Iowa workforce development tax announcement reflects a change in distributions to employer tax accounts and Iowa Reserve Fund. The Reserve Fund will be used to pay unemployment benefits and fund Iowa Workforce Development centers.
NPRC Invites Participation in IRS Industry Issue Resolution Project:
New IRS Form 941 Schedule Would Facilitate Reconciliation of Mergers, Acquisitions and Other Organizational Changes
The IRS and SSA reconcile employer filings of annual Forms W-2 to the quarterly employment tax returns filed during the year. Normally, the total wages and taxes reported on an employer's quarterly Forms 941 are equal to the total wages and taxes reported on their annual Forms W-2. However, this reconciliation is complicated when an employer makes an entity change, such as an acquisition, merger or spin-off. When an employer is involved in a mid-year organization change, W-2s are often filed under one federal employer identification number (FEIN), while employment tax deposits and returns (Forms 941) are filed under a different FEIN.
Employers involved in such transactions sometimes receive assessments for taxes already paid under another FEIN. Don't blame the IRS, though they do amazingly well, considering employers are not required to provide specific information that would enable the IRS to reconcile the accounts in question. Employers currently letters of explanation to their IRS Form 941 for the period in question. Freeform letters are often ambiguous and difficult for the IRS to interpret.
The National Payroll Reporting Consortium (NPRC) is sponsoring an IRS Industry Issue Resolution project to clarify and improve procedures for reporting employment taxes in the context of mergers, acquisitions, consolidations, reorganizations and other restructurings. The proposal in a nutshell, is to create a new optional 941 schedule to report such transactions, which could be electronically filed separately or with Form 941
he proposed new schedule would identify the organizations, the nature of the transaction and effective date, and reconciliation details, such as the percentage of employment tax liabilities to transfer to the successor company. NPRC is inviting input and participation from all interested organizations. Contact NPRC at (NPRC@NPRC-inc.org).
Virgina Department of Taxation -
New Payment Schedule and EFT Mandate
Effective July 1, 2004, payroll service organizations who remit VA tax withholding on behalf of 100 or more employers are required to remit such withholding electronically, via ACH credit.
Tax Amnesty Program
Virginia's Department of Taxation announced a tax amnesty program, giving individuals and businesses that have fallen behind on their state taxes a chance to catch up - penalty free.
New IRS Reporting Agents (RAF) Page
A new IRS RAF website provides comprehensive information about Reporting Agents, including key Revenue Procedures, publications, authorization forms, related links and details on how the RAF works.
NASWA UI Technology Conference
NPRC presented a session at NASWA's UI Technology Conference to reinforce the ITSC study of Third Party Data Exchanges with SESAs (Inadequacies and inefficiencies of the state systems). As a result, an ITSC grant has been funded to develop a pilot for exchanging data between state workforce agencies and employer agents through standard formats and media.
Georgia Department of Revenue -
New Payment Schedule and EFT Mandate
The new EFT threshold and payment schedule (which closely parallels the federal schedule) is effective April 1, 2004, for employers with withholding tax liabilities over $50,000 (was $120K) during the look-back period (July-June). The agency is also considering an e-file program using XML.
- For paydays occurring on Wednesday, Thursday, or Friday, the taxes must be remitted on or before the following Wednesday or, in the case of a holiday, the next banking day thereafter;
- For paydays occurring on Saturday, Sunday, Monday, or Tuesday, the taxes must be remitted on or before the following Friday
- Employers whose tax withheld exceeds $100,000
must be remitted by the next banking day.
IRS Announces Elimination of Magnetic Tape Programs
The IRS has issued correspondence to all Reporting Agents announcing the elimination of magnetic tape programs for filing Forms 941 and 940. The last date that any tapes may be accepted is February 9, 2004.
Massachusetts Department of Revenue Electronic Filing Mandate
Members of the NPRC participated in a conference call with MA DOR technical staff, to prepare for the electronic filing mandate, which is effective in July. DOR provided a helpful Q&A document, which includes the URL for the development website.
Multnomah County, Oregon residents passed Measure 26-48 which established a personal income tax on County residents. The tax was effective January 1, 2003. Multnomah County employers may withhold the tax from wages of County resident employees.