Client Resources Article Index
- If you receive a IRS Notice titled “Your 2015 Federal Tax Deposit Requirements for Form 941”
- New Jersey Announces an Increase in Minimum Wage to $8.38 an Hour
- 3Q14 Quarterly Reports Have Been Filed
- Pieper Payroll Completes Quarter Balancing for Clients with Updated UI/DI Contribution Rates
- Pieper Payroll Completes Download of Client Unemployment and Disability Rates
- NJ LWD Releases Experience Based Unemployment, and Disability, Tax Rates for 2H14 and 1H15
- How New Jersey Calculates Your Unemployment and Disability Experience Rates
- NJ LWD Announces Contribution Rates for New Businesses and Employees
- New Jersey Announces increased Employee Disability Tax Rates for 2014
- Social Security Wage Base increases in 2014
- Lower FUTA Tax Rates for New Jersey in 2013
- NJ Work force Development Notice of Employer Contribution Rates
- NJ Annual Assessment
- Notice of the NJ Federal Loan interest (FLINT) Assessment
- Payroll Tax Cut Extended
- Payroll Tax Break Extended for 2012 (12-11)
- NJ Annual Reconciliation of Gross Income Tax Withheld (Form NJ-W-3)
- NJ Division of Employer Accounts 2012 Worker Rates Released (12/11)
- 2012 New Jersey Gross Income Tax Instruction Booklet (12/11)
- 2012 W4 Form Released (12/11)
- Notification to ach Credit payers of change in banking information (10/11)
- FEDERAL LOAN INTEREST (FLINT) ASSESSMENT (7/11)
- 2011/2012 Business Specific Unemployment and Disability Rates Released (7/11)
- 2011 New Jersey’s Unemployment & Disability Insurance Programs Handbook is available (1/11)
Full Articles
If you receive a IRS Notice titled “Your 2015 Federal Tax Deposit Requirements for Form 941”
Starting in November the IRS has mailed notice describing 2015 Federal Tax Deposit Requirements to businesses that will have a change in their deposit frequency next year.
- Every year the IRS re-evaluates the deposit frequency for payroll tax deposits against a threshold amount. Your deposit frequency may change as a result.
- Usually only a small number of our clients are affected since liabilities are usually fairly consistent year over year. If you have no change in your deposit frequency you will not receive a notice.
While the IRS may provide a courtesy copy of the notice to us, there have been exceptions. If you receive a notice please fax it to our office or just send an email indicating whether your deposit frequency changed to either semi-weekly or monthly.
Similar letters from New Jersey will follow in the near future. Changes in tax frequency are effective Jan 1 for the IRS and April 1 for NJ.
New Jersey Announces an Increase in Minimum Wage to $8.38 an Hour
On September 30th New Jersey LWD announced the minimum wage will increase by 13 cents an hour to $8.38 an hour starting in January 1, 2015. The 1.59 percent increase, from $8.25 an hour to $8.38, is required under a constitutional amendment approved by 61 percent of voters last November that raised the minimum wage by $1 for 2014 and provided for automatic yearly increases to keep pace with inflation.
3Q14 Quarterly Reports Have Been Filed
Your Federal 941 and New Jersey NJ-927 and WR-30 quarterly reports have been filed. Courtesy copies have been posted to your web portal. Hard copies have also been distributed to print clients.
Directions to access your reports on your web portal are provided in the guide “How to Access Quarter & Year End Reports”.
If you notice a small tax credit or debit from your account at the end of October it is part of our quarter balancing process…
- Federal and State unemployment rates can change during the course of a quarter but be effective retroactively to the beginning of the quarter.
- As NJ updates unemployment and disability rates in August retro-actively to July 1st you can expect to see a balancing adjustment if your rates changed.
- Our software keeps track of any tax rate changes and automatically recalculates liabilities to their effective date.
- We then credit or debit your payroll account for any balance or refund due. This keeps your deposits and liabilities in balance and assures that no tax penalties will be incurred.
