The Internal Revenue Service today reminded taxpayers of a special new provision that will allow more people to easily deduct up to $300 in donations to qualifying charities this year.

Following special tax law changes made earlier this year, cash donations of up to $300 made before December 31, 2020, are now deductible when people file their taxes in 2021.

"Our nation's charities are struggling to help those suffering from COVID-19, and many deserving organizations can use all the help they can get," said IRS Commissioner Chuck Rettig. "The IRS reminds people there's a new provision that allows for up to $300 in cash donations to qualifying organizations to be deducted from income. We encourage people to explore this option to help deserving tax-exempt organizations – and the people and causes they serve."

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On September 30, 2020, Governor Gavin Newsom signed Assembly Bill (AB) 1512, which amends California Labor Code Section 226.7 by authorizing employers to require certain unionized private security officers “to remain on the premises during rest periods and to remain on call, and carry and monitor a communication device, during rest periods.” Although AB 1512 became effective immediately upon the governor’s signature, it applies only to cases filed on or after January 1, 2021. The statute remains in effect until January 1, 2027.

The amended statute applies only if the following conditions are satisfied:

• The employer and employee must both be registered under California’s Private Security Services Act.
• “The employee is covered by a valid collective bargaining agreement.”
• “The valid collective bargaining agreement expressly provides for the wages, hours of work, and working conditions of employees.” The agreement also must “expressly provide[] for rest periods for those employees, final and binding arbitration of disputes concerning application of its rest period provisions, premium wage rates for all overtime hours worked, and a regular hourly rate of pay of not less than one dollar more than the state minimum wage rate.”

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Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 1.3 percent in 2021, the Social Security Administration announced.

The 1.3 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2021. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2020. (Note: some people receive both Social Security and SSI benefits). The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.

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On April 3, Governor Cuomo signed into law the State Budget (Senate Bill S7506B), which includes a provision that amends the New York Labor Law to require many employers to provide paid sick leave (“PSL”). The law takes effect 180 days after the enactment (September 30, 2020), and employees will begin accruing leave on that date; however, employees may not begin to use accrued leave until January 1, 2021. Unlike many laws passed in recent weeks in the wake of the COVID-19 pandemic, this paid sick leave law will have permanent effect.

For more information about the Paid Sick Leave Law:
New York State Enacts Permanent Paid Sick Leave Law.

Senate Bill Referencing the Law:
New York State Senate Bill.

All taxpayers should review their withholding annually. They can use the IRS Tax Withholding Estimator to check and make sure they're not having too little or too much federal tax withheld. This tool offers workers, retirees and self-employed individuals a step-by-step method to help figure out if they should adjust their withholding.

Access the Tool.

• The family-leave insurance tax rate is to be 0.511% in 2021
• The maximum annual contribution is to be $385.34

The tax rate for New York’s family-leave insurance program is to increase for 2021, the state Paid Family Leave department said Sept. 2, 2020.

Effective Jan. 1, the tax rate is to be 0.511%, up from 0.27% in 2020, the department said on its website. The tax generally must be deducted from each employee’s wages, although employers may choose to forgo deductions and instead pay premiums equal to the amounts that would have been deducted.

For 2021, the weekly taxable wage base for the family-leave insurance tax is to be the lesser of the employee’s total wages for the week or $1,450.17. The maximum total contribution for 2021 is to be $385.34 for each employee, up from $196.72 in 2020.

The Office of Business Affairs and Consumer Protection have release a Valueable Set of Posters to reflect changes in Minimum Wage and Work Weeks:

2020 Chicago Minimum Wage Update [PDF]

2020 Chicago Work Week Update [PDF]

The following localities in California are increasing their minimum wages Effective July 1, 2020:

• Emeryville
• Alameda
• Malibu < 26 Employees
• Malibu > 25 Employees
• Freemont < 26 employees
• Freemont > 25 employees
• Novato < 26 Employees
• Novato > 25 < 100Employees
• Novato < 99 Employees
• San Leandro
• Santa Rosa > 25 Employees
• Santa Rosa < 26 Employees
• Pasdena > 25 Employees
• Pasadena < 26 Employees
• Santa Monica > 25 Employees
• Santa Monica < 26 Employees
• Los Angeles City < 26 Employees
• Los Angeles City > 25 Employees
• Los Angeles County < 26 Employees
• Los Angeles County > 25 Employees

To see what the new Minimum Wage will be for July 1, 2020, please download our minimum wage guide here: Trackforce Valiant Minimum Wage Guide

The U.S. Department of Labor’s Wage and Hour Division (WHD) today announced a final rule that allows employers to offer bonuses or other incentive-based pay to employees whose hours vary from week to week.

The rule revises the regulation for computing overtime compensation for salaried, non-exempt employees who work hours that vary each week (i.e., a fluctuating workweek) under the Fair Labor Standards Act (FLSA). It also clarifies that bonuses, premium payments, commissions, and hazard pay on top of fixed salaries are compatible with the fluctuating workweek method of compensation, and that employers must include supplemental payments when calculating the regular rate of pay as appropriate under the FLSA. The final rule includes examples and minor revisions to make the rule easier to understand.

The Notice of Proposed Rulemaking was available for public comment for 30 days. The Department received approximately 36 comments on the proposal, all of which are available to the public at www.regulations.gov.

For more information about the Final Rule, please visit www.dol.gov/agencies/whd/overtime/fww.

The Department of Labor has provided a handy reference guide for understanding and following the Fair Labor Standards Act:

Download the Guide

On September 24, 2019, the U.S. Department of Labor announced a final rule to make 1.3 million American workers newly eligible for overtime pay.

