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 Patient Protection and Affordable Care Act (PPACA) of 2010 includes several new payroll related provisions that employers are required to comply with starting in January 2013 and beyond:
Author: Rena Pirsos, JD, Legal Editor
The Taxation of Employee Benefits section of XpertHR's Payroll chapter has been updated to include the 2014 inflation-adjusted health savings account contribution limitations as determined under § 223 of the Internal Revenue Code.
The Internal Revenue Service has released the calendar year 2014 inflation-adjusted amounts for health savings accounts (HSAs) as determined under § 223 of the Internal Revenue Code.
Employee benefits, such as health insurance, sick pay, disability pay, workers' compensation insurance and retirement savings plans, may be subject to withholding for federal income taxes (FIT), Social Security and Medicare (FICA) taxes or federal unemployment (FUTA) taxes. This section assists HR professionals in understanding how each particular type of benefit plan must be structured and how to properly tax and report contributions, reimbursements and distributions in order to ensure compliance with the Internal Revenue Code.
Employers that paid federal income tax and Social Security and Medicare taxes on the value of health care benefits provided to employees' same-sex partners for tax years 2009 and after should consider whether they want to file a protective refund claim while they await the US Supreme Court's decision in the pending Defense of Marriage Act case, United States v. Windsor.
XpertHR has added a new section to the Employment Law Manual explaining whether employers in Maine must withhold payroll taxes on health insurance benefits provided to employees' same-sex spouses.
Maine excludes from taxable income health insurance benefits for employees' same-sex spouses and their children.
XpertHR's Transportation Resource Center for HR: Payroll helps transportation industry employers handle their most vexing employment issues by bringing relevant resources together in one place for easy access.
The Internal Revenue Service (IRS) has released the 2013 versions of some of the key publications that help employers meet their payroll tax responsibilities: Circular E, Employer's Tax Guide (Publication 15); Employer's Supplemental Tax Guide (Publication 15-A); Employer's Tax Guide to Fringe Benefits (Publication 15-B); and Publication 1494, Tables for Figuring Amount Exempt from Levy on Wages, Salary and Other Income. The IRS has also re-issued a corrected version of the 2013 Form W-4, Employee's Withholding Allowance Certificate.
The IRS has issued special administrative procedures allowing employers to correct the retroactive increase in the maximum excludable amount for 2012 qualified transit benefits on fourth quarter Form 941 and Form W-2.
The American Taxpayer Relief Act of 2012, signed into law on January 2, 2013, made several payroll related changes. To help employers understand the impact of the new law, XpertHR has updated several sections of the Employment Law Manual and all related Worked Examples and How To tools.
HR guidance on the taxation of employee benefits.
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