Payroll update for 2012
Out with the old and in with the new. The expression applies not only to the upcoming new year, but also to the new year’s payroll tax reporting and compliance.
Here are two changes.
- Health care costs. You’re not required to include the amount of insurance coverage you provided to your employees in 2011 on Forms W-2. When you have less than 250 employees, you’re exempt from reporting health insurance costs in 2012 as well. If you’re already tracking the costs, you can choose to report the information in both years, no matter how many employees you have.
Note: The reported benefits are not taxable to your employees.
- Wages subject to social security. Social security tax (FICA) applies to gross wages you pay your employees, up to a “wage base,” or limit, that’s typically adjusted each year. The wage base for 2012 is $110,100, up from $106,800 in 2011.
Reminder: There’s no wage base for the Medicare portion of the payroll tax you withhold from employees. All compensation is taxed at the current rate of 1.45%.
Give us a call for information on state payroll tax changes, as well as proposed federal legislation. It’s our job to help you keep up to date