In the final rule, the Department is:

• raising the “standard salary level” from the currently enforced level of $455 per week to $684 per week (equivalent to $35,568 per year for a full-year worker);
• raising the total annual compensation requirement for “highly compensated employees” from the currently enforced level of $100,000 per year to $107,432 per year;
• allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level, in recognition of evolving pay practices; and
• revising the special salary levels for workers in U.S. territories and the motion picture industry.

Read More

On December 12, 2019, the U.S. Department of Labor (Department) announced a Final Rule that will allow employers to more easily offer perks and benefits to their employees.

The rule marks the first significant update to the regulations governing regular rate requirements under the Fair Labor Standards Act (FLSA) in over 50 years. Those requirements define what forms of payment employers include and exclude in the FLSA’s “time and one-half” calculation when determining overtime rates. Read More

The Department of Labor & Industries (L&I) has updated the employment rules that determine which workers in Washington are required by law to be paid at least minimum wage, earn overtime pay, and receive paid sick leave and other protections under the state Minimum Wage Act. These changes will affect executive, administrative, and professional (EAP) workers as well as outside salespeople and computer professionals across all industries in Washington. Read More

Under the new Massachusetts Paid Family Leave Law, M.G.L c. 175M (“MAPFML”), employees and other covered individuals in the Commonwealth will be entitled to a generous set of new paid leave benefits and rights beginning January 1, 2021. While no benefits are available under the MAPFML until 2021, the first quarterly contributions to the Commonwealth’s MAPFML fund (i.e. to cover the period from October 1 to December 31, 2019) must be remitted by employers with 25 or more covered individuals by January 31, 2020.

Employers, however, may avoid collecting and remitting contributions by establishing a private plan, so long as the private plan provides benefits and rights meeting or exceeding those available under the MAPFML. Many employers are exploring and pursuing this option for a variety of reasons including: cost savings; a reluctance to participate in (and direct employees to participate in) a state plan; a hope to maintain some control over (or at least advance warning of) employee leaves of absence; and a desire to preserve existing practices and policies. Private plans may be either self-funded or fully insured, at the employer’s option. >>>>> Read More

The Department of Labor is proposing rule changes that will clarify the requirements for companies that use a fluctuating work week method for calculating overtime. The proposed new rules were published in the Federal Register on 11/5/19 with a comment closure date of 12/5/19 with an effective date expected to be early 2020. Read More

The fluctuating work week method requires an employer to pay a non-exempt employee who works varying hours from week to week a fixed salary amount. It also allows the employer to pay bonus compensation for things like working a night shift, on holidays or a production bonus.

If an employee works over 40 hours, they must be paid an overtime premium of half their regular rate of pay. This is where the difference comes in, you calculate the regular rate of pay by adding the salary amount and any bonuses received together and divide that by the total number of hours worked. This will result in a regular rate of pay that decreases as the number of hours the employee works per week increases.

Massachusetts State law requires every employer in Massachusetts with six or more employees to annually submit a Health Insurance Responsibility Disclosure (HIRD) form. If you are an employer who currently has (or had) six or more employees in Massachusetts in any month during the past 12 months preceding the due date of this form (December 15th of the reporting year), you are required to complete the HIRD form. Read More

The California Assembly Bill 1554 will require employers to notify an employee who participates in a Flexible Spending Account (FSA) of any deadline to withdraw funds before the end of the plan year in at least two different prescribed manners.

The legislation refers to health care, dependent care and adoption assistance FSA accounts. Read More

Beginning 1/1/16 employers with 20 or more employees (full or part time performing 50% or more of their work in DC) were to provide a transit benefit option choices:

• Employee-paid, pre-tax benefit (most popular)
• Employer-paid, direct benefit Employer-provided transit (e.g.van pool)

Penalties for non-compliance will begin on November 14, 2019. These penalities will be per employee, and are:

• For the first offense, $100;
• For the second offense, $200;
• For the third offense, $400; and
• For the fourth and subsequent offenses, $800.

As an employer, what am I supposed to do?

1. Notify employees of the available transit benefit program
2. Provide information to covered employees on how to apply and receive benefits
3. Issue benefits to covered employees that request or apply for them
4. Maintain records to establish compliance with the requirements Record that notice was given to employees
5. Records showing that elected benefits were provided

As an employee, what do I need to know?

1. Your employer must notify you of your options for commuter benefits
2. Your employer must notify you of a contact person for transit benefit information
3. You should notify the Office of Wage-Hour if you have a complaint in
   • Not receiving notice of Transit Benefit Options
   • Not receiving the Transit Benefit that you have elected
   Read More Here and Here

Earlier this month, San Antonio’s City Council passed the now-called Sick and Safe Leave Benefits ordinance which, barring any legal action or a decision from the Texas Supreme Court, will go into effect December 1, 2019.

