Florida had previously issued a statement regarding the federal loan interest assessments. As a result, SB 994 was enacted which will allow excess funds in the Audit and Warrant Clearing Trust Fund to pay the federal loan interest due in September 2013, eliminating the need to assess employers. Therefore, employers will not be issued a special assessment for interest in 2013.
Employer Tax Services
Oklahoma Senate Bill 5 was signed into law on April 22, 2013. It amends the unemployment insurance (UI) laws so that an employee of a temporary help firm may be denied UI benefits if he or she: 1) does not contact the firm for reassignment upon completion of an assignment; 2) refuses a suitable job assignment without good cause; 3) communicates his or her decision to stop seeking assignments for any period of time; 4) becomes unavailable to accept a suitable job assignment without good cause; or, 5) accepts employment with a client of the temporary staffing firm.
The temporary staffing company is required to provide the worker with a document written in clear, concise language informing him or her of the statutory provisions and that benefits may be denied for failure to comply with the law requirements to contact them for reassignment. The temporary help firm must also establish a way for temporary workers to communicate to them that their assignment has ended and of their availability for a new assignment.
"Good cause" is defined as a reason that is significant and would compel an average, reasonable worker, who would otherwise want a suitable assignment with a client of a temporary help firm, to fail to contact the temporary help firm, to refuse an offered assignment, or to be unavailable for assignment.
"Suitable job assignment" is defined as work, either full-time or part-time for one or more days or portions thereof, that is in keeping with the education, training, experience, and ability of the individual to perform.
We have contacted the Oklahoma UI agency for any additional details on how they will administer the law amendment, and will keep our clients apprised.
This law change goes into effect July 1, 2013.
Please take a moment to review the new reporting requirements in Illinois and new programs in New York and Colorado.
Illinois New Reporting Requirement (Public Act 97-905)
Illinois now requires annual business reports for any business who received incentives for enterprise zones, river edge redevelopment zones and high impact businesses from January 1, 2012 through December 31, 2012. Each business who utilized an incentive, including, but not limited to sales tax exemption and property tax abatement during 2012, is required to file a business report with the Illinois Department of Revenue (IDOR). All reports must be completed and filed with the IDOR by May 29, 2013.
Equifax Workforce Solutions (WS) will complete and submit the business reports for any business that currently has a program authorization with WS.
New York Veteran Program
New York enacted a credit for hiring and employing qualified veterans. The credit is equal to 10% of wages, up to $5,000 per employee and the percentage will increase to 15% for disabled veterans (maximum $15,000). Eligible employees must be hired between January 1, 2014 and December 31, 2015 and work a minimum of 35 hours per week for at least one year from the date of hire. In addition, the eligible employee must have received a general or honorable discharge after September 11, 2001 and must have signed an affidavit stating they were not employed in a full-time position for six months prior to hire. The program is available beginning January 1, 2015, and continuing through January 1, 2017.
Denver Business Investment Program (BIP)
The City and County of Denver have recently enacted a Business Personal Property Tax Credit. An application must submitted before July 1, 2013 for large personal property expansions in 2012. The estimated benefit equals approximately 1.2% of the investment taken over a four year period. The program is available to all industries. The tax credit is awarded annually through 2017 to local businesses making qualified investments in business personal property; including machinery, equipment, furniture and other items related to commercial or industrial operations.
If your business is interested in more information on the programs listed, please contact your Credit Relationship Manger (CRM) or Pete Krieshok at 314-214-7325 or by email at Pete.Krieshok@equifax.com.
Julie Dietz and Maureen Hourihan
UWC, Inc., a national employer advocacy organization devoted to unemployment public policy issues, is reporting the potential triggering of an additional FUTA tax increase in some states. In addition to the FUTA credit reduction, states that continue to have outstanding Title XII loan balances are subject to a Benefit Cost Ratio (BCR) add-on beginning in the fifth taxable year of any succeeding January 1st where a loan balance still exists. In essence, the rate of the FUTA credit reduction is accelerated based on two calculations.
Equifax Workforce Solutions is aware of the BCR add-on under Title XII of the Social Security Act. We have been actively keeping tabs on the BCR trigger, in conjunction with our regular monitoring and reporting about FUTA credit reduction states. We expect greater efforts by states that can either pay off their Title XII loans by this November 10th, or employ bonding to do so, because of the potential for the BCR to be added on to their current FUTA credit reduction. First quarter contribution payments are typically the largest amount of tax receipts annually, so we anticipate some states will be able to repay their Title XII loans, thereby avoiding future FUTA credit reductions and the BCR add-on. Contributions for Q1/2013 are due at the end of April, but the receipts usually don't show up in Treasury balances for a state's Trust Fund until late May or early June, and then payment on the federal loans are made. Therefore, we aren't able to clearly assess the situation at present.
