Could Your Business Benefit from the Work Opportunity Tax Credit?

Could Your Business Benefit from the Work Opportunity Tax Credit?

If you plan to hire new employees this year, you’re not alone. Employment statistics ended 2015 on a positive note. In addition, roughly 242,000 new jobs were added in February and the unemployment rate fell to 4.9%, its lowest level in eight years. Several recent studies indicate that the hiring momentum will continue in 2016.

Hiring new employees could also earn you a credit on your tax return, if you meet certain requirements. The Work Opportunity tax credit is a tax break for qualified wages paid to new employees from certain targeted groups. This credit has undergone several changes since it was introduced nearly 40 years ago. The most recent extension of this credit — under the Protecting Americans from Tax Hikes (PATH) Act of 2015 — retroactively renews the credit for 2015 and extends it through 2019.

Understand the Mechanics

The Work Opportunity tax credit applies to wages paid to a new hire from a targeted group who works for your business at least 120 hours during the first year. If a new employee works at least 400 hours during the first year, the credit equals 25% of his or her qualified wages, up to the applicable limit. The percentage rises to 40% if the new employee works more than 400 hours.

In general, the credit applies to only the first $6,000 of wages. But there are a number of exceptions, which we’ll discuss a little later. In addition, you may qualify for a credit of 50% of qualified second-year wages (in addition to first-year wages) if you hire someone who’s certified as a long-term family assistance recipient.

Here’s an example illustrating how this credit works: Suppose you hire Fred, a qualified veteran who was unemployed for six months before you hired him. He works for you for nine months and earns $500 per week, which equates to $19,000 in the first year. An added bonus is that Fred falls into a special targeted group of veterans and, based on his circumstances, he qualifies you for a credit on his first $14,000 of wages.

Because Fred worked more than 400 hours at your business, you earn a credit equal to 40% of his wages up to $14,000. In other words, your Work Opportunity credit is $5,600. However, you also must reduce your deduction for wages by the amount of the credit. So, your wage deduction for paying Fred is $13,400, and your credit is $5,600.

Important note. Typically, a credit will provide greater tax savings than a deduction of an equal dollar amount, because a credit reduces taxes dollar for dollar. A deduction reduces only the amount of income that’s subject to tax.

There’s no limit on the number of eligible individuals your business can hire. In other words, if you hire 10 people exactly like Fred, your credit would be $56,000.

Work Opportunity credits generated by pass-through entities, such as S corporations, partnerships and limited liability companies, pass through to the owners’ personal tax returns. If this credit exceeds your tax liability, it may be carried back or forward.

Know the Targeted Groups and Qualified Wage Limits

To determine whether you qualify for this tax break, first determine if a new hire belongs to one of these targeted groups:

• Long-term family assistance recipients,

 

• Qualified recipients of Temporary Assistance for Needy Families (TANF),

 

• Qualified veterans,

 

• Qualified ex-felons,

 

• Designated community residents who live in empowerment zones or rural renewal counties,

 

• Vocational rehabilitation referrals for individuals who suffer from an employment handicap resulting from a physical or mental handicap,

 

• Summer youth employees,

 

• Supplemental Nutrition Assistance Program benefits recipients, or

 

• Supplemental Security Income benefits recipients.

 

Starting in 2016, the list of targeted groups has been expanded to include qualified long-term unemployment recipients, which is defined as people who have been unemployed for at least 27 weeks, including a period (which may be less than 27 weeks) in which the individual received state or federal unemployment compensation.

Special rules apply to summer youth employees, and the first-year qualified wage limit for them is only $3,000. In addition, there are four categories of veterans with qualified wage limits of $6,000, $12,000, $14,000 or $24,000, depending on his or her circumstances. The highest qualified wage limit for veterans ($24,000) goes to those who are entitled to compensation for a service-connected disability and unemployed for a period or periods totaling at least six months in the one-year period ending on the hiring date.

The next step is to evaluate whether a new hire meets the other requirements of the credit. You won’t be eligible for any credit if a new employee:

• Worked for you fewer than 120 hours during the year,

 

• Previously worked for you, or

 

• Is your dependent or relative.

 

You also can’t claim a credit on wages paid while you received payment for the employee from a federally funded on-the-job training program. And you can take the credit only if more than 50% of the wages you paid an employee were attributable to working in your trade or business.

Obtain State Certification

Last but not least, to take this credit, you must be able to show proof from your state’s employment security agency that the employee is a member of a targeted group. In order to do this, you must either:

• Receive the certification from the state agency by the day the individual begins work, or

 

• Complete IRS Form 8850 on or before the day you offer the individual a job and receive the certification before you claim the credit.

 

If you use Form 8850, it must be submitted by the 28th calendar day after the individual begins work. On March 7, the IRS extended the deadline until June 29, 2016, for employers to apply for certification for members of targeted groups (other than qualified long-term unemployment recipients) hired (or to be hired) between January 1, 2015, and May 31, 2016. Qualifying new hires must start work for that employer on or after January 1, 2015, and on or before May 31, 2016.

June 29 is also the extended deadline for employers that hired (or hire) long-term unemployment recipients between January 1, 2016, and May 31, 2016, as long as the individuals start work for that employer on or after January 1, 2016, and on or before May 31, 2016. For long-term unemployment recipients hired on or after June 1, Form 8850 must be submitted by the 28th calendar day after the individual begins work.

The IRS is currently modifying the forms and instructions for employers that apply for certifications for hiring long-term unemployment recipients. But it’s expected that the modified forms will require new hires to attest that they meet the requirements to qualify them as long-term unemployment recipients. Guidance from the U.S. Department of Labor states, “In the interim, employers and their representatives are encouraged to postpone certification requests for the New Target Group until the revised forms are available.”