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Some key changes include:

• The effective date is now the same for all sized employers.
• Employees based outside of San Antonio who work more than 50 percent of their time outside the city do not qualify for leave until they perform at least 240 hours of work in the city within a year.
• Paid or unpaid interns taking part in an employer’s or educational institution’s established internship program are now excluded from the definition of employee.
• Employers subject to the Railway Labor Act are now excluded.
• There is now an expanded definition of “family member” which includes any member of a covered employee’s household and makes clear that the concept of “parenthood” should be liberally construed to include legal parents, foster parents, same-sex parents, step parents, those serving in loco parentis, and other persons operating in caretaker roles.
• The amendment does away with 60-day waiting period for employees with a one-year employment contract and replaces it with a permissible 90-day waiting period before new employees may use their leave (although employees still begin accruing leave on date hired).
• The amended ordinance now requires all employers, regardless of size, to provide a “baseline amount” of least 56 hours of paid sick and safe leave per full-time employee per year. The prior ordinance required a “yearly cap” of between 48 and 64 hours depending on the size of the employer.
• Employers cannot request leave verification documentation from the employee until the employee’s fourth consecutive day of using leave, but employers may request verification if they have reason to suspect abuse of leave.
• Employers who obtain medical information as a result of an employee’s request for leave must keep such medical information confidential.
• The statute of limitations is reduced from two years to one year.
• Employees now have the ability to withdraw any complaint filed with the city, and such withdrawal will automatically terminate the investigative process, with no fine being assessed against the employer. This appears to allow an employee and an employer to reach a private resolution on an employee’s complaint during the investigative process. The civil penalty provision was amended to allow a $500 per day civil penalty for employers that “intentionally, knowingly, recklessly or negligently” violate the ordinance with a new offense accruing daily.
• The amended ordinance also specifically states that this leave is not considered to be “wages” but instead should be considered “fringe benefits” as defined by the Texas Labor Code. Curiously, the Texas Labor Code does not specifically define what “fringe benefits” are.

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Under the Paid Family and Medical Leave (PFML) law, most Massachusetts employers are responsible for remitting family and medical leave contributions to the Department of Family and Medical Leave on behalf of their covered individuals. This can include W-2 employees and, in some cases, 1099-MISC contractors.

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The exemption Deadline Extension is December 20, 2019
The application deadline for an exemption from remitting contributions for the period of October 1, 2019, through December 31, 2019, is December 20, 2019. If you apply for an exemption on or before December 20, 2019, and are approved, your exemption effective date will be October 1, 2019. This retroactive approval is only applicable to the first quarter of PFML. Any employer who submits an exemption application after December 20, 2019, will be considered for an exemption beginning in the next quarter, which starts January 1, 2020, and will still be required to remit PFML contributions for the October 1 to December 31 quarter by January 31, 2020.

Application Approval Process
Shortly after your application is submitted, you will receive a provisional approval determination from the DFML. The DFML will then manually review each plan to ensure that your plan meets all of the prescribed requirements for an exemption. If necessary, the DFML will request additional information about your plan to ensure that your submission is complete before December 20, 2019.

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Indiana’s state and county withholding rates, effective Oct. 1, were released by the state revenue department Sept. 23. Read More

Until further notice, employers should continue using the Form I-9 currently available on I-9 Central, even after the expiration date of Aug. 31, has passed.

The agency will provide updated information about the new version of the Form I-9 as it becomes available. Employers must complete Form I-9 for all newly-hired employees to verify their identity and authorization to work in the United States.

The Internal Revenue Service today launched the new Tax Withholding Estimator, an expanded, mobile-friendly online tool designed to make it easier for everyone to have the right amount of tax withheld during the year. Access the Estimator Here

The payroll advance industry is facing an investigation from New York and 10 other state banking regulators into potential violations of state usury and payday lending laws. Read more Here

Colorado employers gained clarity from the Colorado Court of Appeals on a closely watched Colorado wage and hour law issue—when it comes to payout of accrued vacation time upon termination, the written agreement or policy rules. Read More

Employers in Chicago will be required to provide their employees with “fair and equitable” work schedules or face hefty fines under the most expansive predictive scheduling ordinance in the country. Read More

In 2015, the City of Pittsburgh enacted the Paid Sick Days Act (the “Act”), requiring all private employers of full or part-time employees within the City of Pittsburgh to provide paid sick leave benefits. On July 17, 2019, the PA Supreme Court reinstated the Act. Read More

Important deadlines concerning the new Massachusetts Paid Family and Medical Leave (PFML) law are approaching. In June 2019, the Massachusetts legislature passed legislation to delay the start of employer and employee contributions until Oct. 1, 2019 (the PFML Delay). Over the past few weeks, the Massachusetts Department of Family and Medical Leave (Department) issued its final regulations governing the program and addressed questions regarding the program. Read More

The Ohio municipality of Bridgeport, in Belmont County, will introduce an income tax effective August 1, 2019 administered by the Regional Income Tax Agency.

The tax will have an initial rate of 1% and does not have a credit for taxes paid to other municipalities, said the Bridgeport income tax ordinance, which was passed May 21 and posted by the RITA on its website.

Effective July 1, 2019, the State of New Jersey minimum wage is increasing from $8.85/hour to $10.00/hour. This is part of an effort from the state to steadily increase the minimum wage rate to $15/hour by 2024. To assist in this effort, the Valiant team will be working with clients to reflect the changes in their Valiant payroll solution. For more information on this increase and the planned schedule, please see New Jersey’s minimum wage postcard.

