"When it comes to regulatory compliance, employers today are operating in an environment of rapid change," stated Jill Barber, Ceridian compliance manager for regulations. "The political landscape is evolving, government agencies are struggling to implement new legislation and employers remain resolved to stay compliant despite all the turmoil. It's important for business leaders to stay current and informed."  

Tax topics: Updates for the 2010 tax year

"When it comes to regulatory compliance, employers today are operating in an environment of rapid change," stated Jill Barber, Ceridian compliance manager for regulations. "The political landscape is evolving, government agencies are struggling to implement new legislation and employers remain resolved to stay compliant despite all the turmoil. It's important for business leaders to stay current and informed." 

This article examines some considerations for employers as the 2010 tax year draws to a close, offers some insight into what 2011 might bring and provides tangible ways for companies to help employees make their own year-end tax filing easier and less expensive. 

Delay of reporting of health care benefits on W-2
HR leaders across the nation breathed a sigh of relief on October 12, 2010, when the IRS issued a notice regarding compliance with the Patient Protection and Affordable Care Act (PPACA). "The act requires all companies to repo cost of employer-sponsored health coverage to their employees on IRS Form W-2," said Barber, "and the October IRS notice made this mandate optional -- although only for the 2011 tax year."
 


Employers will be required to report the aggregate cost of applicable employer-sponsored coverage on W-2 forms beginning with the 2012 tax year. What's not clear, however, is how employers will determine the cost of coverage. Government agencies indicate that rules similar to the COBRA rules will be used, but additional guidance is required to determine what that means, especially for self-insured plans. 


The fate of Bush-era tax cuts

The Bush-era tax cuts and the Making Work Pay tax credit are both scheduled to expire at the end of 2010. Congress could pass an extension of the tax cuts before the end of this year; however, it is unlikely that the Making Work Pay credit will be extended. 

No one can predict the timing of any changes, or how long it will take for the U.S. Internal Revenue Service to make a change official. Barber said, "If the IRS issues tax tables in March 2011 that incorporate cuts, those tables are likely to reflect the fact that, during the first part of the year, too much money might have been taken from employee paychecks. Thus, it's not unlikely that people will see smaller paychecks starting in January, even if the Bush-era tax cuts are extended." 


Do you have employees in Pennsylvania?

Pennsylvania Local Act 32 is an effort by the state of Pennsylvania to condense the number of groups and agencies that collect taxes. If you employ people who live in Pennsylvania, tax filing processes will change. Ceridian customers can refer to product-specific compliance pages on MyCeridian to learn more. 


Promote tax filing partnerships and discounts to your employees

If your organization provides online access to employee W-2 forms processed by Ceridian, your employees can take advantage of Ceridian W-2 download partnerships with Intuit and H&R Block. They can easily import information directly to TurboTax (online) or to an H&R Block office or H&R Block's At Home software and online programs.


Discount on TurboTax
Employees of Ceridian's LifeWorks client companies can receive a 25 percent discount on TurboTax federal tax preparation products. Through LifeWorks Online, eligible employees will have immediate access to TurboTax software, the number-one-rated tax software. TurboTax guides taxpayers through their tax returns from start to finish, making it easier than ever for your employees to claim every deduction and credit they deserve. Visit LifeWorks Online under Specialty Solutions for details about this discount.