Timing Is Critical

If you’re planning to hire new employees in 2016, the Work Opportunity credit offers a simple way to lower your tax liability. It doesn’t require much red tape, except for obtaining a timely certification of the employee from your state employment security agency. Your tax adviser can help you determine whether an employee qualifies, calculate the applicable credit and answer other questions you might have. But, if you postpone applying for certification, you could lose out.

(Source: Bisection.com)

Is it Worth Paying Employees Under the Table?

Is it Worth Paying Employees Under the Table?

Let’s face facts, it can get confusing handling a business’s finances. Payroll alone includes having to figure out things like figuring out tax reductions, keeping records, reporting employee’s income, etc and so on. The good news is that there is a way to avoid all of that. You can just pay your employees under the table. For those unfamiliar with the term, paying an employee under the table means they get paid off the record. You give them cash for their time instead of an official paycheck. No taxes, no reporting, and no confusion. This is more commonly found in smaller businesses. There is a catch though, if you are caught paying your employees under the table, a whole world of stress is going to land on your shoulders.

Why do we pay taxes? Because taxes are kind of like the rent we have to pay to live in this country. They pay for our infrastructure, our schools, our government funded programs, and much more. Not everyone likes paying them, but simply put, taxes keep our country in motion. When you don’t pay taxes, you are not doing your part to help keep America moving forward. If that rousing speech didn’t convince you that paying employees under the table isn’t worth the risk, this next part sure will.

Penalties of Not Paying Taxes

You are reliable for the employment taxes that have to be paid for your employees. There is no way around paying them. If you pay an employee a regular paycheck, the taxes will be taken out from what they earn. If you pay an employee under the table and the IRS finds out about it, you are going to have to pay all that money yourself, and then some. Sounds bad right? Well that is just the beginning. It can get far worse than just paying the taxes with your own money. There is also the fact that paying employees under the table is illegal, and carries the same risks as any illegal activity.

Can you really get put in jail for paying employees under the table? Absolutely, in fact it is not an uncommon site to see employers face jail time for it, along with paying fines for it outside the taxes that they owe. Sometimes the jail sentences can be lengthy as well, depending on how long you have been paying employees under the table, and how much tax money wasn’t paid because of it. In Massachusetts, for example, groups found paying their employees faced a possible 57 years in prison.

What Happens to Employees

The part that is worse than what happens to you, is what can happen to your employees. They know they are getting paid under the table, and yet are not reporting it to the IRS. This is kind of like being guilty by association. It gets more severe if they ever get audited. If the IRS finds out they have been getting paid more than they are reporting when they are filing their tax returns, they face fines for the taxes, along with potential jail time. It goes without saying if one gets caught, the other gets caught as well. So if you pay employees under the table and get caught, the employees are likely to go down with you.

Even if you get away with it, you are still hurting your employees more than you are helping them. Because they are getting paid off the record, when they apply for loans for homes, cars, or just in general, there will be no record of pay stubs, something that many loan companies look at. When it comes time to retire, the entire time they were getting paid under the table isn’t going to show up on their social security payments, meaning they might end up with less retirement payouts.

We can understand the temptation of taking a short cut and paying employees under the table, and hopefully you now understand the extreme risks of it. Luckily, there is another way that you can do payroll without worrying about all the complicated parts of it. Vision H.R. has an experienced staff that can handle your payroll effectively, make sure your employees get paid on time, and keep detailed records of your payroll. All you have to do is make the money. Visit Vision-hr.com today for a free quote.

Payroll Services

Vision HR | The Human Resource Experts

Can We Match Our Employees’ Pretax HSA Contributions?

Can We Match Our Employees’ Pretax HSA Contributions?

Question: Under our company’s cafeteria plan, qualifying participants can make pretax salary reduction contributions to their Health Savings Accounts (HSAs). Can our company make matching contributions based on a percentage of participants’ pretax HSA contributions?

Answer: Probably. Some employers’ HSA contributions are subject to strict comparability requirements that effectively prohibit matching contributions because the contributions would trigger a 35% excise tax on the employer. To be comparable, contributions generally must be the same dollar amount or the same percentage of the high-deductible health plan deductible — a standard that matching contributions cannot satisfy.

But the comparability requirements don’t apply to employer HSA contributions that are made “through a cafeteria plan.” Because your company’s cafeteria plan permits eligible participants to make pretax salary reduction contributions to their HSAs, any matching (or other) employer contributions would also be treated as made “through a cafeteria plan.”

IRC Requirements

Instead of comparability, your company’s contributions (as well as participants’ pretax HSA contributions) would be subject to Internal Revenue Code Section 125’s nondiscrimination requirements. Sec. 125 addresses:

• Eligibility,
• Contributions and benefits, and
• Key employee concentration tests.

Generally, these tests provide more flexibility for employers wishing to vary HSA contributions on a nondiscriminatory basis. But even that flexibility has its limits. For example, if nonkey employees make only small contributions or don’t contribute at all, contributions by key employees could cause the cafeteria plan to fail the key employee concentration tests. Thus, any matching contribution should be carefully designed to satisfy the applicable nondiscrimination rules.

ACA Impact

Matching HSA contributions (like other employer HSA contributions) are typically treated as employer-provided coverage for medical expenses under an accident or health plan. Therefore, they’re excludable from a participant’s gross income.

They also will be taken into account when determining whether your company is subject to the Affordable Care Act’s excise tax on high-cost health coverage. Commonly referred to as the “Cadillac tax,” this provision isn’t currently scheduled to take effect until January 1, 2020.

Once your company’s matching HSA contributions are made, they are nonforfeitable. That means they cannot be subject to a vesting schedule or be returned to the employer if the participant terminates employment midyear.

Aggregation a Must

Keep in mind that HSA contributions are subject to annual dollar limitations. All contributions that are made for a year to a participant’s HSA — whether by the participant, your company, or another entity or individual — must be aggregated for purposes of applying these limits. If your company decides to make matching HSA contributions, this should be reflected in the cafeteria plan document, the cafeteria plan summary and other applicable communications (such as open enrollment materials). 

