Health Care, Cell Phones & Worker Status
After President Obama signed the healthcare bill into law, certain changes to taxes on the types of health insurances businesses can provide to their employees have occurred.
In 2012 Employers should begin tracking the value of health care benefits for employees.
The annual value must be record on employee W2 statements. Deluxe Payroll can assist you with the annual value recorded per each employee at year end or by tracking the per pay for each employee receiving healthcare benefits provided by the employer. Start your tracking January 1, 2012 so that your employee W2s will accurately reflect correct annual values at year end 2012. Call your Customer Service Representative today to discuss your preferred tracking method.
The IRS has issued guidance on the tax treatment of business cell phones for use by employees. Effective January 1, 2010 when an employer provides a cell phone to an employee “primarily for noncompensatory business reasons” the value can be treated as a working condition fringe benefit under IRC 132(d) and is excludable from the employee’s income without further substantiation. For further guidance on the tax treatment of employer provided cell phones please visit http://www.irs.gov/irb/2011-38_IRB/ar07.html
The IRS has just released a revised form SS-8 Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. As an employer be very careful to make an informed decision on your future paid employees or contractors. When in doubt as to whether a candidate performing services for your business should be classified as a W2 worker or 1099 Contractor, use this form to obtain a definitive answer directly from the IRS. Receiving a response from the IRS can take as short as several weeks or up to six months for a determination. While you are waiting the candidate must be treated as a W2 employee with all appropriate wages and taxes reported and withheld. You can locate this form at www.irs.gov