This new guide provides Massachusetts employers provides help in preparing for the outlined responsibilities before the law's effective date of Oct. 1, 2019

The City of Philadelphia on July 1, 2019 is reducing its Wage Tax rate. The rate decrease has an immediate impact on all businesses that operate in the city, or that employ Philadelphia residents. The new rates will be:

• 3.8712% (.038712) for residents of Philadelphia
• 3.4481% (.034481) for non-residents

If your business withholds Wage Tax, all paychecks issued with a pay date after June 30, 2019 must reflect the new rates. Read More:

New York State passed an amendment to its election leave law as part of the state’s 2020 budget. This law is now in effect and provides that:

• (i) registered voters must be granted leave of up to three hours to vote without loss of pay;
• (ii) employers must allow employees to take time off to vote at either the beginning or the end of a working shift (but the employer can designate whether an employee takes the voting leave at the beginning or end of the shift);
• (iii) if both the employer and employee agree, the voting leave can take place at a different time;
• (iv) employees who need time off to vote must give their employers at least two working days’ notice of the intent to take leave; and
• (v) employers must post a notice of employees’ rights pursuant to this law at least 10 days before each election.

On June 25, 2019, New York State will be holding primaries. Because primaries are elections that are covered by the election law, all New York State employers must post a notice of rights in accordance with the statute on or before June 15, 2019.

The IRS is unveiling an Early Release Draft of the 2020 IRS Form W-4 , Employee’s Withholding Allowance Certificate, for your information, review, and feedback. Please share it with your tax and payroll practitioner members and colleagues.

If you have comments about this draft of Form W-4, you can submit them to WI.W4.Comments@IRS.gov. Comments should be submitted by July 1, 2019 to be considered timely.

The IRS will also be releasing draft employer instructions related to this draft Form W-4 soon and will be issuing more information related to it. See www.irs.gov/W4 for the latest information on the Form W-4 and see www.irs.gov/Pub15-T for the latest information on the employer instructions.

Do not rely on draft forms, instructions, and publications for filing. We generally do not release drafts of forms until we believe we have incorporated all changes. However, in this case we anticipate it is likely that this form will change before being released as final.

More information can be found in the official IRS news release: IRS, Treasury unveil proposed W-4 design for 2020.

Washington Governor Jay Inslee recently signed two bills addressing sexual harassment and assault in the workplace. Both bills require covered hospitality employers and adult entertainment establishments to provide panic buttons for covered workers.

READ THE FULL STORY

Below you can find a valuable Calculator that will help you to conduct an Impact Analysis on FLSA for your employees:

DOWNLOAD (XLS)

Oregon employers are required to withhold at a flat rate for employees who have not provided a valid state withholding certificate starting in 2020 under a bill signed May 22 by Gov. Kate Brown (D), the state legislature’s website said.

The measure (H.B. 2119) directs employers to withhold at a flat 8% if employees do not provide a withholding certificate, effective Jan. 1, 2020. Since Jan. 1, 2019, new employees and those who change state withholding must provide Form OR-W-4, Oregon Employee’s Withholding Allowance Certificate. The state also allows use of the federal Form W-4 for state purposes if it was provided to the employer before Jan. 1, 2019.

The measure changes the state’s previous practice, which was for employers to withhold as if the employee was single with zero allowances if they did not submit either Form OR-W-4 or a valid federal Form W-4.

The measure also removes some references to the federal withholding system in Oregon’s withholding laws to give the state revenue department “more flexibility in determining the withholding system for Oregon,” also effective Jan. 1, 2020, a summary of the bill said.

Read the Full Bill Here
Download the W-4 Form Here

Frequently asked questions were recently posted by DOR to provide information on exemption requests, registration, contributions and payments for the upcoming paid family and medical leave program for Massachusetts. You’ll find a video tutorial on the webpage that will show an employer how to request an exemption from the new program if they have a program that is equal to or better than the one being offered by the Commonwealth.

July 1, 2019 is the important date – account registration opens in MassTaxConnect and contributions to the program will begin.

Under an amendment to the state’s wage deduction statute, employers in Indiana may now deduct from an employee’s paycheck the rental cost of uniform shirts, pants, and other job-related clothing.

The amendment, Senate Bill 99, was signed by Governor Eric Holcomb on May 1, 2019, and went into effect immediately. Michael Padgett, a Principal in the Indianapolis office of Jackson Lewis, testified before the Senate on behalf of the Indiana Chamber of Commerce in support of the amendment.

Indiana has a very restrictive wage deduction statute that only permits deductions if they are part of a written agreement by both the employer and employee, are personally signed by the employee, and are revocable at any time by the employee. In addition, a deduction may only be made for one of the reasons listed in the statute, such as health insurance premiums and union dues. Two common items that, until recently, were not listed among the allowable deductions were the cost of employee uniforms and the purchase of tools and equipment needed by an employee to complete his or her job. In 2015, the Indiana legislature added the purchase of uniforms and job-required equipment to the list of permissible deductions but did not include the costs of uniform rental, despite the fact that such costs routinely were deducted from paychecks by employers, particularly when the uniforms were provided by a third-party service.

Under the newly-enacted amendment, uniform rental likewise may be deducted from an employee’s wages, with a cap of either $2500 annually or five percent of the employee’s weekly disposable earnings, whichever is less. However, the cost of personal protective equipment required by federal rules may not be deducted. Furthermore, and in what certainly will be a sigh of relief to employers facing potential pre-amendment violations, the amendment legalizes any deduction agreed upon prior to the amendment’s effective date, if it meets the above requirements and the amount deducted was either retained by the employer and credited upon an indebtedness owing to the employer by the employee, or was paid by the employer.

The Office of Special Counsel for Immigration-Related Unfair Employment Practices provides a handy list of "Do's" and "Don'ts" when assessing Social Security Number No-Matches: Read More Here

The Office of Paid Family Leave for Washington D.C. provides a valuable employer toolkit for assessing and calculating Paid Family Leave Rules:

EMPLOYER TOOLKIT

Effective July 1, 2019 employers must begin collection of contributions due under the new Massachusetts Paid Family and Medical Leave Act. (Employees may not take leave until 1/1/2020.)