(Source: www.bizactions.com)

IRS Extends Due Dates for 2015 Forms 1094 and 1095

IRS Extends Due Dates for 2015 Forms 1094 and 1095 At the end of last year, the IRS extended the deadlines for the Affordable Care Act’s information reporting on Forms 1094 and 1095 for 2015. Specifically, Forms 1094-B and 1095-B are to be filed by providers of health coverage (mostly insurers, but also some self-insuring employers and others). Meanwhile, Forms 1094-C and 1095-C are to be filed by applicable large employers. The forms provide information to the IRS and individuals for administration of the individual mandate, employer shared responsibility and premium tax credits. Mark Your Calendar The extended deadlines are as follows: Furnishing statements to individuals. The deadline for furnishing Forms 1095-B and 1095-C to individuals is extended by two months — from February 1, 2016, to March 31, 2016.  Filing paper returns with the IRS. The deadline to file paper Forms 1094-B and 1094-C (and accompanying Forms 1095) with the IRS is extended by three months — from February 29, 2016, to May 31, 2016.  Filing electronic returns with the IRS. The deadline to file electronic Forms 1094-B and 1094-C (and accompanying Forms 1095) with the IRS is extended by three months — from March 31, 2016, to June 30, 2016. (Electronic filing is mandatory for entities required to file 250 or more Forms 1095.) Don’t Ask for More These extensions are automatic and supersede any extension requests already submitted for 2015. Any such requests won’t be formally granted. The new deadlines are more generous than otherwise available extensions, so they cannot be further extended. Those unable to meet the extended due dates are still encouraged to furnish and file as soon as possible. The IRS says it will take such furnishing and filing into consideration when determining whether to abate penalties for reasonable cause. Other considerations will include whether: Reasonable efforts were made to prepare for 2015 reporting (such as gathering data and transmitting it to a filing agent, or testing the ability to transmit information to the IRS), and Steps have been taken to comply with the 2016 reporting requirements. Notwithstanding the extensions, the IRS encourages employers and coverage providers to furnish statements and file returns as soon as they’re ready. So Be Ready The extended deadline for furnishing statements to individuals falls just two weeks before the April 15 filing deadline for individual tax returns. The IRS has also provided relief for individuals who will have already filed an individual return before receiving a Form 1095. You might mention to your employees that, generally, they’re not required to file an amended return so long as they keep the Form 1095 with their tax records.

Small Business Owners, Here’s How To Claim Your Credit Just a couple of weeks before extending the deadlines for Forms 1094 and 1095 (see main article), the IRS released the 2015 version of Form 8941. This should be of particular interest to small-business owners, because Form 8941 can be used by eligible small employers to calculate the small business health care tax credit. Generally, this tax break is available to employers that: Have fewer than 25 full-time equivalent employees, Pay average annual wages of less than $50,000 (indexed for inflation), and Contribute a uniform percentage of at least 50% of the premium costs for employee health insurance coverage. The maximum tax credit is generally 50% of premiums paid (35% for tax-exempt eligible small employers, subject to a reduction for sequestration). Once calculated, the credit is claimed as a general business credit on Form 3800 (or, by tax-exempt small employers, as a refundable credit on Form 990-T). The 2015 version of Form 8941 is virtually unchanged from 2014, other than references to the filing year and use of the updated maximum annual wages amount of $52,000. Although the inflation-adjusted threshold for 2015 is $51,600, the rounding rule required for calculating average wages results in $52,000 being the effective limit for purposes of 2015 Form 8941. The instructions identify the information needed to calculate the credit and include worksheets to determine the number of employees and average wages. An additional worksheet helps calculate the average premium for the small group health insurance market for each state where the employer has employees. Finally, the instructions incorporate transitional relief that permits direct enrollment for employers in certain Iowa counties without 2015 Small Business Health Options Program coverage. What’s more, the list of average premiums, by county, for all 50 states plus the District of Columbia has been updated for 2015. These averages are relevant because an employer’s health care tax credit may be reduced if the employer pays premiums greater than the average for the small group market for the state in which its employees work.

(Source: Bisection.com)

Employee Leasing Daytona Beach

Employee Leasing Daytona Beach

             You know that Vision H.R. can help you handle your payroll and human resource management, but did you know they can actually reduce some of your employer liability? Under the Vision H.R. PEO (Professional Employer Organization) business model,  you are not just having Vision H.R. handle payroll and human resource management, you are entering a co-employment agreement, where your employees work for both you, and the Vision H.R. PEO. Although you remain the “Common Law” employer, you can streamline your administrative tasksunder this agreement and Vision H.R. becomes more of a partner sharing risk and liability of your employees, improving the workplace and providing valuable time back to your workforce. 

            How do you benefit from all of this? There are quite a few ways that a co-employment arrangement can work for you. To begin, let’s list what services a Vision H.R. PEO can cover. 

Payroll and payroll tax administration

Unemployment administration

Workers’ compensation

Human Resource Compliance

Policies and best practices

Performance management

Training and development

Employee benefits & 401k

That is quite a bit of weight lifted off your shoulders. So back to the original question, how do you benefit from using Vision H.R. PEO ( Employee Leasing) handling these responsibilities?

• No Need to Hire Payroll and Human Resource Workers: Vision H.R. will fill the role of your payroll department, and human resource department. Simply allow a designated person to submit hours online and compliant, error free payroll can be administered.  Designate someone at your organization who would communicate with our Human Resource Experts and we would offer assistance, guidance and any HR assistance.  This clears up money that would be spent paying additional salary for seasoned experts in the payroll or HR fields, and frees up human capital to be able to grow your business.

