Multistate Payrolls.ppt [Read-Only]wmac-apa.org/images/meeting/071713/multistatepayrolls.pdf ·...
Transcript of Multistate Payrolls.ppt [Read-Only]wmac-apa.org/images/meeting/071713/multistatepayrolls.pdf ·...
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Multi-State Payroll
M&D Consulting, Inc. 1
Multistate Payrolls
Keys to Compliance
Margaret A. Roark, CPP
M&D Consulting, Inc.
Multistate Payrolls
Multistate Issues♦ Wage & Hour
♦ Regulations for Paying Employees
♦ Taxation of Types of Compensation
♦ Taxation of Benefits
♦ Deductions From Pay
♦ Employer Taxes
♦ Unemployment Insurance
♦ State Disability Insurance
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Multistate Payrolls
Multistate Issues (Cont)♦ Workers’ Compensation
♦ Reporting Requirements
♦ Local Taxes
♦ And lots more…
Multistate Payrolls
♦Critical Tools
–State Abbreviations
–Payroll Guide or Service
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♦State Tax Withholding
–Nine states with no income tax• Alaska
• Florida
• Nevada
• New Hampshire
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming
Multistate Payrolls
♦State Tax Withholding
–Factors in Determining Withholding• Nexus
•Who is Employer
•Who is Employee
• State of Residence
• State(s) Where Services are Performed
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♦Nexus
–Business Connection
–Nexus Questionnaire
Multistate Payrolls
♦Who is Employer?
–Nexus
–Office in state
–Pays wages for services performed in state
–Employers required to withhold FIT also must withhold SIT
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Multistate Payrolls
♦Who is Employee?
–Common law rule – IC or employee
– Individual performing services in state
Multistate Payrolls
♦State of Residence–Length of time in state
–Permanent place of abode
–Domiciled• Property ownership
• Bank account
• Driver’s license and vehicle registration
• Voting registration
• Presence of family
• Club and church memberships
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♦ State(s) where services are performed– State of office where employee assigned and works from
– State where services are performed – if different
– Services performed in more than one state• Allocation rules
– SALARIED EMPS - # of days worked in state
– HOURLY EMPS - # hours in state as % of total hours
– COMMISSION EMPS - % sales attributable to state as % of total
Multistate Payrolls
♦Reciprocity Agreements
–Tax in Live State
–Certificate of Non-Residence
♦Rules on Taxing Nonresident
–When no reciprocity exists
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Multistate Payrolls
♦Exceptions
–Military Spouses Residency Relief Act
–Air Transportation Employees
– Interstate Transportation
–Water Carriers
–Railroad Workers
Multistate Payrolls
♦ Local Taxes
–Alabama
–California
–Colorado
–Delaware
– Illinois
– Indiana
–Kentucky
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♦ Local Taxes (Cont)
–Maryland
–Michigan
–Missouri
–New Jersey
–New York
–Etc.
Multistate Payrolls
♦Supplemental Wages
–Bonuses
–Back Pay
–Commissions
–Overtime Pay
–Exercise of nonstatutory stock options
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♦Withholding Certificates
–Allow Use of Federal Form W-4
– If No Withholding Certificate
–Exempt Status Expires Annually
–Sending Exempt Forms to State Tax Department
Multistate Payrolls
♦Forms W-2 to Current and Terminated Employees
–Federal Rules
–Terminated Employee
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♦Wage & Hour Issues–Minimum Wage
•Could be higher than federal
•Employees covered by FLSA
•Subminimum wage
Multistate Payrolls
♦Wage & Hour Issues–Overtime
• Don’t always follow federal
• May be number of hours worked in a day or consecutive days worked.
