Volume VII, Issue VII

Upcoming Education

Reasonable Suspicion & COBRA 101

Seminar | September 28
Reasonable Suspicion—
Drugs, Narcotics, & Alcohol
Payroll Systems invites you to attend this interactive two hour seminar designed to inform managers of
the many pitfalls regarding drugs in the workplace.
As a supervisor do you know what you can
legally do if:

• An employee shows up under the influence?


• You receive a report that an employee has illegal drugs in his/her locker?


• An employee wants "reasonable accommodation" under the Americans
  with Disabilities Act (ADA)?


• You want to terminate an employee for
  drug use?

Date: Wednesday, September 28, 2011
Cost: HRIdeas or Payroll Systems Clients $40/person
Time: 9am - 11am
Location: Payroll Systems Office

Date: Thursday, October 6, 2011
Cost: No charge
Time: 10:30 am - 11:30 am

back to top

W-2s and Health
Coverage Costs

Who must comply?
2011: Optional for all employers
2012: Employers issuing 250 or more 2011 W-2s

What must be reported?
Employers are required to report the total cost of all applicable employer sponsored coverage provided to an employee that is non-taxable. The amount includes both the portion paid by the employer and the portion paid by the employee.

What is excludable?
Interim guidance and transition relief is provided per IRS Notice 2011-28. Section IV lists several costs that are excluded until further guidance is released, including:

• Health Reimbursment Arrangements
• Dental and Vision plans that are not integrated into another group health plan
• Self insured plans not subject to COBRA

• Coverage for long-term care
• Amount contributed to any Archer MSA
• Salary reductions contributed to a flexible spending account (FSA)
• Workers' Compensation insurance

See also IRS Questions and Answers

Or contact your payroll specialist!

back to top

Why should I offer an FSA
to my employees?

A Flexible Spending Account (FSA) is a tax favored program offered by employers that allows employees to pay for certain out-of-pocket health care and dependent care expenses with pretax dollars. For most employees, FSA’s provide a better tax benefit than is available to them as an individual tax payer.

For employers, FSA’s can significantly enhance an employer’s overall benefits program which can act as an employee recruitment and retention tool. Employers also do not pay Federal Insurance Contribution Act (FICA) taxes on employees’ pre-tax FSA contributions and in some cases reduce an employer’s Workers’ Compensation premium costs.
There are three types of Flexible Spending Accounts:

1. Health Care Spending Account used for qualified medical expenses


2. Limited Expense Account used for qualified dental and vision care for employees enrolled in a High Deductible Health Plan with a Health Savings Account


3. Dependent Care Account used to pay for eligible dependent care expenses
   such as child care

Overall, FSAs are one of the only employee benefit programs available that can provide significant employee and employer tax savings at such a
low cost.
 
To learn more please contact our TPA department.

Download a list of FSA Medical Eligible Expenses and FSA Dependent Care Eligible Expenses

back to top

Free and Easy to Use
Income Tax Calculators

Prevent surprises for your employees this year and direct them to these easy to use IRS and California Franchise Tax Board income tax calculators.
 
For greatest accuracy your employees should
have available:

1. Most recent pay stub
2. Total FSA, H.S.A., and 401k contributions for the entire year
3. Federal Income Taxes withheld to date
4. Pay Frequency
5. Unemployment compensation
6. Non-wage income

back to top

New! Ask the Expert...

I'm a small start up company with only 40 employees, would I qualify for tax credits? I'm not even paying taxes yet.

Yes, small businesses and startups are both eligible for tax credits. The credits can be documented now and then "banked" until you turn a profit and can
use them. With contingency billing, you don't pay
until you actually use the credits to offset your
taxable income.
 
To learn more contact Jenny Pruneau, C&I Tax Consultant

back to top

What's New and Coming Soon at Payroll Systems

Email reminders when your payroll is
due to be processed
Everyone gets busy and occasionally forgets payroll until the last minute! Now you will receive an email on the day your payroll is to be processed reminding you to submit your payroll by 1pm.

HR Support Services in partnership with CalChamber
We now offer CalChamber’s HR Express as our premium HR Service. Our customers receive:

• Up-to-date HR information
• Legislative updates
• Monthly HR newsletter
• Policy guides
• Yearly labor law posters
• 3 hours dedicated support from
  our HR experts per year

back to top

To ensure your payroll is processed the same day we receive it,
you must submit your payroll information no later than 1:00 PM PST.