- A debit or credit will display the same description in your bank statement as regular tax debits.
Pieper Payroll Completes Quarter Balancing for Clients with Updated UI/DI Contribution Rates
Pieper Payroll reconciles all client unemployment tax returns prior to filing them with New Jersey. Basically we recalculate your taxes for the period during which your new rates were not available. This process assures that your unemployment tax liabilities and deposits are balanced. This approach greatly reduces the chance for any penalties.
With the completion of our quarter balancing process may notice a credit or debit to your payroll account on or around October 31st.
- If your rates went down you will receive a credit to your account
- If your rates went up there will be a debit to your account
Pieper Payroll completes the quarter balancing process at the end of every quarter. New Jersey employers usually only see adjustments at the end of 3Q when UI rates change. Employers in other states usually see adjustments at the end of the 1st quarter since most states change rates on a calendar basis.
Pieper Payroll Completes Download of Client Unemployment and Disability Rates
The updating of unemployment and disability rates by New Jersey is probably the single biggest source of filing errors that can result in fines and penalties. Most small businesses are unfamiliar with the notification process for new rates and fail to update their payroll service. If your rates are not properly updated then taxes will be calculated incorrectly and the quarter end return will be incorrect.
Pieper Payroll has completed its download of your unemployment and disability experience rates and has updated the tax rates we use to calculate your payroll. The file we received contains the same information that is in the blue form you receive from NJ.
We are now using your new rates to calculate your payroll. Just as a reminder, even though New Jersey communicates new rates in late July and early August they are retroactive to July 1st.
If your rates changed we will balance your tax deposits and liabilities at the end of the 3rd Quarter.
NJ LWD Releases Experience Based Unemployment, and Disability, Tax Rates for 2H14 and 1H15
NJ LWD mailed a “Notice of Employer Contribution Rates,” for the fiscal year 2H14/1H15, during the fourth week of July 2014. All employers receive this notice. It is a blue form that is easily recognizable but very confusing to most small business owners.
If you are a new business then your rates will be the new business rates announced earlier in the month. If your rates are “experience based” (generally employers with three or more years of unemployment experience) they are specific to your business.
Your rates are retro-active to July 1, 2014 even though they are distributed late July and early August.
Unlike other payroll services no action is required for Pieper Payroll clients. Pieper Payroll has fully automated the loading of your new contribution rates. Our data rate interchange process allows us to download your new experience rates directly from the State of New Jersey and then directly into our software. This simplifies the process for you, and eliminates manual rate entry for us making errors less likely.
How New Jersey Calculates Your Unemployment and Disability Experience Rates
New Jersey maintains a reserve for every business that is used to fund unemployment and disability benefits.
- If you have had unemployment claims it is likely that your state defined reserve ratio has fallen below a NJ defined ratio. In that case your rates will increase until the target reserve ratio is reached.
- If you have not had unemployment claims then your reserve ration it is likely to be higher than the state target and your rates will decrease over time.
If you are a new, or recently formed business, you may be assigned new business rates for the first three calendar years. After three years your experience rate is assigned based on your unemployment and disability claims experience.
In our experience unemployment rates can vary from under 1% to over 6%. If you are interested understanding how your experience based contribution call NJ LWD at 609-633-6400 and choose prompt 1.
NJ LWD Announces Contribution Rates for New Businesses and Employees
NJ LWD announced new employee and employer contribution rates for 2H14 and 2015. These rates encompass unemployment, disability, workforce development, and family leave insurance. A summary of rate changes follows.
- New business employer rates are unchanged through 1H15. Rates for 2H15 have not been released. New businesses generally have less than 3 years of unemployment history. They are provided default rates until NJ LWD has enough history to have experience rates calculated.
- Employer Workforce Development rates are unchanged through 1H15. Rates for 2H15 have not been released.