 

• Less Liabilities for You: Because your employees would be considered co-employed, you reduce some of the liability of having employees.

 

• You Stay in Control:Just because your employees are co-employed by Vision H.R. PEO, that doesn’t mean you have any less control of your business. Vision H.R. will take care of human resource management and payroll services, but the big decisions about running the business itself still belong to you.As the “common Law Employer, you still hire, manage, direct and terminate employees.  Vision H.R. is there to give you the confidence to make those tough HR decisions and to streamline your administrative tasks giving you back more time.

 

• Better Benefit Packages: Because Vision H.R. will be co-employing your employees, they can often findmore comprehensive benefits packages by customizing your benefits to better fit the needs and budget of your workforce.  

 

            Have more questions about Vision H.R. PEO (Employee Leasing)  and how it can benefit your company? We offer a free quote to help you understand our services and how much they will cost your company before you sign into any arrangement. We understand this can be a big decision, and want you to enter it feeling confident about the results you will get. You can also contact us by calling (877) 641-0012 or by emailing us at sales@vision-hr.com.

Employee Leasing Daytona Beach

Vision HR | The Human Resource Experts

Every Word Counts when Crafting Your Employee Handbook

Every Word Counts when Crafting Your Employee Handbook

A fundamental requirement of the National Labor Relations Act (NLRA) is that employers must not “interfere with, restrain or coerce employees in the exercise of their rights” to organize into labor unions, collectively bargain and engage in similar “concerted activities,” according to § 8(a)(1) of the law.

In general, “concerted activities” occur when at least two employees take actions intended to improve their wages or working conditions. It can also mean action taken by one employee, such as communication with a supervisor. What that actually means in practical terms is spelled out on a case-by-case basis.

The U.S. Court of Appeals for the District of Columbia Circuit recently did just that in the case of Hyundai America Shipping Agency, Inc. v. National Labor Relations Board (No. 11-1351). The litigation began when a terminated employee, Sandra McCullough, complained to the National Labor Relations Board (NLRB) that she’d been fired for engaging in “protected concerted activities.”

Employee Firing Not an Issue

Her allegation was based on activities prohibited in the company’s employee handbook. The NLRB took up her cause. However, an NLRB administrative law judge said in a court ruling that McCullough would’ve been fired “regardless of whether she had violated any of the challenged [handbook] rules.” She was subsequently removed from the case. Even so, the Board maintained its complaint against Hyundai America Shipping Agency on the basis of the contents of its employee handbook.

The NLRB took issue with the first three of the following four handbook rules:

1. The “investigative confidentiality rule,” prohibiting employees from discussing matters under investigation by the company.
2. The “electronic communications rule,” limiting the disclosure of information from the company’s electronic communication system.
3. The “working hours rule,” prohibiting activities other than work during working hours, and
4. The “complaint provision,” urging employees to make complaints to their immediate supervisors rather than to fellow employees.

Implied Restrictions

None of these rules explicitly violates § 8(a)(1) of the NLRA, though that isn’t the only test. If employer rules (or actions) “could reasonably be construed by employees to restrict” protected activity, they would still violate the law, according to the court. “Even in the absence of enforcement, mere maintenance of a rule likely to chill [protected activity] … can amount to an unfair labor practice.”

Investigative confidentiality. The court concluded that the rule did clearly limit the rights of employees to discuss their employment. The court then looked for Hyundai to present a “legitimate and substantial business justification for the rule, outweighing the adverse effect on the interest of employees.” In response, Hyundai pointed out that federal rules require confidentiality when investigations involve allegations of sexual harassment. But because Hyundai didn’t limit the rule to such cases, the court ruled that it was “overbroad” and shot it down.

The electronic communication rule. A similar conclusion was drawn about this rule, which stated: “Employees should only disclose information or messages from these systems to authorized persons.” If the rule had applied only to specific categories of information where there was a clear justification for maintaining confidentiality (such as a hospital’s need to protect patient privacy), it would have been acceptable.

The working hours rule. Hyundai’s employee handbook stated in its working hours rule that performing activities other than company work during work hours would be grounds for discipline or termination.

The problem with the working hours rule was partly in the phrasing. The Board contended that “working hours” includes paid break times such as coffee breaks. The court supported that argument. Under the NLRA, employees are allowed to engage in union-related activities during break time when employees are still paid.

Finally, the court looked at the question of the remaining rule.

The complaint provision rule. This rule reads as follows: “Voice your complaints directly to your immediate supervisor or to Human Resources through our open door policy. Complaining to your fellow employees will not resolve problems. Constructive complaints communicated through all the appropriate channels may help improve the workplace for all.”

The NLRB argued that this policy would prevent employees from discussing their working conditions, a form of concerted activity. However, after a careful review of the language, the court found no fault with this rule.

Conversely, in a similar case, the NLRB took issue with the complaint provision rule implemented by another employer (Guardsmark). However, in the Guardsmark case, the NLRB won. The court said the employer’s company handbook used strict language and included penalties for rule violations. In contrast, the wording in the Hyundai handbook offered alternative actions when violations occur, and left the door open for employees to complain among themselves without penalty.

As this case illustrates, the precise language in employee handbooks is critical. That’s why it’s a good idea to have your handbook and any possible amendments to it reviewed by a qualified labor law attorney.

(Source: www.bizactions.com)

Get Out There and Vote (If You Can)

Get Out There and Vote (If You Can)

As you may have noticed, it’s election time again in America. People are wearing shirts for their favorite candidates, signs are outnumbering yard flamingos, and Facebook is a battlefield of comments and debates, and for good reason. This election year is one for the history books, with some of the most unique candidates an election has ever had. Now we are not here to try and convince you who to vote for, we are simply telling you how you can get out and vote.

