Showing 3 posts in Employment Tax & Withholding.
401(k) Tax Notices must be updated for Tax Reform
The Internal Revenue Code (the "Code") requires that each qualified retirement plan sponsor provide a special tax notice to each plan participant. Read More ›
Categories: Employee Benefits, Employment Tax & Withholding, Tax
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New Michigan Legislation Repeals the Flow-Through Entity Withholding Requirement
Flow-through entities (“S” corporations and most limited liability companies) are no longer required to withhold Michigan income tax on members’ distributive shares. (See Michigan Public Act 158 of 2016). This change is effective for tax years beginning on or after July 1, 2016.
The prior withholding requirements continue in effect for tax years that began before July 1, 2016. Under the prior requirements, flow-through entities had to withhold Michigan income tax from each individual nonresident owner’s reasonably anticipated distributive share of the entities’ taxable income. Accordingly, this change is friendly to Michigan businesses with out-of-state owners. Read More ›
Categories: Employment Tax & Withholding
June 30 Deadline to Apply for Temporary Misclassified Worker Settlement Program
If your business may have misclassified workers as independent contractors, consider applying for the IRS's temporary Voluntary Classification Settlement Program (VCSP) by June 30th. The VCSP allows eligible taxpayers who have misclassified workers as independent contractors to prospectively reclassify them as employees pursuant to a closing agreement with the IRS. The settlement terms are generous. To qualify for the permanent program, a taxpayer must have filed all required Forms 1099 for the previous three years and must meet other requirements. The temporary version of the VCSP waives the requirement that the Form 1099 filing requirement in exchange for the taxpayer paying a larger percentage of the employment tax liability that would have been due on compensation paid to the reclassified workers during the most recent tax year and paying a reduced penalty for failing to file Forms 1099. A taxpayer may apply for the temporary program by filing Form 8952 with IRS by June 30, 2013, writing “VCSP Temporary Eligibility Expansion” across the top of the form, and striking Part V, Line A3. See IRS Annotation 2012-45 for details.
Categories: Employment Tax & Withholding
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