- Employee unemployment rates are unchanged for 2015
- Employee disability rates will 0.38% in 2014 to 0.25% for 2015.
- Employee rates for Family Leave Insurance decrease from 0.1% in 2014 to 0.9% in 2015.
Employers that have calculated experience based rates (generally those employers with 3 or more years of history) are scheduled to have their Unemployment and Disability rates mailed to them late July or early August.
No action is required for Pieper Payroll clients. We will automatically update rates as they are received.
New Jersey Announces increased Employee Disability Tax Rates for 2014
The New Jersey Department of Labor and Workforce Development released the calendar year 2014 employee Temporary Disability Insurance (TDI) and Family Leave Insurance (FLI) withholding rates. The Disability Insurance rate will increase to 0.38%for calendar year 2014, up from 0.36% for calendar year 2013. The 2014 Family Leave Insurance rate will remain unchanged at 0.10%. The combined Employee Unemployment Insurance and Work Force Training tax rate will also remain unchanged at .0.425%.
The taxable wage base will increase from $30,900 to $31,500. Based on the 2014 taxable wage base of $31,500, a worker’s maximum TDI contribution for 2014 will be $119.70, the maximum FLI contribution for 2014 will be $31.50, and the maximum Combined UI/WF will be $133.99. New Jersey Labor and Workforce Development revises employee UI/DI/WF tax rates effective January 1 each year. Employer tax rates are revised effective July 1 each year.
For more detail on NJ LWD employee and employer tax rates visit: http://lwd.dol.state.nj.us/labor/ea/rates/rateindex.html
Social Security Wage Base increases in 2014
Social Security and Medicare taxes are employee and employer paid payroll taxes. The Social Security wage base used to calculate employee and employer Social Security Taxes will increase from $113,700 in 2013 to $117,000 in 2014. As a result New Jersey employees and employers with earned income over $113,700 in 2014 will have an increase in their payroll taxes.
Tax rates will remain unchanged in 2014 at 7.65% each for employees and employers. The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion is 6.20% on earnings up to the applicable taxable maximum amount. The Medicare portion is 1.45% on all earnings. Continuing in 2014 for individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly), is an additional 0.9 percent Medicare tax.
For the complete Social Security Administration Fact Sheet go to: http://www.ssa.gov/pressoffice/factsheets/colafacts2014.html.
Lower FUTA Tax Rates for New Jersey in 2013
Federal Unemployment Taxes are an employer paid payroll tax. The normal tax rate is 0.6% on an employee’s first $7000 in earned income. New Jersey had borrowed funds from the Federal Government to maintain the solvency of NJ unemployment fund in 2010, 2011 and 2012. As New Jersey had not repaid the loans the FUTA payroll tax rate for New Jersey employers was increased to 0.9% in 2011 and 1.2% in 2012.
On October 24th, 2013 New Jersey Governor Chris Christie announced that New Jersey will repay its federal unemployment insurance (FUTA) loan balance by the end of October. As a result the FUTA tax rate will return to 0.6% for 2013 from the current 1.2% withholding rate. If the loan was not been repaid the tax would have increased to 1.5% in 2013. Once the Federal Government confirms the reduction of New Jersey’s FUTA payroll tax rates in early November employer payroll tax rates will be adjusted. Payroll services will then recalculate payroll taxes retro-actively to January 1st, 2013 and return any excess taxes to employers.
More information can be obtained at http://lwd.dol.state.nj.us/labor/lwdhome/press/2013/20131024_unemploymentrustfundbecomessolvent.html
NJ Work force Development Notice of
Employer Contribution Rates
New Jersey has recently distributed their notification of employer unemployment and disability experience rates for the period July 1, 2013 through June 30, 2014. Notices are distributed the fourth week of July and the new rates are effective retro-actively to July 1st. It is a blue notice that looks like the attached sample.
No action is required for Pieper Payroll clients.