READ MORE

In important breaking news, the Massachusetts Department of Family and Medical Leave (DFML) has changed its position and has confirmed that employers may receive approval of a private paid family or medical leave plan even if the plan does not provide paid leave benefits until 2021. (via SeyFarth Law Offices): Read More Here

New Jersey's law requires employers in the state to offer pre-tax commuter benefits to employees. While the law is currently in effect, it is not operative until the earlier of: 365 days following the date of enactment (March 1, 2019), or the effective date of rules and regulations that the law directs the Commission of Labor and Workforce Development to adopt:  Read More Here

After years of legal wrangling and a change in administration, we may soon see adjustments to overtime exemption rules under the Fair Labor Standards Act (FLSA). On March 7, 2019, the Department of Labor (DOL) released proposed changes to the minimum salary threshold requirements that an employee must earn in order to be exempt from FLSA overtime rules.  Read More Here

• The Internal Revenue Service today announced the tax year 2019 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2018-57 provides details about these annual adjustments. The tax year 2019 adjustments generally are used on tax returns filed in 2020.
• The tax items for tax year 2019 of greatest interest to most taxpayers include the following dollar amounts:
  • The standard deduction for married filing jointly rises to $24,400 for tax year 2019, up $400 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,200 for 2019, up $200, and for heads of households, the standard deduction will be $18,350 for tax year 2019, up $350.
  • The personal exemption for tax year 2019 remains at 0, as it was for 2018, this elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act.
  • For tax year 2019, the top rate is 37 % for individual single taxpayers with incomes greater than $510,300 ($612,350 for married filing jointly). The other rates are:
  • 35%, for incomes over $204,100 ($408,200 for married filing jointly);
  • 32 % for incomes over $160,725 ($321,450 for married filing jointly);
  • 24 % for incomes over $84,200 ($168,400 for married filing jointly);
  • 22 % for incomes over $39,475 ($78,950 for married filing jointly);
  • 12 % for incomes over $9,700 ($19,400 for married filing jointly).
  • The lowest rate is 10 % for incomes of single individuals with incomes of $9,700 or less ($19,400 for married filing jointly).
  • For 2019, as in 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.
  • The Alternative Minimum Tax exemption amount for tax year 2019 is $71,700 and begins to phase out at $510,300 ($111,700, for married filing jointly for whom the exemption begins to phase out at $1,020,600). The 2018 exemption amount was $70,300 and began to phase out at $500,000 ($109,400 for married filing jointly and began to phase out at $1 million).
  • The tax year 2019 maximum Earned Income Credit amount is $6,557 for taxpayers filing jointly who have three or more qualifying children, up from a total of $6,431 for tax year 2018. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds and phase-outs.
  • For tax year 2019, the monthly limitation for the qualified transportation fringe benefit is $265, as is the monthly limitation for qualified parking, up from $260 for tax year 2018.
  • For calendar year 2019, the dollar amount used to determine the penalty for not maintaining minimum essential health coverage is 0, per the Tax Cuts and Jobs act; for 2018 the amount was $695.
  • For the taxable years beginning in 2019, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements is $2,700, up $50 from the limit for 2018.
  • For tax year 2019, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,350, an increase of $50 from tax year 2018; but not more than $3,500, an increase of $50 from tax year 2018. For self-only coverage, the maximum out-of-pocket expense amount is $4,650, up $100 from 2018. For tax year 2019, participants with family coverage, the floor for the annual deductible is $4,650, up from $4,550 in 2018; however, the deductible cannot be more than $7,000, up $150 from the limit for tax year 2018. For family coverage, the out-of-pocket expense limit is $8,550 for tax year 2019, an increase of $150 from tax year 2018.
  • For tax year 2019, the adjusted gross income amount used by joint filers to determine the reduction in the Lifetime Learning Credit is $116,000, up from $114,000 for tax year 2018.
  • For tax year 2019, the foreign earned income exclusion is $105,900 up from $103,900 for tax year 2018.
  • Estates of decedents who die during 2019 have a basic exclusion amount of $11,400,000, up from a total of $11,180,000 for estates of decedents who died in 2018.
  • The annual exclusion for gifts is $15,000 for calendar year 2019, as it was for calendar year 2018.
  • The maximum credit allowed for adoptions is the amount of qualified adoption expenses up to $14,080, up from $13,810 for 2018.

The monthly limit for the qualified transportation fringe benefits and for qualified parking is to increase to $265 from $260 while other tax benefits are to increase slightly in 2019 because of inflation adjustments, the IRS said in Revenue Procedure 2018-57.

• The general rule is that an individual is an independent contractor if the payer (employer) has the right to control or direct only the result of the work and not what will be done and how it will be done. The earnings of a person who is working as an independent contractor are subject to Self-Employment Tax. An independent contractor is self-employed. To find out what the related tax obligations are, visit the Self-Employed Tax Center.
• An Individual is not an independent contractor if they perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed. Facts that provide evidence of the degree of control and independence fall into three categories:
  • Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
  • Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how workers are paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
  • Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?
• Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. The key is to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination.
• If an employer-employee relationship exists the individual is not an independent contractor and earnings may be subject to FICA (Social Security tax and Medicare) and federal/state income tax withholding. For more information on determining Independent Contractors or Employees status click on the link.

