Additional FUTA Tax Assessment

Federal law, via IRS Code Sec. 3302 provides for a reduction in the amount of FUTA credit employers may take when a state has outstanding federal loans for two or more years. For the 2013 tax year, there are14 states with outstanding federal loans (by credit reduction, they mean increased taxes).

If your business operates in Delaware, Arkansas, California, Connecticut, Georgia, Kentucky, Missouri, New York, North Carolina, Ohio, Rhode Island, Wisconsin, or Indiana, you will pay higher FUTA payments per employee for the 2013 tax year, resulting in a net increase in your FUTA taxes due. Therefore, similar to last year, you will notice an additional tax due, albeit modest, in January 2014, for the 2013 payrolls.

As a part of the services that Ashgrove Payroll provides to our cleints, we will deduct the additional FUTA amounts due from thier account and file form 940 on their behalf. As the tax year progresses and additional information becomes available, further communications on this topic may be provided.

Has your state tax deposit frequency changed?

State Withholding Tax Deposit frequencies are necessary in order to file and pay our clients taxes on time. Because we don’t received information from the state or federal tax agencies directly, it is the client’s responsibility to provide Ashgrove Payroll with this information.

What is a state withholding tax deposit frequency?

When money is withheld from your employee’s check(s) for state taxes, that money is called state withholding tax. A deposit frequency is the rate in which you we required to remit withholding tax to the appropriate agency.

How is my deposit frequency determined?

How often you file and pay withholding tax depends on the size of your payroll. The larger your payroll, the larger the withholding and therefore the more frequently you will report and pay the tax.

How do I find out what my state deposit frequency is?

Every employer that is required to withhold tax from their employee’s check(s) must register with the appropriate state agency. At that time you will be assigned a deposit frequency. The agency also performs periodic reviews of your account and may change your deposit frequency. When this occurs, the agency will notify you directly of the change. Ashgrove Payroll does NOT receive a notification from the state.

I have been a client for years, why are you asking for this information now?

Ashgrove Payroll has always required that you provide the most current information, including deposit frequencies, to ensure your taxes are paid and filed accurately.

I have received a deposit frequency change notification. What do I do now?

Fax all deposit frequency notifications received from the state directly to Ashgrove Payroll at 866-432-6140

What if I did not receive a notification of change?

Due to the importance of having the correct frequency for your company, we recommend that employers contact their state agencies annually to determine if their frequency has changed for the upcoming year.

IRS annouces HSA Limits for 2014

The IRS has announced the 2014 maximum contribution levels for  Health Savings Accounts (HSAs), and out-of-pocket spending limits for High Deductible Health Plans (HDHPs) that must be used in conjunction with HSAs.

  1. The maximum annual HSA contribution for an eligible individual with self-only coverage is $3,3000.
  2. For family coverage, the maximum annual HSA contribution is $6,550.
  3. The catch-up contribution for an individual age 55 or older is $1,000 in 2009 and all years going forward.