Changes Ahead – 2020 Withholding Calculation and Form W-4

Changes Ahead – 2020 Withholding Calculation and Form W-4

Changes are being made to the 2020 Form W-4 as a result of the December 2017 tax code overhaul (Pub. L. 115-97). A second draft of Publication 15-T, Federal Income Withholding Methods, has been made available to include withholding tables and nonresident alien employee instructions.  The new publication completes the transition to dollar amounts from withholding allowances in federal tax-withholding calculations. Employers should stay well informed of these changes because any employees who need to complete a Form W-4 should complete the new form beginning in year 2020.

Employees filling out the 2020 Form W-4, Employee’s Withholding Certificate, no longer would be able to claim withholding allowances. Instead, employees need to provide whole dollar amounts to employers if they want more accurate withholding during the year. A revised version of the draft 2020 Form W-4 was released Aug. 8 by the IRS.

As described by the IRS,  “the new Tax Withholding Estimator makes it easier to enter wages and withholding for each job held by the taxpayer and their spouse, as well as separately entering pensions and other sources of income.  At the end of the process, the tool makes specific withholding recommendations for each job and each spouse and clearly explains what the taxpayer should do next.” The Tax Withholding Estimator link can be provided to employees to help them determine how to complete the new W-4 form.

RDA Systems will be making changes to the filing tab in Personnel Demographics and tax calculations to follow the requirements of the new publication and W-4 form.  For further information regarding changes as a result of the tax overhaul, please visit https://www.irs.gov.

2019 Tax Forms and Supplies Notice:  Order forms will be sent out to RDA clients in early September.  Be on the lookout for an email.

Clarifications on ACA Reporting

aca imageAre you unsure about whether you need to comply with ACA (Affordable Care Act) reporting requirements? All organizations have reporting responsibilities, whether or not they are an ALE (Applicable Large Employer). The responsibilities vary, however, based on whether an organization is large (50+ full-time equivalent employees), or small (fewer than 50). So, you need to first determine whether you are considered a large or small employer, and then make sure you know which provisions of the law apply to you.

So, what does “full-time equivalent” mean, anyway? Since employees can be full or part-time, the IRS asks employers to count the total Full-Time Equivalent (FTE) of their employees, rather than the number of employees they have, for reporting purposes. The IRS has defined a full-time employee as “an employee who has, on average, at least 30 hours of service per week during the calendar month, or at least 130 hours of service during the calendar month”, and they have provided the following formula for employers to use to calculate their full-time equivalent employees: “(1) Combine the number of hours of service of all non-full-time employees for a month, but do not include more than 120 hours of service per employee, and (2) Divide the total by 120.”

To determine whether your organization is an ALE, refer to this link.

To determine your reporting responsibilities, please refer to this link.

We will be sending out another Blog in the next few days that will contain a short survey. Please take the time to complete the survey as this will help us to better assist you with the reporting required for your organization.

As we learn of changes to the ACA requirements, we will make any necessary programming changes, and publish news articles/blogs. Remember that it is your responsibility as an employer to stay up to date and be in compliance with the provisions. Please submit a cyber support request if you need assistance with getting the required information out of the system for reporting purposes.

Fiscal Year End

For those of you on a July-June fiscal year, fiscal year end is fast approaching. We are thrilled to offer you software in which each year (as well as each month and quarter) stands on its own, because that means you won’t have a formal closing or opening of these periods. There are, of course, procedures you should follow at the change of a fiscal year. Rest assured that we have you covered! Please click the links in this post to access our fiscal-year-end-related recommendations and tools.

  • MULTIPLE MODULES: You can access our Fiscal Year End Procedures document with this link. The suggestions contained within will help you ensure a smooth fiscal year end, and a clean start to your new year.

  • LEAVE MANAGEMENT: If you have the Leave Management module, then in a few short weeks, you will be moving your employees’ leave balances to the new fiscal year. We want to make that task easier, and also allow your Leave processing to be more streamlined in the upcoming fiscal year and beyond. With that goal and timing in mind, we want to get the word out about something that you may not realize is a feature in our software. NOW is the time, BEFORE you use the Move Leave Balances process, to take a look at all your Leave ID’s, and determine which of the same type may be able to be combined into one, with a table applied that would determine employees’ earnings based on their years of employment. Once tables have been set up, you can use the Move Leave Balance process to move balances into the new year, and at the same time, move them into the unified Leave ID. Please click this link to read more about utilizing Leave Tables.

  • LEAVE MANAGEMENT: We created a Year End sub-menu, under Maintenance, in order to group together the processes and reports that are most commonly used at fiscal year end, when employees’ leave balances need to be zeroed out or carried over, in part or full, to the new fiscal. A new, comprehensive guide of that sub-menu can be accessed via this link. In the guide are links to the wikis that provide more details on each of the individual processes and reports under Year End, including the Move Leave Balance process itself.

  • PAYROLL: We also have guidance on running Contract Payrolls in June. We recommend that you read through this documentation, so that you understand all your options regarding July and August payrolls. It can be accessed with this link.

We hope that you find value in our recommendations and instructions. If you have questions regarding fiscal year end, please submit a cyber support request.

IRS Quick Alerts on ACA

To help us all stay current with the latest ACA requirements, the IRS is offering webinars on the topic. We at RDA will be attending some of these, and expect that you would like to attend the non-technical classes.

Engage this link to sign up for IRS QuickAlerts. When you sign up, you will start getting email notifications about ACA, and have the opportunity to participate in webinars.

There are multiple categories of information provided via QuickAlerts. You choose the categories that interest you, and then you’ll starting getting the related notifications. The categories, per the IRS website, include:

  • Alerts – Processing delays, Programming issues, Changes to any filing season procedure, Error Code and and Business Rule information
  • Technical – Schema information, Software testing (ATS)
  • General Notifications – Seminars, Conferences, e-file publication changes.
  • General IRS e-file Service Center Messages – IRS e-file program updates, General information, Service Center maintenance schedules, IRS e-file Help Desk phone numbers and more
  • Affordable Care Act Information Return (AIR) – Electronic specifications and system information needed for Issuers/Payers, Transmitters and Software Developers that electronically file Forms 1094-B, 1095-B, 1094-C, and 1095-C to IRS.

As we learn of changes to the ACA requirements, we will make any necessary programming changes, and publish news articles/blogs. Remember that it is your responsibility as an employer to stay up to date and be in compliance with the provisions. You can visit the IRS’ “What Employers Need to Know” page from this link.

Please submit a cyber support request if you need assistance with getting the required information out of the system for reporting purposes.

?Updates for the 2015 ACA Reporting Requirements:

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RDA is happy to provide you with additional processes to ease the transition with the new requirements from the IRS.

  • The 1095C will be available to download from RDA

  • Mass updates of safe harbor coverage codes in Personnel Demographics

  • For self-insured employers, monthly reporting for dependents’ eligibility

  • Back load of Group Health Insurance codes

Since these are mass updates, you will still need to review each employee separately to ensure setups are correct.

You should still refer to the IRS site for any specifics. http://www.irs.gov/pub/irs-pdf/p5200.pdf

The release will be in mid to late Summer 2015.