• DOL has chart for minimum wage and overtime rules
• http://www.dol.gov/whd/minwage/america.htm
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Multistate Payrolls
♦Wage & Hour Issues–Meal & Rest Periods
• Only State Wage Hour Laws, not FLSA
•Meal or rest periods after working a certain amount of hours
Multistate Payrolls
♦Wage & Hour Issues–Call-In Time Requirements
• Employee is called in to work and then sent home
• All hours worked, not necessarily productive work
• Engaged to be waiting or
•Waiting to be engaged
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Multistate Payrolls
♦Wage & Hour Issues–Hiring of Minors
• Number of hours or duties performed
•When school is in session
•When school is not in session
• Age certificates or working papers
Multistate Payrolls
♦Wage & Hour Issues–Tip & Tip Credit
• Federal law allows $2.13/hour if tips make up the difference of federal minimum wage
• If state and federal are different, most favorable to employee must be followed
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Multistate Payrolls
♦Wage & Hour Issues– Jury Duty Pay Laws
• The Jury Systems Improvement Act of 1978
• Docking pay of exempt employees
• Federal tax treatment of wages from employer while on jury duty
Multistate Payrolls
♦Wage & Hour Issues–Time Off to Vote Laws
• No federal law
• Hours polls are open
• Deduction from wages
• Request from employee
• Types of elections
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♦Regulations for Paying Employees–Pay Frequency
–Lag Time
–Methods of Payment
–Electronic Pay Statements
–Payment Upon Termination
Multistate Payrolls
♦Deceased Employee Wages
–State Laws•Maximum Payable
• To Whom Payable
• Conditions
• Tax Withholding
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Multistate Payrolls
♦Deceased Employee Wages
–Federal Law• Check Received But Not Cashed
• Paid After Death in Same Year
• Paid After Year of Death
Multistate Payrolls
♦Unclaimed Wages
–When Wages are Considered Abandoned
–Reporting & Recordkeeping
–Where to Remit
–Due Diligence
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Multistate Payrolls
♦Taxation of Types of Compensation
–Severance
–Personal Use of Company Car
–Educational Assistance
Multistate Payrolls
♦Taxation of Benefits
–Group-Term Life Insurance
–401K Deferrals
–Café 125
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Multistate Payrolls
♦Deductions From Pay
–Creditor Garnishment• Definition of Disposable Earnings
• Amount of Wages Exempt
• Administrative Fees
Multistate Payrolls
♦Deductions From Pay (Cont)
–Child Support• When to Begin Withholding
• When to Send Payments
• When to Send Termination Notices
• Maximum Administrative Fee
• Maximum Withholding Amount
• Priority for Multiple Orders
• Medical Child Support Orders
• OCSE Website
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Multistate Payrolls
♦Employer Taxes
–Nevada Modified Business Tax
–New Hampshire Business Enterprise Tax
Multistate Payrolls
♦Unemployment Insurance
–Employment Status• Common Law Test
• ABC Test
–Taxable Wage Base
–Contribution Rate• New Employer
• Experience Rate
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Multistate Payrolls
♦Unemployment Insurance (Cont)
–Experience Rating Methods• Reserve Ratio
• Benefit Ratio
• Benefit Wage Ratio
• Payroll Stabilization
Multistate Payrolls
♦Unemployment Insurance (Cont)
–Employee Contributions
–New Employer Rates
–Voluntary Contributions
–Employees working in multiple states
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♦State Disability Insurance & Family/Sick Leave
–Type of Plan
–Coverage
–Wage Base
–Employee/Employer Contributions
–Weekly Benefit Amount and Duration
Multistate Payrolls
♦Workers’ Compensation
–Classification Codes
–Compensation Excluded from wages• Overtime Premiums
• Severance
• Uniform Allowances
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♦Reporting Requirements
–Report Due Dates
–New Hire Reporting
–Multiple Worksite Reporting
–Record Retention
Multistate Payrolls
We’ve covered about as much multistate information as our brains can handle for one day.
I hope it was helpful.
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Multistate Payrolls
Q&A
Margaret A. Roark, CPP
President, M&D Consulting, Inc.