Client Alerts Archives - Page 17 of 21

CLIENT ALERT: Ohio Pays Remaining Recession-Era Debt

Kathleen Hargrove on September 2, 2016

Earlier this week, Ohio paid the remaining $271 million owed on the state’s recession-era debt to the federal government. As a result, employers will now save hundreds of millions in tax penalties in January!

The loan was initially taken to cover benefits to jobless workers. Without sufficient reserves when the recession hit in December 2007, Ohio and many other states were forced to borrow from a federal loan fund to continue paying unemployment compensation.

Ohio businesses have been paying higher federal unemployment taxes since 2012 under a mandatory repayment system. These funds have been used to pay down the loan’s principal while the state has paid interest on the loan. The debt reached $3.4 billion at one point.

Businesses will repay the state through a one-time surcharge of about $50 per employee in 2017. That’s $76 less than the $126 per employee maximum in federal tax penalties they faced if the loan had not been repaid.

We hope this information has been helpful to you. If you think this change could affect you or you have any further questions, please contact your Whalen & Company representative.

Source: http://www.dispatch.com/content/stories/local/2016/08/30/state-pays-off-debt-will-save-businesses-from-addtional-taxes.html

CLIENT ALERT: Prospective Billing True-Up Process Deadline

Kathleen Hargrove on August 9, 2016

Last July, the Ohio Bureau of Workers’ Compensation (BWC) modernized their billing system and switched to Prospective Billing. This change has affected private employers, and includes a new true-up process to reconcile differences in premiums paid. The reporting change has been in effect since July 1, 2015, with installment payments made during the year. The deadline to submit this annual true-up report for the reporting period of 7/1/2015 thru 6/30/2016 is fast approaching.

The true-up report MUST be completed and payment received no later than next Monday, August 15. Please allow two business days for payments to be posted by BWC to your account.

What is the true-up process?

BWC provides worker’s compensation coverage based on estimated payroll
- Installment payments were required to be made during the reporting year, with the installment total estimated using prior year reported payroll
- At the policy year end, employers must report their actual payroll for the prior policy year
- Employers will either pay any shortage or receive a refund for any overage

What happens if the true-up is not completed before the deadline?

BWC will remove employers from their current rating plan or discount programs
Employers with outstanding true-ups will be ineligible for participation in future rating plans or discount programs
- Employers will be eligible again after all outstanding true-ups are submitted
BWC will put any plans in a “lapse” category
- Claims during the lapsed period will not be covered by workers compensation

As an additional reminder, the next installment payment for the NEW reporting year will be due 8/31/2016. This payment is separate from the True-up reporting for the PRIOR reporting year that is due 8/15/2016.

We hope this information has been helpful to you. If you think this change could affect you or you have any further questions, please contact your Whalen & Company representative.

Source: https://www.bwc.ohio.gov/employer/brochureware/prospectivebilling.asp

CLIENT ALERT: ACA Marketplace Notices for Employers Begin This Year

Kathleen Hargrove on June 16, 2016

In 2016, employers will begin receiving notices about employees enrolled in the Health Insurance Marketplace that was introduced with the Affordable Care Act (ACA).

Notices will be sent to employers via mail from the Federally-Facilitated Marketplace (FFM).

If I Receive a Notice, What Does That Mean?

If you receive a notice from the FFM, you have at least one employee who received advanced premium tax credits for Health Insurance Marketplace coverage for at least one month in 2016. That employee listed your business and address as their employer.

As applicable large employers are typically required under the ACA to provide affordable health insurance to their employees, receipt of this notice may mean your business has a tax liability under the Employer Shared Responsibility Payment mandate.

The notice itself does not determine if your business owes the Employer Shared Responsibility Payment, but is an indication that you might be liable. The IRS will determine which employers are subject to tax liability.

What Should My Business Do If We Receive a Notice?

