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California Payroll Conference
Year End 2014Becky [email protected] deskCalifornia Payroll Conference
September 11 and 12, 2014
AgendaIRS and CA Updates for 2015ACA updateCA Changes & UI fund InsolvencyAll State UI outlook for 2015Legislative Outlook for 2015Communication PlanYE Checklist
Federal and CA updates for 2015(check APA website for updates!)FICA Base (ER)$119,100? (6.2%)=$7,384.20CA SDI$101,636? (1.0%)401(k) $ 17,500 50+ $5,500 Mileage$ 0.565? (2013 rate)Adoption Asst$ 13,190?Qualified Parking$ 250?Transit Pass$ 130? ($245 in 2013!)Foreign earned income exclusion $99,200?CA supplemental rates unchanged in 2015?
ACA: what payroll needs to knowOn January 1, 2015 employers averaging or expected to average 100 or more FT employees (or FT equivalents) will be subject to the coverage mandate. Payroll and HR will be dealing with data collection around:Control group aggregation FT time statusLook back periodsIn 2016, the mandate drops to 50 FT or FT equivalentsReporting the cost of healthcare on a W2 (code DD)
ACA LingoFull-timeWorkers employed at least 130 hours per monthFTEThose employed that did not work 130 hours a month. For ACA adding their total hours for the month (using up to 120 hours per employee) and divide this amount by 120. ACA Lingo: Full Time and FTE example
ACA LingoPay: Company chooses to pay the penalty tax of $2000 a year per employee instead of providing adequate and affordable healthcare coverage
Play: Company chooses to offer compliant coverage, BUT that coverage is unaffordable to certain employees, the company will pay $3000 a year for each full time employee who obtains government subsidized coverage on the exchange
ACA LingoAdequate: The offered coverage must cover on an actuarial basis at least 60% of the value of benefits available under the plan. For example, if the plan covers 50% of hospitalization cost, it is NOT adequate..
Affordable: If the employees share of premiums does not exceed 9.5% of an employees household income. For example, if the FT EE earns $50k, the employee cannot pay more than $395.83 toward monthly premiums ($50k x 9.5%/12).
ACA and PayrollNew Forms1095 A 1095 B1095 C1094 A1094 B1094 CW2 Box 14, Code DD
FUTA tax rate basics
2014 FUTA credit reduction states BCR rates updated by DOL on 28 July 2014
FUTA tax rate basics
FUTA wage base increase
2014 SUI financing at a glance
CA SUI Fund still insolventThe Unemployment Insurance (UI) fund has a revised projected deficit of $9.5 billion by the end of 2014, according to a new report released by the Employment Development Department.
Sacramento has a number of groups interesting in changing UI wagebase and in ways to pay off the debt.
When employees change their work state
Unemployment insurance integrity
Tax rate management Penalty rates for late filers/payers
Ernst & Young LLPs 2014 pick of six to watch for future cost increases
Communication Plan
Communication PlanTo Joe/Jane EmployeeUpdate your W2 mailing addressDate of last paycheck for 2014When to expect W22015 W4s (exempts)What to do if you think youre W2 is wrongWhat to do if W2 is lost2015 limitsFICACA SDIMileage401(K).50+ catch upFlexible spending deadlines and new electionsMemo distribution: email, common areas, website, stuffer, inner office mailer
Communication PlanCommunication with AP for reportable reimbursements (those that initially didnt go through payroll.taxable relocation, life insurance, exec perks)Communication with ExecutivesMake em feel special, send them a separate letter of information, set up a particular person to deal with exec or exec tax preparer
Communication Plan for 2015IRS and state changes happen through out the year, how effectively are you communicating them to employees?
Year End Checklist for youCreate a checklist for your team that includes What you needWho is responsible for getting it to youThe date you need itEnsure accountability with calendars and emails
Payroll Dept checklistVerify all stop pymts, voids and manual checks have been processedSchedule an out of sequence payroll for any adjustments in advanceSchedule a bonus payroll!Recon 401(k) and the employer match, true up if needed1099 processing? (if you are responsible for A/P)Backup your database (in-house systems)
Seven Deadly Sins to Avoid:Gluttony Fixing all dimensions of a YearEnd.Lust Intense or unrestrained craving for YearEnd features.Sloth Failing to do high quality work at all times.Opaqueness Obscuring the progress, quality or other attribute of a project.Pride Believing that we know everything to produce YE Wastefulness Misuse of critical resourcesMyopia Not seeing beyond your own work
Thank you for your attention