- Traditionally a New Jersey employer was required to forward their new experience rates to their payroll service to manually update the tax rate. Pieper Payroll has fully automated this process which will allow us to download your new experience rates directly from the State of New Jersey and then directly into our software. This simplifies the process for you, and eliminates manual rate entry for us making errors less likely.
- New Jersey releases their data file at the end of August. Once we receive your updated rates they will be used for all subsequent payrolls.
- Even though New Jersey releases updated rates after the July 1st effective date we will automatically recalculate your taxes at the end of the 3rd quarter back to July 1st to assure liabilities and deposits are in balance. If your rates had gone up and additional taxes are owed we will debit your account at the end of October. If your rates have been lowered and less tax is owed we credit your account for any over payments.
If you are interested understanding how your rates are calculated see the attached explanation or call NJ LWD at 609-633-6400 and choose prompt 1. Basically New Jersey calculates your experience rates as follows:
- If claims have depleted your state defined reserve balance your rates are higher. If your reserve ratio is higher than the state target then your rates are lower.
- If you are a new, or recently formed business, you may be assigned new employer rates for the first three calendar years. After three years your experience rate is assigned based on your unemployment and disability claims experience.
Pieper Payroll maintains the following New Jersey LWD tax rates and applicable wage bases for you.
- Unemployment (employer and employee)
- Work Force Development (employer and employee)
- Disability (employer and employee)
- Family Leave Insurance (employee)
NJ Annual Assessment
Several Clients have inquired about the new Jersey annual assessment forms currently arriving in the mail….
Seven different annual assessments are levied on New Jersey employers according to various NJ statutes. These assessments, which are required by law, fund programs that are not covered by the quarterly contributions as reported by the NJ-927 report and submitted by Pieper Payroll. The assessments are not penalties and are not the result of an error. The same assessment rates apply to all employers that had employees in the previous year. The assessments are not a payroll tax and should be paid by the employer. A sample copy of the assessment notice can be found at this link. The second page of the notice describes the assessments in detail.
Notice of the NJ Federal Loan interest (FLINT) Assessment
The NJ Department of Labor and Workforce Development announced via its website that the department plans to mail the 2012 federal loan interest assessment to employers on June 8th, 2012 with payment due on July 8th, 2012. This is one month early than the same assessment in 2011. This assessment, since it relates to the funding of New Jersey’s Unemployment Insurance fund is frequently assumed to be a payroll tax by NJ employers. It is important to understand that the assessment is a separate interest assessment and NJ employers who receive an assessment notice will be responsible for paying your assessment directly to New Jersey.
Background: The New Jersey Department of Labor and Workforce Development (Department) was required to borrow funds from the United States Treasury in order to pay Unemployment Insurance benefits. Payment of the interest on the outstanding loan is due September 30, 2012. As required by N.J.S.A. 43:21-14.3, The Department must assess all employers for the interest due. Each employer’s assessment will be determined by multiplying the amount of the employer’s calendar year 2011 unemployment contributions by 2.1486%, a ratio calculated in accordance with state law above. The calculation of the employer’s assessment will be shown on the notice to be mailed to employers. As long as your business was active during some portion of 2011 there will be an assessment. The minimum assessment is $5.00. Payment instructions will be provided in the notice.
Complete details can be found at the following NJ Department of Labor and Workforce Development link:
http://lwd.dol.state.nj.us/labor/employer/ea/empinfo/FLINT.html
Payroll Tax Cut Extended
Legislation to extend a two percentage point cut on the employee side of the payroll tax through the end of 2012 was signed by President Obama on February 22nd. Employees will continue to be taxed on a lower Social Security tax withholding rate of 4.2 percent, which is two percentage points less than the 6.2 percent rate scheduled to go into effect March 1, 2012. This reduced rate, originally in effect for all of 2011, was previously extended through February 2012.
A comparable rate reduction in the Social Security portion of the self-employment tax, from 12.4 percent to 10.4 percent, applies for self-employed individuals. For 2012, the Social Security tax applies to the first $110,100 of wages and net self-employment income received by an individual.