If you receive a notice from the FFM you should determine if your business has a tax liability for this employee’s marketplace coverage.
- Questions to ask include:
  - Is my business considered an applicable large employer and subject to ACA health insurance mandates?
    - If so, does our health coverage comply with ACA requirements?
  - Is this employee full time?
  - Is the employee also enrolled in our health coverage?

If you determine you would like to appeal the notice, your business has 90 days from the date of notice to request an appeal from the Marketplace.

According to the Center for Consumer Information and Insurance Oversight (CCIIO), a division of Centers for Medicare & Medicaid Services (CMS), and the “employer notice” program will be phased in during 2016 with plans to expand and improve the notice program moving forward.

We hope this information has been helpful to you. If you receive a marketplace notice and have questions about your tax liability, please contact your Whalen & Company representative.

Sources:

CLIENT ALERT: Final Overtime Rule Will Affect 4.2 Million Workers

Kathleen Hargrove on May 18, 2016

The United States Department of Labor (DOL) issued the final update to its proposed “Overtime Rule” this week, a revision to the Fair Labor Standards Act.

The salary threshold for white collar exemptions will be increased to $47,476 from the current threshold of $23,660, effective December 1, 2016, affecting 4.2 million U.S. workers. Vice-President Joe Biden is in Columbus, Ohio today to share this announcement.

Key Overtime Rule Changes:

Full-time salaried workers earning less than $47,476 annually will be eligible for overtime pay (previous threshold was $23,660).

The Highly Compensated Employee (HCE) annual compensation threshold will be increased to $134,004 from $100,000 for full-time salaried workers.

Employers have six months to prepare for the change, which will be effective December 1, 2016.

Bonuses, commissions and incentive pay for non-HCE employees may be counted toward 10% of the threshold if paid at least quarterly.

The overtime salary threshold will be updated every three years based on wage growth, to be posted by DOL 150 days before effective date.

Duties test for white collar salaried workers will remain unchanged.

The DOL is proposing the following ways for businesses to comply with these changes:

Pay salaried employees earning less than $47,476 annually time-and-a-half for overtime work.
Raise workers’ salaries above the new $47,476 annual threshold.
Limit hours worked for salaried employees earning less than the threshold to 40 hours per week.

Webinars on the new overtime rule will be conducted by the DOL in May and June. See the scheduled webinars and register here.

According to the DOL, this exemption threshold has not been updated since 2004 and was due to be revised as “President Obama directed the Secretary of Labor to update the FLSA’s overtime pay protections and to simplify the overtime rules for employers and workers alike.”

For more details on this update rule, check out the DOL’s Overview and Summary and Small Business Guide.

We hope this information has been helpful to you. If you have questions about how the proposed overtime rule affects your business, please contact your Whalen & Company representative.

Sources:

Do you need to file a 2015 gift tax return by April 18?

Kathleen Hargrove on April 7, 2016

You generally need to file a gift tax return for 2015 if, during the tax year, you made gifts:

That exceeded the $14,000-per-recipient gift tax annual exclusion (other than to your U.S. citizen spouse)
That you wish to split with your spouse to take advantage of your combined $28,000 annual exclusions, or
Of future interests – such as remainder interests in a trust – regardless of the amount.

If you transferred hard-to-value property, such as artwork or interests in a family-owned business, consider filing a gift tax return even if you’re not required to. Adequate disclosure of the transfer in a return triggers the statute of limitations, generally preventing the IRS from challenging your valuation more than three years after you file.

There may be other instances where you’ll need to file a gift tax return – or where you won’t need to file one even though a gift exceeds your annual exclusion. Please contact your Whalen & Company representative for details.

Category: Client Alerts

News & Tech Tips

CLIENT ALERT: Ohio Pays Remaining Recession-Era Debt

CLIENT ALERT: Prospective Billing True-Up Process Deadline

CLIENT ALERT: ACA Marketplace Notices for Employers Begin This Year

CLIENT ALERT: Final Overtime Rule Will Affect 4.2 Million Workers

Do you need to file a 2015 gift tax return by April 18?