The first voting date, where you vote in the Presidential Preference Primary Election, (Where citizens vote on who will be on a party’s nationwide ballot), takes place on March 15th in Florida, which is a Tuesday. Many people work throughout the week, and may want to head to the voting booths even though their job asks them to be at work. If you are one of those people who want to cast your vote, but can’t make it because of the hours you work, what can you do?

Each state has it’s own laws on the matter, with some requiring a company give employees time off to vote, while others don’t. Florida falls under the latter, not requiring business owners to award time off to it’s employees for voting purposes. This doesn’t mean you won’t be able to cast your vote however, just that you have to get permission from your boss to do so. Before you ask your boss to get time off for voting, there are a couple of things you should consider first.

• Do you have time to vote?:Voting can be done between 7:00 A.M. and 7:00 P.M.If your job schedule allows for reasonable free time within that time period, your boss might be less inclined to allow you time off from work to vote. If you have children that you have to drop off or pick up from school and take care of when you are off work, this wouldn’t count as reasonable free time.

 

• What Does your Employee Handbook Say?: Just because the state says your boss doesn’t have to give you time off to vote, doesn’t mean he won’t. Many businesses allow employees time to vote, either letting them come in late, leave early, or take a couple hours off in the middle of the day. Check your employee handbook for your job’s stance on voting leave.

 

If you don’t have enough free time to vote, and your employee handbook doesn’t make any claims on how you can take time off for voting, then the next step is to talk to your boss directly. Most bosses will be understanding, maybe even taking time off themselves to vote, so don’t be nervous asking them for a little time off. When you do talk to your boss, remember these few points.

• Don’t Ask Last Minute: Like asking for any time off, voting or not, ask for time off in advance. This will give your boss time to work out a schedule that allows you, and others, time to vote without disrupting business. There is a good possibility you won’t be the only one wanting to get out and vote, and the job can’t just shut down and let everyone out to the voting booths, so give them an early warning about you wanting to take off.

 

• Explain your Reasons: As we said before, even if you have time off of work during voting times, you might not be able to vote during them due to other obligations. Explain to your boss the only time you would be able to vote is while your children are in school, so you need time off from work to vote, or any other reason why you need time off of work for voting.

 

• Don’t Assume it’s Okay: The worse thing you can do is leave work, come in late, or leave early to vote without telling your boss, or coming in the day of voting and telling them. They might have a plan for the day that you just threw off, and can build general distrust in their ability to rely on you.

 

• Don’t take it as a Break: If your boss allows you time off to vote, don’t take advantage of it. You are being allowed time off to vote, not stop for a quick bite or some shopping afterwards. This doesn’t mean you can’t grab drive-thru on the way back, or ask your boss if it is okay to take a lunch break as well, just don’t take all day to go vote and come back.

 

• Don’t Be Afraid to Vote: While Florida state law doesn’t require business owners to give you time to vote, it does protect you from any discriminatory actions based on your voting. Even if you vote for a candidate that your boss passionately hates, they can not fire you, or take any other disciplinary actions against you for it.

 

The future of America is in your hands, don’t feel like you can’t be a part of it because of your work schedule. Talk to your boss about taking time off of work to vote, so you can make a difference. If you are a business owner, and don’t have an employee handbook already created for your business that states the policies for voting leave, contact Vision H.R. and learn how we can build a comprehensive employee handbook. We help several businesses in Daytona Beach with payroll services, human resource management, and even management training.  To get your company ready for voting day, contact us at (877) 641-0012 for a free quote.

Daytona Beach Voting Leave

Vision HR | The Human Resource Experts

Good News in the New Year: IRS Extends ACA Filing Deadlines

 Good News in the New Year: IRS Extends ACA Filing Deadlines

Employers and other organizations got some good news from the IRS for the start of the new year. The tax agency announced that it’s extending the due dates for filing 2015 Affordable Care Act (ACA) information returns. This gives employers extra time to complete two tasks:

1. Provide the forms to the recipients and

2. File the forms with the IRS.

Background information. Under Internal Revenue Code Section 6055, health coverage issuers, certain employers, and others that provide “minimum essential coverage” to individuals are required to file information returns containing the type and period of coverage. They’re also required to furnish related information statements to covered individuals, beginning with calendar year 2015. If your entity is subject to these reporting requirements, you must file IRS Forms 1094-B, “Transmittal of Health Coverage Information Returns,” and 1095-B, “Health Coverage.”

Code Section 6056 requires applicable large employers (ALEs) to report to the IRS information about the health care coverage, if any, they offered to full-time employees (for example, an individual who is employed on average for at least 30 hours of service per week). This information is needed in order to administer the employer shared responsibility provisions of the ACA and to assist in determining eligibility for the premium tax credit. ALEs are generally defined as employers with at least 50 full-time employees (including full-time equivalent employees) in the previous year.

ALEs are required to file Form 1094-C, “Transmittal of Employer Provided Health Insurance Offer and Coverage Information Returns,” and Form 1095-C, “Employer Provided Health Insurance Offer and Coverage,” with information about the health care coverage, if any, they offered to full-time employees. 

How Much Extra Time Do You Get?

The original deadlines for filing 2015 ACA information returns were the same as for filing W-2 and 1099 forms. In other words, they were required be filed with the IRS no later than February 29, 2016 (March 31, 2016, if filed electronically). Employers could apply for a 30-day extension of the deadline by filing an IRS form.

In addition, employers were originally required to provide 2015 ACA statements to employees no later than February 1, 2016 (because January 31, 2016 is a Sunday). 

If you’re not filing electronically, the IRS has now extended the due date:

• To March 31, 2016 for furnishing to individuals 2015 Forms 1095-B and 1095-C (from February 1, 2016).
• To May 31, 2016 for filing with the IRS 2015 Forms 1094-B, 1095-B, 1094-C, and Form 1095-C (from February 29, 2016). If you’re filing electronically, the deadline is now June 30, 2016 (from March 31, 2016).
  