The IRS and Valiant Solutions Inc., would like to remind taxpayers to look into whether they need to adjust their paycheck withholding. Taxpayers who do need to adjust their withholding should submit a new Form W-4, Employee’s Withholding Allowance Certificate to their employers. Taxpayers can use the updated Withholding Calculator on IRS.gov to do a quick “paycheck checkup” to check that they’re not having too little or too much tax withheld at work.

Having a completed 2017 tax return and their most recent pay stub can help taxpayers work with the Withholding Calculator to determine their proper withholding for 2018 and avoid issues when they file next year. Taxpayers may also need to determine if they should adjust their state or local withholding. They can contact their state's department of revenue to learn more.

The IRS and Valiant Solutions Inc., would like to remind taxpayers the 2017 Tax Cuts and Jobs Act (TCJA) made amounts for moving expenses reimbursed or paid by an employer for most employees taxable in 2018. Under Notice 2018-75 reimbursements paid to an employee in 2018 for qualified moving expenses incurred in a prior are not subject to federal income or unemployment taxes. Employers that have already treated reimbursements or payments as taxable can follow the normal employment tax adjustment and refund procedures. See Publication 15, section 13, or Form 941-X and its instructions for details. Updates on this and other TCJA provisions can be found at IRS.gov/taxreform.

Last year’s tax reform legislation replaced the graduated corporate tax structure with a flat 21 percent corporate tax rate. This new maximum tax rate for corporations is effective for tax years beginning after Dec. 31, 2017. A corporation with a fiscal year that includes Jan. 1, 2018, will pay federal income tax using what is called a blended tax rate. They will not use the flat 21 percent tax rate for their entire fiscal year. To calculate their blended tax rate, these corporations will:

• First calculate their tax for the entire taxable year using the tax rates that were in effect prior to the Tax Cuts and Jobs Act.
• Then calculate their tax using the new 21 percent rate.
• Proportion each tax amount based on the number of days in the taxable year when the different rates were in effect.
• Take the sum of these two amounts, which is the corporation’s federal income tax for the fiscal year.

The blended rate applies to all fiscal year corporations whose fiscal year includes Jan. 1, 2018. Fiscal year corporations that have already filed their federal income tax returns that do not reflect the blended rate may want to consider filing an amended return. This change will affect many tax forms and instructions that corporations use. For a complete list, see the 2017 Fiscal Tax Year Filers Must Use Blended Corporate Tax Rates page on IRS.gov. More information: Notice 2018-38

Valiant Solutions Inc., would like to remind you that any employer in New York State is subject to the Spread of Hours regulation. Originally released in the Hospitality Wage Order in 2011. When and employee’s work day is spread over 10 or more hours in a day that employee is entitled to 1 hours pay at the basic minimum wage for your region and industry. The spread of hours for any day includes working time plus time off for meals plus intervals off duty. New York State answered a Frequently Asked Question (FAQ) as it relates to all other industries and confirmed that any non-exempt employee that works a split shift or a shift that exceeds 10 hours in one day is due the “extra” pay. these hours do not count towards hours worked for overtime.

Only the U.S. Virgin Islands employers will be faced with a FUTA tax credit reduction for 2018. How it Works Generally the FUTA tax rate is 6% of the first $7,000.00 an employee earns for the year. The IRS offers a credit on that tax of 5.4% making the actual tax rate 0.6% of the first $7,000.00 an individual earns in a year. If there is a high rate of unemployment in a particular state the state borrows funds from the FUTA to help pay unemployment premiums to unemployed individuals. The states are responsible for repaying these loans timely and completely. If these loans are not paid back timely or completely the IRS assess a reduction of the credit (5.4%) and then the businesses in that state must pay a higher rate on each employee’s first $7,000.00 earned annually. Last year, 2017, California and the U.S. Virgin Islands both had reductions to the tax credit and employers paid more in taxes in those states. For 2018 only U.S. Virgin Islands Employers will pay the elevated rate.

• The credit is available for wages paid in taxable years beginning after December 31, 2017, and before January 1, 2020.
• Some employers can claim the credit retroactively to the beginning of their first taxable year beginning after December 31, 2017, if they meet the terms of a transition rule on or before December 31, 2018.
• To be eligible for the credit, an employer must have a written policy in place that includes:
  • At least two weeks of paid family and medical leave annually to full-time employees, prorated for part-time employees.
  • Pay for family and medical leave that’s at least 50 percent of the wages normally paid to the employee.
• Generally, for tax year 2018, the employee’s 2017 compensation from the employer must be $72,000 or less.
• The credit ranges from 12.5 percent to 25 percent of wages paid during an employee’s leave.
• For purposes of this credit, family and medical leave includes leave for one or more of the following reasons:
  • Birth of an employee’s child and to care for the child. Placement of a child with the employee for adoption or foster care.
  • Care for the employee’s spouse, child or parent who has a serious health condition.
  • A serious health condition that makes the employee unable to do the functions of their position.
  • Any qualifying need due to an employee’s spouse, child or parent being on covered active duty in the Armed Forces. This includes notification of an impending call or order to covered active duty.
  • To care for a service member who’s the employee’s spouse, child, parent or next of kin.

