Overview: Most employers offer several different types of employee benefits, such as health insurance, sick pay, disability pay, workers' compensation insurance and retirement savings plans. Whether employer and employee contributions and benefit payments received by employees are subject to withholding for certain payroll taxes, such as federal income tax (FIT), Social Security and Medicare (FICA) taxes or federal unemployment (FUTA) tax, varies among benefit types.
Trends: The following important issues will affect the taxation of employee benefits in 2015!
Author: Rena Pirsos, JD, Legal Editor
This new Task guides an employer through the process of adding a new hire to the payroll, from verifying an employee's right to work to ensuring proper withholdings.
California employers seeking to indicate that they are compliant with legal requirements regarding same-sex couples and domestic partnerships and to provide a point of contact for employees in these relationships who have benefits-related questions should consider including this model policy statement in their handbook.
A federal district court has granted a request by the State of Texas to temporarily block implementation of a final Department of Labor (DOL) regulation requiring Family and Medical Leave Act (FMLA) benefits to be extended to same-sex couples legally married in a state that recognizes such marriages, even if they live in a state that does not recognize such marriages. The final regulation would have gone into effect today if not for the stay granted by the court.
The Supreme Court has set April 28 as the date it will hear arguments that could decide the fate of same-sex marriage nationwide. The Court will hear four consolidated cases in Obergefell v. Hodges involving same-sex marriage bans in Michigan, Ohio, Kentucky and Tennessee.
Employees often receive supplemental wages, which are taxable and subject to income tax withholding, FICA, and FUTA. For employees who receive up to $1 million a year in supplemental wages, employers have several different withholding methods from which to choose. This How To shows employers how to withhold on supplemental wages under the aggregate method.
A federal district court ruled that Alabama's same-sex marriage ban is unconstitutional. Same-sex marriages may proceed while the state appeals.
In-depth review of the spectrum of Alabama employment law requirements HR must follow with respect to taxation of employee benefits.
Despite the DOMA decision handed down by the Supreme Court in Windsor, state laws still vary greatly regarding both the recognition of same-sex marriage and the taxation of benefits provided to an employee's same-sex spouse by an employer. This Quick Reference chart summarizes federal and state law regarding whether same-sex marriages, civil unions and/or domestic partnerships are recognized, and whether the value of benefits provided by an employer to an employee's same-sex spouse or civil union or domestic partner is taxable. This chart will be updated when any changes in these laws occur.
The IRS has released the final instructions to Forms 1094-C and 1095-C and Forms 1094-B and 1095-B. Employers are required to complete and file the forms with the IRS to report on their employee health care coverage, as required by the Affordable Care Act (ACA) and Internal Revenue Code § 6055 and § 6056.
The Employment Law Manual has been fully updated for 2015 with all relevant employer guidance and legislative and regulatory changes affecting the following payroll sections: Withholding Taxes, Taxation of Employee Compensation, Taxation of Employee Benefits, Unemployment Insurance Tax, International Payroll Issues and Depositing and Reporting Withheld Taxes.
HR guidance on the taxation of employee benefits.