the federal tax for a net rate of .6%. States with outstanding federal loans for two or more years are subject to a credit reduction. For 2014, employers in seven states and one jurisdiction will pay increased FUTA tax rates due to credit reductions. Please see below for a summary of states with increased FUTA due to credit reductions for 2014:

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