The IRS is prepared to accept the information returns on Forms 1094-B, 1095-B, 1094-C, and 1095-C beginning in January 2016. However, following consultation with stakeholders, the U.S. Department of the Treasury and the IRS determined that some employers, insurers, and other providers of minimum essential coverage need additional time to adapt and implement systems and procedures to gather and report the required information. 

Will You Be Able to Get Further Extensions after these Deadlines?

In view of the extensions announced recently by the IRS, the provisions regarding automatic and permissive extensions of time for filing information returns and permissive extensions of time for furnishing statements won’t apply to the extended due dates. In other words, there will be no further extensions.

Are There Penalties for Not Filing?

Employers or other coverage providers that don’t comply with the new deadlines will be subject to penalties for failure to timely furnish and file. However, employers and other coverage providers that don’t meet the extended due dates are still encouraged to furnish and file, and the IRS will take such furnishing and filing into consideration when determining whether to abate the penalties for reasonable cause.

In addition, the IRS will take into account whether an employer or other coverage provider made reasonable efforts to prepare for reporting the required information to the IRS and furnishing it to employees and covered individuals. These efforts include gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS, or testing an employer’s ability to transmit information to the IRS. The tax agency will also consider the extent to which the employer or other coverage provider is taking steps to ensure that it’s able to comply with the reporting requirements for 2016.

What about Individual Taxpayers?

The new IRS notice also provides guidance to individuals who might not receive Form 1095-B or Form 1095-C by the time they file their 2015 personal income tax returns (because their employers took advantage of the extension opportunity).

In these cases, according to the IRS Notice, “individuals who rely upon other information received from employers about their offers of coverage for purposes of determining eligibility for the premium tax credit when filing their income tax returns need not amend their returns once they receive their Forms 1095-C or any corrected Forms 1095-C.” Individuals don’t need to send this information to the IRS when filing their returns but should keep it with their tax records.

Need Help?

Contact your tax adviser if you need more information or assistance to comply with the Form 1094/1095 filing requirements.

(Source: www.bizactions.com)

Tap the Brakes: Cadillac Tax Delayed, But Challenges Remain

Tap the Brakes: Cadillac Tax Delayed, But Challenges Remain

As 2015 was winding down, Congress pushed back the effective date of the “Cadillac tax” two years. The much-debated provision of the Affordable Care Act (ACA) will now take effect on January 1, 2020, instead of January 1, 2018. As originally conceived, the Cadillac tax was supposed to affect only particularly generous, or “luxury,” health care plans. But many analysts believe it will, either immediately or eventually, impact quite a few “nonluxury” plans as well. For employers, the immediate road ahead is now free of a particularly looming threat. But, before you get too excited, tap the brakes: There are still plenty of health care challenges with which to contend. Deductibility of the Tax Most Cadillac tax opponents hope that, when the delayed 2020 effective date draws near, Congress will do away with it entirely. And they just might get their wish. There’s much opposition in Congress to the provision, and now opponents outside of government have two more years to press for full repeal. But, even if the Cadillac tax isn’t fully repealed, the 40% excise levy will now be a pretax expense when it goes into effect. This change was folded into the Consolidated Appropriations Act of 2016. Threshold Index Reform Another bit of good news is that the indexing of the Cadillac tax triggering thresholds will continue, even as the effective date of the provision itself is delayed. Critics of the original indexing formula complained that it wouldn’t have reflected the actual increases in the cost of health care benefits. And this disparity was highlighted in an analysis by the Kaiser Family Foundation last year. As background, the value of employer-sponsored coverage for Cadillac tax purposes includes not only the health care plan itself, but also: Employer and employee contributions to Flexible Spending Accounts, Employer (and possibly employee; this question is unresolved) contributions to Health Savings Accounts, On-site medical clinics, and Many other forms of coverage. The Kaiser study projected that, by 2018, when Cadillac tax thresholds were scheduled to be $10,200 for self-only coverage and $27,500 for other than self-only coverage, 26% of employers would have faced Cadillac tax penalties if they didn’t make substantial plan design changes. This percentage was projected to rise to 42% by 2028. So, in addition to pushing back the effective date to 2020, Congress authorized the Comptroller General of the United States and the National Association of Insurance Commissioners to analyze whether the indexing formula can be made more accurate. Cost-saving Opportunities For now, employers still face the same pressure that they would have faced even if Congress hadn’t acted: keeping their health care costs from escalating ever higher. Many forward-looking organizations are focusing on the following cost-saving opportunities: Redoubling efforts to improve employee health. Newer plan designs — such as integrated health care models that tie together basic medical services with dental, vision, behavioral health and disability management — hold promise for cutting costs through improved care coordination. Imposing spousal surcharges. By applying higher cost-sharing formulas, many employers are discouraging spousal coverage when a spouse can be covered under another employer’s plan. Exploring defined-contribution plan design. Some employers are looking to set fixed limits on their shares of employees’ health costs, as they do in the retirement plan realm with 401(k) plans. The challenge, of course, is doing so without violating the ACA’s minimum value requirements. Emphasizing employee engagement. Many employers are bolstering efforts to motivate employees to assume greater responsibility for choosing their health care providers on the basis of quality data and reasonable costs. The Necessity of Balance The delay of the Cadillac tax’s imposition gives you some breathing room in evaluating and designing your health care plan. And the possibility of its permanent repeal should give you some hope. But, in the meantime, the burden of staying compliant with a myriad of other ACA provisions remains heavy. Work closely with your financial and benefits advisers to balance the necessity of providing meaningful benefits to your employees with the business imperative of managing the costs of doing so.