• Credit amount. The new law increases the child tax credit from $1,000 to $2,000. Eligibility for the credit has not changed. As in past years, the credit applies if all of these apply:
• the child is younger than 17 at the end of the tax year, December 31, 2018
• the taxpayer claims the child as a dependent
• the child lives with the taxpayer for at least six months of the year
• Credit refunds. The credit is refundable, now up to $1,400. If a taxpayer doesn’t owe any tax before claiming the credit, they will receive up to $1,400 as part of their refund.
• Earned income threshold. The income threshold to claim the credit has been lowered to $2,500 per family. This means a family must earn a minimum of $2,500 to claim the credit.
• Phaseout. The income threshold at which the child tax credit begins to phase out is increased to $200,000, or $400,000 if married filing jointly. This means that more families with children younger than 17 qualify for the larger credit.
• Dependents who can’t be claimed for the child tax credit may still qualify the taxpayer for the credit for other dependents. This is a non-refundable credit of up to $500 per qualifying person. These dependents may also be dependent children who are age 17 or older at the end of 2018. It also includes parents or other qualifying relatives supported by the taxpayer.

The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000. The limit on annual contributions to an IRA, which last increased in 2013, is increased from $5,500 to $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $6,000.

A recent article on collecting unions dues outlines a US Supreme Court ruling that prohibited unions from collecting fees from non-member public workers. Since dues are required deductions they do not fall into the heavily regulated category of permissible deductions and is usually calculated just after taxes and before garnishments. Is this particular case contract employers were taking the dues from employees in their weekly checks, both union and non-union, and not paying the benefits funds directly to the unions, this causes the unions to be short funded and may delay employees receiving benefits.

To circumvent this potential financial disaster unions have suggested using pay cards for member contract employees so when they are paid the benefits are loaded directly onto a pay card and the unions can take the payments from the pay cards for direct timely payment. While the pay card suggestion is viable, employers can also use direct deposit to send funds to a third party eliminating the additional cost of cobranded payment cards. Valiant offers many options for financial solutions including direct deposit, ACH transfers and third-party checks. Valiant can take any deduction and create a payment solution that fits your business and relieves some of the burden of reconciliation.

The IRS announced that eligible employer who provided paid family and medical leave to their employees may qualify for a new business credit for tax years 2018 and 2019. In Notice 2018-71 the IRS provides detailed guidance on the new credit in a question and answer format. The credit was enacted by the 2018 Tax Cuts and Jobs Act (TJCA). The notice clarifies how to calculate the credit including the application of special rules and limits. Only Paid family and medical leave provided to employees whose prior-year compensation was at or below a certain amount qualify for the credit. Generally for tax year 2018, the employees 2017 compensation from the employer must be $72,000.00 or less. Updates on this and other TCJA provisions can be found at IRS.gov/taxreform.

Valiant Solutions Inc., would like to remind you that your business may be eligible for a tax credit if you hire a qualified veteran. Both New York state and the IRS allows for a credit when your business hires qualified veterans.
For New York State:

1. The credit is available to employer for hiring and employing, for not less than 1 year and not less than 35 hours each week, qualified veterans, the be eligible, a qualified veteran must now begin employment prior to January 1, 2020.
2. For more information on this credit, see: TSB-M-13(9)C, (8)I, Hire a Veteran Credit TSB-M-16(8)C, (6)I, Summary of Changes to Existing Tax Credits Enacted as Part of the 2016-2017 New York State Budget

For the IRS:

1. A member of a family receiving assistance under the Supplemental Nutrition Assistance Program (SNAP) (food stamps) for at least 3 months during the first year of employment.
2. Unemployed for a period totaling at least 4 weeks (whether or not consecutive) but less than 6 months in the 1-year period ending on the hiring date.
3. Unemployed for a period totaling at least 6 months (whether or not consecutive) in the 1-year period ending on the hiring date.
4. A disabled veteran entitled to compensation for a service-connected disability hired not more than one year after being discharged or released from active duty in the U.S. Armed Forces.
5. A disabled veteran entitled to compensation for a service-connected disability who is unemployed for a period totaling at least six months (whether or not they are consecutive) in the one-year period ending on the hiring date.
6. See IRS Notice 2012-13 (PDF) for more detailed information.

For more information about taking advantage, visit Valiant's partner, Walton Management Services.

Many owners of sole proprietorships, partnerships, trusts and S corporations may deduct 20 percent of their qualified business income. The new deduction -- referred to as the Section 199A deduction or the qualified business income deduction -- is available for tax years beginning after Dec. 31, 2017. Eligible taxpayers can claim it for the first time on the 2018 federal income tax return they file next year.

The fair-market value amount that is used to qualify for cents-per-mile valuation of personal use is to increase for cars and remain the same for trucks in 2019, according to Bloomberg Tax calculations.

• The cents-per-mile rule may not be used for employer-owned passenger cars that are available for personal use by employees in 2019 with a fair-market value of more than $15,700, up from $15,600 in 2018, or for trucks and vans with fair-market values of more than $17,600, unchanged from 2018.
• The truck fleet value is $23,100 in 2019, unchanged from 2018, while the car fleet value is to increase $20,900 from $20,600.
• The amounts for 2019 were made using the consumer price index for October 2018, which was released Nov. 14 by the Labor Department’s Bureau of Labor Statistics. The calculations also were based on Internal Revenue Service regulations.

Reminder to Everyone. HSA allows for a $1,000.00 catch up for those participants over 55 years of age. Once the 2018 limit is reached of $6,900 Family and $3450 individual, those participants may contribute the catch-up amount. 2019 limits are going to be Family: $7,000.00, Individual: $3,500.00 Catch-up: $1,000.00.