The new law also repeals the recapture provision included in the previous extension that effectively capped the amount of wages eligible for the payroll tax cut at $18,350.
On February 23rd, the Internal Revenue Service released a revised Form 941, Employer’s Quarterly Federal Tax Return, enabling employers to properly report the newly-extended payroll tax cut. If you are currently an active Pieper Payroll client there is no action required as we handle the payment of your quarterly payroll taxes, complete and submit this form for you.
Payroll Tax Break Extended for 2012 (12-11)
President Obama signed into law a 2-month extension of the 2% reduction in employee Social Security tax on Friday 12-23-11. The employee Social Security rate remains at 4.2% through at least February 29, 2012.
Pieper Payroll has updated our tax software to reflect the extension of this payroll tax reduction.
NJ Annual Reconciliation of Gross Income Tax
Withheld (Form NJ-W-3)
Clients are starting to receive a form notice from NJ with instructions for filing the NJ-W-3 form. This is a reminder than filing of this form is included as part of your tax service with Pieper payroll and that no action is required on your part. A copy of the filings will be provided early 1Q12 with copies of your other year end forms.
NJ Division of Employer Accounts 2012
Worker Rates Released (12/11)
This notice is informational. Your taxes rate have been updated by Pieper Payroll
Unemployment Insurance: 0.3825%
Disability Insurance: 0.2%
Workforce Development/Supplemental Workforce Funds: 0.0425%
Family Leave Insurance: 0.08%
Please note the new worker FLI and DI rates for the 1st and 2nd quarters of 2012. The 2012 Taxable Wage Base under UI, TDI and FLI: $30,300
2012 New Jersey Gross Income
Tax Instruction Booklet (12/11)
This notice is informational. Your tax rates have been updated by Pieper Payroll
The New Jersey Division of Taxation has released the 2012 New Jersey Gross Income Tax Instruction Booklet. The percentage method
withholding tables are unchanged.
NJ Tax Instruction Booklet
2012 W4 Form Released (12/11)
Employers should use the updated forms
The 2012 W4 Form has been released. Employers should request that employees complete form W-4 every year or whenever their tax status changes. This form should be retained by the employer.
IRS W4 Form
Notification to ach Credit payers of change
in banking information (10/11)
This notice is informational. Your tax deposit process has been
updated by Pieper Payroll
The State of New Jersey recently notified ACH credit payers of a contractual banking change that affects tax, Unemployment Insurance and energy tax payments. Taxpayers who remit payments using the ACH credit method were instructed to change banking information.
FEDERAL LOAN INTEREST (FLINT) ASSESSMENT (7/11)
Several clients have asked me about a recent bill they have received from NJ Department of Labor and whether it was payroll related. This is not payroll related. This is a NJ assessment bill that has been assessed on NJ employers as a result of interest costs NJ incurred borrowing money from the
Federal Government. Details at this web site:
http://lwd.dol.state.nj.us/labor/employer/ea/empinfo/FLINT.html and below
2011/2012 Business Specific Unemployment
and Disability Rates Released (7/11)
Employer action is required to provide Pieper Payroll with your
new experience rates
NJ Department of Labor and Workforce has released their annual notification of business experience tax rates for 2H11/1H12. They were mailed by NJ DOL on 7-29-11 and were effective 7-1-11. If you have not received your rate yet please call NJ DOL @ 609-633-6400 option 1 then option 5 for rates.
This form should be faxed to our office @ 908-926-2348 so we can update your tax rates. These tax rates vary by business based on your unemployment and disability tax claims.
2011 New Jersey’s Unemployment & Disability Insurance Programs Handbook is available (1/11)
This notice is informational;
The 2011 New Jersey’s Unemployment & Disability Insurance Programs Handbook is available
http://lwd.dol.state.nj.us/labor/forms_pdfs/employer/B-426EmployerHndbk.pdf