IRS Notice 2015-87 Addresses Many Aspects of the ACA The IRS issued Notice 2015-87 late last year to provide guidance on how various provisions of the Affordable Care Act (ACA) apply to employer-sponsored health plans. The guidance, which includes 26 questions and answers, is generally applicable to plan years beginning on or after December 16, 2015, though it can be relied on for earlier periods. Let’s look at some highlights.   Final IRS rules on Premium Tax Credits The IRS has released final regulations addressing individuals’ eligibility for the ACA’s premium tax credit. The regs cover a number of important points of which employers should be aware. Areas covered include: Wellness program incentives. The regulations finalize the rule that incentives under a nondiscriminatory wellness program that reduce either cost-sharing or premiums generally aren’t taken into account as amounts paid by the plan for purposes of determining the plan’s minimum value or affordability — unless the program is designed to prevent or reduce tobacco use. Thus, wellness incentives are taken into account for affordability and minimum value only if they relate to tobacco use, in which case it’s assumed that the employee qualifies for the incentive. Employer contributions to HRAs. The final regulations retain rules that treat amounts newly made available for the current plan year under an integrated HRA as follows: Amounts that may be used only for cost-sharing (and not for paying premiums) are taken into account in determining minimum value, and Amounts that may be used for paying premiums are taken into account in determining a plan’s affordability, but not for determining minimum value. HRA contributions are taken into account only if the HRA and the primary employer-sponsored coverage are offered by the same employer. In addition, employer contributions to an HRA reduce an employee’s required contribution (or count toward providing minimum value) only to the extent the amount of the contribution is required under the terms of the plan or is determinable within a reasonable time before the employee must decide whether to enroll. Employer contributions to cafeteria plans. For purposes of affordability, the final regulations adopt the rule that an employee’s required contribution is reduced by employer contributions under a cafeteria plan that: 1) may not be taken as a taxable benefit, 2) may be used to pay for minimum essential coverage, and 3) may be used only to pay for medical care within the meaning of Internal Revenue Code Section 213. Postemployment coverage. The regulations provide that an individual who may enroll in COBRA or similar state continuation coverage is considered eligible for minimum essential coverage only for months that the individual is enrolled in the coverage. They further clarify that this rule applies only to former employees (not to current employees with reduced hours) and extend the rule to retiree coverage. Thus, an individual who may enroll in retiree coverage is considered eligible for minimum essential coverage only for the months the individual is enrolled in the coverage. Employer Contributions When required employee contributions to buy employer-sponsored coverage aren’t “affordable,” as defined under the ACA, employees are potentially eligible for premium tax credits and applicable large employers (ALEs) may face liability under the “play or pay” provision. The guidance explains how employer contributions affect employees’ required contributions for the purposes of the affordability requirement. Generally, employer contributions reduce employees’ required contributions as long as they can be used only for medical expenses (including coverage under an employer-sponsored health plan). They can’t reduce the required employee contributions if they can be received as taxable benefits or used to buy non-health benefits. (However, the guidance includes a special rule for employers subject to certain federal prevailing wage laws.) Transitional relief allows employers to treat certain employer contributions not satisfying the general principle as reducing an employee’s required contribution for purposes of the play-or-pay provision for plan years beginning before 2017 if requirements set forth in Notice 2015-87 are met. Unconditional Opt-out Payments Future proposed regulations are expected to address unconditional opt-out payments. These are available to employees declining employer-provided coverage if not conditioned on satisfaction of other requirements (such as proof of coverage from a spouse’s employer). The guidance stipulates that unconditional opt-out payments will likely be treated as increasing employees’ required contributions for employer-sponsored coverage. The IRS generally anticipates that this rule will apply only after final regulations are issued, except that it will apply on adoption to unconditional opt-out arrangements adopted after December 16, 2015. Until the rule applies, employers aren’t required to treat opt-out payments as increasing employees’ required contributions for purposes of reporting or complying with the play-or-pay provision. Because employers using the transitional relief may report on IRS Form 1095-C a lower required employee contribution than applies for determining eligibility for premium tax credits, employees enrolled in coverage via a Health Insurance Marketplace may be found ineligible for advance payment of premium tax credits even though their household income is within the eligibility range. Thus, Notice 2015-87 encourages employers using the transitional relief to notify employees that they can obtain pertinent information about their required contributions using the employer contact telephone number on Form 1095-C. Adjustments to Affordability Standard Under the ACA, “affordability” is determined by whether the coverage offered costs an employee more than 9.5% of his or her annual household income. But there have been some adjustments to this standard. In 2015, the IRS began indexing the percentage of household income that employees may be required to pay for employer-sponsored coverage when determining affordability under the play-or-pay provision. The guidance indicates that indexing applies to all provisions under the ACA that reference the 9.5% standard — including the three affordability safe harbors of the play-or-pay provision. The IRS intends to amend the associated regulations but, in the interim, employers may rely on the indexed percentages (9.56% for 2015 and 9.66% for 2016). Penalty Amounts and Relief Notice 2015-87 confirms the indexed penalty amounts for ALEs under the play-or-pay provision. For 2015 and 2016, here are the penalty amounts: $2,080 and $2,160, respectively, for failure to offer minimum essential coverage to at least 95% of all full-time employees. This penalty is per full-time employee in excess of 30 full-time employees. $3,120 and $3,240, respectively, for offering coverage that isn’t deemed affordable or doesn’t provide at least minimum value to at least one full-time employee. The penalty is per full-time employee receiving a premium tax credit. However, the penalty is also calculated under the method for failure to offer minimum essential coverage. If the calculation under that method results in a lower penalty, the employer pays that lower amount. Adjustments for future years will be posted on the IRS.gov website. Regarding penalty relief, the guidance states that, for returns filed or statements furnished to employees in 2016 (relating to 2015 coverage), penalties for incorrect or incomplete returns or statements won’t be imposed on ALEs that can demonstrate good-faith efforts to comply with the reporting requirements. This relief isn’t available to ALEs that fail to timely file (or furnish a statement) or cannot show a good-faith effort to comply. But the regular IRS rules allowing penalty relief upon a showing of reasonable cause may apply. Similar relief applies to coverage reporting. Definition of “Hour of Service” Notice 2015-87 explains how the “hour of service” rules under the Department of Labor’s regulations apply when determining full-time status under the play-or-pay provision. For example, an hour of service doesn’t include hours after termination of employment or hours paid solely to comply with a workers’ compensation law. But short- or long-term disability leaves generally result in credited hours of service for periods during which the recipient retains employee status and receives disability benefits directly or indirectly funded by the employer. Notably, the guidance states that disability benefits from coverage bought with after-tax employee dollars won’t give rise to hours of service. Moreover, the Department of Labor’s 501-hour limit on crediting paid, nonworked hours doesn’t apply under the play-or-pay provision. The IRS intends to propose these clarifications as regulations under the play-or-pay provision, effective as of December 16, 2015. Notes on HRAs According to Notice 2015-87, Health Reimbursement Arrangements (HRAs) and other employer payment plans generally can’t be used to buy individual health insurance policies, with narrow exceptions. The guidance affirms that retiree-only HRAs can be used to buy individual coverage — even if the HRA balances include amounts credited when the account holders were current employees covered by integrated HRAs. Similarly, Notice 2015-87 affirms that HRAs and other employer payment plans can satisfy the ACA’s mandates if they limit the purchase or reimbursement of individual coverage to policies that provide only excepted benefits (for example, dental coverage). But HRAs other than retiree-only plans will fail to be integrated — and, thus, fail to comply with the ACA — if they can be used to buy individual coverage that isn’t limited to excepted benefits. This is the case even if, in practice: Employees use the HRAs only to buy policies that provide only excepted benefits, and The HRA provides that the individual policy purchases are authorized only when the account holder has other group coverage or after the other group coverage is lost. The guidance confirms that, if a cafeteria plan reimburses the cost of individual coverage (whether through salary reductions, flex credits or other employer contributions), the arrangement is an employer payment plan. Therefore, it can’t be integrated with the individual coverage and will fail to comply with the ACA unless the plan limits reimbursements to coverage that provides only excepted benefits. Last, Notice 2015-87 indicates that, if an HRA can reimburse family members’ expenses, they, too, must be covered by the employer’s other group health plan for their HRA benefit to be considered integrated. A transitional rule waives the coverage requirement for family members for plan years beginning before 2017 if requirements set forth in the guidance are met. The IRS doesn’t mention integration with the group health plan of another employer, which presumably remains available to satisfy the integration requirement for HRAs that reimburse family members’ expenses. Health FSA Carryovers Qualifying Health Flexible Spending Accounts (FSAs) need not offer COBRA coverage unless the qualified beneficiary’s account is “underspent” when a COBRA-qualifying event occurs. In other words, the amount available for reimbursement for the remainder of the plan year must exceed the COBRA premiums for that period. The guidance explains that Health FSA carryovers are included when determining the amount available for reimbursement. In contrast, Notice 2015-87 also states that carryovers aren’t included when determining the COBRA premium, which is based solely on the employee’s salary reduction election and any additional employer contributions. The guidance provides that, even though qualifying Health FSAs aren’t obligated to provide COBRA beyond the end of the plan year, if a Health FSA allows carryovers for non-COBRA beneficiaries, it must allow them on the same terms for similarly situated COBRA beneficiaries. Thus, at the end of the plan year, a qualified beneficiary could potentially carry over up to $500 of unused amounts until the end of the applicable COBRA maximum coverage period, with no premium due. But Health FSAs may limit carryovers to individuals who have elected to participate in the Health FSA in the next plan year and may require that carryover amounts be forfeited if not used within a specified period of time, such as one year. Review the Guidance As you can see, Notice 2015-87 goes into great detail about many aspects of the ACA. It’s particularly important for any employer that’s currently subject to the play-or-pay provision — or that could be in the future — to review the guidance with its health care benefits adviser.