A trending Human Resources initiative has led the way for many state and local municipalities to enact various Sick and Safe Leave policies. Puerto Rico was the first territory to enact a guaranteed leave policy in 1995 that is still in effect, currently each employee accrues 1 day of paid leave each month. Since then multiple jurisdictions have enacted similar policies. Sick and Safe Leave policies in general are for the benefit of the employee to ensure a work life balance is met. Employees can take requested time off for the care of themselves or an immediate family member’s illness or legal issue up to the locally allowed limit. Employees usually have an accrual limit and a maximum rollover amount for each year. Most policies even allow an employer to use an existing PTO policy providing it gives an equal or greater benefit to the employee. The following states have either a statewide policy or a local provision, links are included.

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Arizona: AZ Paid Sick Leave Caifornia: CA Paid Sick leave FAQs Connecticut: CT Sick Leave Guidance Illinois: Cook County, IL Paid Sick Leave Law Maryland: MD Paid Sick Leave FAQ Massachusetts: MA Paid Sick Leave

Minnesota: Minneapolis, MN Paid Sick Leave, St. Paul, MN Paid Sick Leave, Duluth, MN Paid Sick Leave New Jersey: NJ Paid Sick Leave New York: New York City, NY Paid Sick Leave FAQ/a> Oregon: OR Paid Sick Leave, Portland, OR Paid Sick Leave Pennsylvania: Philadelphia, PA Paid Sick Leave

Puerto Rico: PR Paid Sick Leave Catastrophic leave: PR DOL Rhode Island: RI Sick and Safe Leave Texas: Austin, TX Paid Sick Leave Vermont: VT Paid Sick Leave Washington: WA Paid Sick Leave Washington DC: DC Sick Leave

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Some jurisdictions have more expansive provisions for Sick and Safe Leave requiring employers to complete additional steps to ensure compliance. New York City (NYC) recently changed some policies surrounding the Earned Sick and Safe Leave Act (ESSTA). Employers are now required to notify employees in their native language providing a notice has already been translated to that language and at least 5% of the work population speaks the same language or the employer is primarily communicating to the employee in that language. Employers are required to have a single written policy with specific wording outlining the time off requesting policies. If the employer uses an alternate PTO plan, such as vacation, to cover the ESSTA benefit the policy needs to adhere to the minimum requirements of the act. The general PTO policy must also expressly state that time taken off may be used for any of the law’s covered purposes and must also include all other required written policy provisions and cannot include any provisions inconsistent with or prohibited by the law.

Valiant is committed to quality processing platforms that allow employers to stay compliant in this everchanging regulation landscape. Both Vault and Vision are highly customizable, and the program features allow the end user to adjust PTO policies on the fly for maximum regulation compliance. PTO can accrue when you want and can roll over in adherence with your predetermined policies as well as jurisdictional regulations. Valiant also partners with a valuable resource in HR Support Center. HR Support Center has multiple features to help employers stay compliant like the Ask a Pro feature can give a researched answer in 24 hours on any topic. HR Support center also has a library to help in writing you policies or handbooks.

We are highly committed to delivering the best product and customer service experience possible. If you have more questions on PTO policies or HR Support Center, please reach out to your Customer Service Representative.

Valiant Solutions Inc. and the IRS would like to remind you that Taxpayers don’t typically think about their filing status until they file their taxes. However, a taxpayer’s status could change during the year, so it’s always a good time for a taxpayer to learn about the different filing statuses and which one they should use.

It’s important a taxpayer uses the right filing status because it can affect the amount of tax they owe for the year. It may even determine if they must file a tax return at all. Taxpayers should keep in mind that their marital status on Dec. 31 is their status for the whole year. Sometimes more than one filing status may apply to taxpayers. When that happens, taxpayers should choose the one that allows them to pay the least amount of tax.

Here’s a list of the five filing statuses and a description of who claims them:

• Single. Normally this status is for taxpayers who aren’t married, or who are divorced or legally separated under state law.
• Married Filing Jointly. If taxpayers are married, they can file a joint tax return. When a spouse passes away, the widowed spouse can usually file a joint return for that year.
• Married Filing Separately. A married couple can choose to file two separate tax returns. This may benefit them if it results in less tax owed than if they file a joint tax return. Taxpayers may want to prepare their taxes both ways before they choose. They can also use this status if each wants to be responsible only for their own tax.
• Head of Household. In most cases, this status applies to a taxpayer who is not married, but there are some special rules. For example, the taxpayer must have paid more than half the cost of keeping up a home for themselves and a qualifying person. Taxpayers should check all the rules and make sure they qualify to use this status.
• Qualifying Widow(er) with Dependent Child. This status may apply to a taxpayer if their spouse died during one of the previous two years and they have a dependent child. Other conditions also apply.

• Qualified Transportation
  The new law also disallows deductions for expenses associated with qualified transportation fringe benefits or expenses incurred providing transportation for commuting. There is an exception when the transportation expenses are necessary for employee safety.
• Bicycle Commuting Reimbursements
  Under the new law, employers can deduct qualified bicycle commuting reimbursements as a business expense. The new tax law suspends the exclusion of qualified bicycle commuting reimbursements from an employee’s income. This means that employers must now include these reimbursements in the employee’s wages.
• Qualified Moving Expenses Reimbursements
  Employers must now include moving expense reimbursements in employees’ wages. The new tax law suspends the exclusion for qualified moving expense reimbursements. There is one exception as members of the U.S. Armed Forces can still exclude qualified moving expense reimbursements from their income if they meet certain requirements.
• Employee Achievement Award
  Special rules allow an employee to exclude achievement awards from their wages if the awards are tangible personal property. An employer also may deduct awards that are tangible personal property, subject to certain deduction limits. The new law clarifies the definition of tangible personal property.