The Social Security Administration’s Office of the Chief Actuary (OCA) is projecting that the Social Security wage base will increase from the current wage base of $106,800 to $110,700 for 2012. This would be the first increase in wage base since 2009. The Social Security administration projects increases through the year 2020. • 2012 — $110,700 • 2013 — $114,900 • 2014 — $120,000 • 2015 — $125,400 • 2016 — $130,800 • 2017 — $135,900 • 2018 — $141,300 • 2019 — $146,700 • 2020 — $153,300 The full report is on the SSA’s website at: http://www.ssa.gov/oact/tr/2011/tr2011.pdf

The North Carolina Department of Revenue is currently mailing notification that they will be discontinuing their PC Software payment method for state withholding taxes. DirectPay Payroll Services has already been informed and implementation of the new submittal process is already in place. If you receive a notice from the North Carolina Department of Revenue, please feel free to send a copy to your Account Manager. As always, please be sure to fax, mail, or email all IRS or state tax related correspondence you receive. Thank you!  

A worker who was fired after admitting to his employer that he filed Form SS-8 with the IRS to determine his status as an independent contractor or employee can continue his lawsuit for unpaid overtime, a federal trial court has ruled. (Coats v. Nashville Limo Bus, LLC, U.S.D.C., M.D. Tenn, No. 3:10-0759, 2010) It’s independent contractor status or nothing A corporation treated its drivers as independent contractors. One driver filed an SS-8 form with the IRS to determine his status as an independent contractor or employee. The IRS concluded that he was an employee. The employee admitted to a manager [...]

South Carolina is adjusting SUI rates mid-year. All SC clients should have received the following correspondence from South Carolina Department of Employment and Workforce. Additional correspondence with your updated SUI rate will follow. It is imperative that you forward your adjusted rate to your Account Manager. SOUTH CAROLINA DEPARTMENT OF EMPLOYMENT AND WORKFORCE 1550 Gadsden Street PO Box 995 Columbia, SC 29202 NOTICE: Revised 2011 tax rates shown below are preliminary estimates based on recently legislated $146 million in state appropriations along with other changes in benefits (H.3700, Proviso 90.18 and H.3762). You will receive additional correspondence informing you of [...]

What is the FUTA Credit? Under the provisions of the Federal Unemployment Tax Act (FUTA), a Federal tax is levied on employers covered by the Unemployment Insurance program at a current rate of 6.2% on wages up to $7,000 a year paid to a worker. The law, however, provides a credit against Federal tax liability of up to 5.4% to employers who pay state taxes timely under an approved state UI program. Accordingly, in states meeting the specified requirements, employers pay an effective Federal tax of 0.8%, or a maximum of $56 per covered worker, per year. The credit against [...]

The IRS has announced that it intends to discontinue authorizing the high-low per diem method for substantiating lodging, meal, and incidental expenses incurred in traveling away from home. Later in 2011, the IRS plans to publish a revenue procedure providing the general rules and procedures for substantiating these expenses that would omit the high-low substantiation method and a notice providing the special transportation rate. Ann. 2011-42. Part IV – Items of General Interest Discontinuance of High-Low Method for Substantiating Travel Expenses Announcement 2011-42 In Rev. Proc. 2010-39, 2010-42 I.R.B. 459, the Internal Revenue Service requested public comment on the continuing [...]