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New Payroll Regulations for Business Owners

Posted by McDonald & Osborne Posted on Oct 09 2015

FUTA TAX RATE FOR 2011. The Federal Unemployment tax rate is .8% through June 30, 2011. The FUTA tax rate decreased to .6% effective July 1, 2011. Several states (Florida included) have had assessments to pay back interest on loans and may receive a credit or reduction in tax on the Form 940 for 2011. The IRS has not released the 2011 Form 940, so we do not know how the wages and rate changes will be handled on the return for this year.

SOCIAL SECURITY TAX RATE PAID BY EMPLOYEES FOR 2011. The Tax Relief Bill signed December 17, 2010 reduced the social security tax rate withheld from an employee’s wages from 6.2% to 4.2% for wages paid in 2011. The employer tax rate for social security remains unchanged at 6.2%. The social security wage base limit is $106,800 for 2011. The Medicare tax rate is 1.45% each for employers and employees, unchanged from 2010. There is no wage base limit for Medicare tax.

HOUSEHOLD WORKERS. Social security and Medicare taxes apply to the wages of household workers you pay $1,700 or more in cash or an equivalent form of compensation.

FEDERAL TAX DEPOSITS MUST BE MADE BY ELECTRONIC FUNDS TRANSFER. Beginning January 2, 2011, you must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). Forms 8109 and 8109-B, Federal Tax Deposit Coupon cannot be used after December 31, 2010. Electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make deposits on your behalf. To obtain more information about EFTPS or to enroll in EFTPS visit , or call 1-800-855-4477 .

FLORIDA NEW HIRE REPORTING CENTER. Employers are required to report the following employees:

  • New employees : Employers must report all employees who reside or work in the State of Florida to whom the employer anticipates paying earnings. Employees should be reported even if they work only once and are terminated (prior to the employer fulfilling the new hire reporting requirement).
  • Re-hires or Re-called employees: Employers must report re-hires, or employees who return to work after being laid off, furloughed, separated, granted a leave without pay, or terminated from employment. Employers must also report any employee who remains on the payroll during a break in service or gap in pay, and then returns to work. This includes teachers, substitutes, seasonal workers, etc.
  • Temporary employees: Temporary agencies are responsible for reporting any employee who they hire to report for an assignment. Employees need to be reported only once: they do not need to be re-reported each time they report to a new client. They do need to be reported as a re-hire if the worker has a break in service or gap in wages from your company.

For more information visit Florida New Hire FAQ’s or the Florida New Hire Reporting Form .

Diana Hubbard

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