States at the greatest risk for the BCR add-on for the 2013 Federal 940 are Indiana and South Carolina. Regulations provide for a waiver of the BCR, as long as it is requested prior to July 1st of the year it is needed and all criteria are met. UWC is reporting that these two states are considering the application for the waiver.
We will continue to watch this matter closely and will advise our clients accordingly via our bi-weekly Flash Reports and Webcasts.
Employer Tax Services
The much anticipated electronic I-94 form goes into effect April 30th, 2013. From that point forward, those seeking an admission number will need to complete that process via the internet. The site for accessing this electronic process is www.CBP.gov/I94.
Once travelers reach the site, there is some basic personal information to supply--family name, given name and birth date, in addition to information located on the traveler's passport. That passport information includes the passport number, the country of issuance, the date of entry, and the class of admission. The class of admission could cause some confusion, but it can be easily ascertained by checking the passport stamp associated with the visit.
The site itself is very basic, but it does include a Frequently Asked Questions section that should help guide the traveler through this seemingly uncomplicated process. Customs and Border Protection has provided a demo and slide deck for those with further questions.
In a proposed
2014 budget, The Obama
administration has laid out its plan to address spending cuts to
defense, and shoring up social security to the tune of 230 Billion.
Significantly, the President’s budget includes a permanent
extension of the Work Opportunity Tax Credit (WOTC) and the Indian
Employment Credit (IEC).
Currently, WOTC and IEC must continuously be renewed and extended as a
matter of legislative action. Indeed, since its inception WOTC has
expired and entered “hiatus” numerous times. While
it has always been renewed, retroactively if necessary, the constant
expiration makes it difficult for businesses that hire to effectively
plan their hiring and tax strategies on both a long term and short term
basis.
The president’s proposal would eliminate this uncertainly by
making both credits permanent. The document includes this section
speaking specifically of WOTC:
“The
Administration also continues its support of tax credits that will help
employ veterans. The Returning Heroes Tax Credit, which provides up to
$5,600 to employers, and the Wounded Warrior Tax Credit, which provides
up to $9,600 to hire long-term unemployed veterans with
service-connected disabilities, were recently extended for one more
year in the American Taxpayer Relief Act of 2012. These credits are a
part of the Work Opportunity Tax Credit (WOTC), which contains other
categories targeted to hiring veterans. The Budget proposes to
permanently extend the WOTC.”
Ezrie Yellin
The American Tax Relief Act of 2012 (H.B. 8), provides for an extension of the federal empowerment zone designations to the end of 2013. As a result of the legislation, the IRS updated Form 8844, Empowerment Zone Employment Credit. The IRS released the updated form and instructions in April 2013. The new form instructions have raised questions regarding the extension of the federal empowerment zone designations. The questions come from the instruction section “What’s New” on page 2.
What’s New
The empowerment zone designations generally expired at the end of 2011. However, the American Taxpayer Relief Act of 2012 provides for an extension of the designations to the end of 2013. To extend the designations, state and local governments must amend their nominations for designation to change the termination date to December 31, 2013. The IRS is working with HUD and USDA to provide guidance on amending nominations for designation. The treatment of parts of Washington, D.C. as an empowerment zone ended at the end of 2011.
Each empowerment zone designation is eligible for an extension, but the extension process will not be automatic. Each zone will participate in the renewal process to extend the designated empowerment zone to December 31, 2013 (retroactive to January 1, 2012).
At this time Housing and Urban Development (HUD) and the IRS have not publically begun to post any zone extension information, since the renewal process has not been released by IRS/Treasury. Eventually, there will be a site where the extension can be monitored on a daily basis.
Equifax Workforce Solutions is working closely with HUD and the IRS as the renewal process moves forward. EWS will continue to process 2012 Federal Empowerment Employment Credit reports, since we are confident all empowerment zone designations will participate in the renewal process for extension. We will keep you posted on all updates pertaining to the empowerment zone extensions.
Maureen Hourihan
IRS CIRCULAR 230 DISCLOSURE: Any tax advice in this communication is not intended or written by TALX to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing, or recommending to another party any matters addressed herein.
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