Can We Incentivize Employees With High Claims Costs to Opt Out? Question: Our company offers coverage under a self-insured major medical plan to full-time employees. Can we offer cash incentives to those with a history of high claims costs to opt out of our plan and buy individual policies instead? Answer: In a word, no. This idea was addressed in guidance jointly issued just last year by the IRS, the Department of Labor and the Department of Health and Human Services. The agencies stated that offering a choice between cash and enrollment in an employer’s standard group health plan constitutes prohibited health status discrimination under the Affordable Care Act (ACA) and the Health Insurance Portability and Accountability Act (HIPAA) — if the offer is made to only employees with high claims risk. It may seem like you’re treating high-claims employees more favorably by giving them a choice between cash and coverage — especially now that the ACA guarantees availability of individual coverage without pre-existing condition exclusions. But the agencies don’t view this choice as permitted discrimination in favor of individuals who have adverse health conditions. In fact, according to the agencies, these employees have a greater effective cost of coverage because their cost is deemed to include the cash they’ll forgo if they elect to enroll in your plan. In addition, the cash-or-coverage offer is considered to be an eligibility rule that discourages plan participation based on a health factor. Additional Points of Concern Indeed, the agencies view these arrangements as discriminatory, regardless of whether: The cash payment is pretax or after-tax to the employee, The employer is involved in the selection or purchase of individual insurance policies, or The employee obtains any individual coverage. And because choosing between cash and tax-favored health coverage requires a cafeteria plan election, the agencies assert that imposing an additional cost to elect health coverage could result in prohibited discrimination under Section 125 of the Internal Revenue Code. Note also that you couldn’t condition availability of any financial incentive (whether or not based on health or claims history) on the employee’s actual purchase of an individual insurance policy. Doing so creates an employer payment plan that violates the ACA’s prohibition on annual dollar limits, as well as the requirement to provide coverage of preventive services. Violating these provisions can result in substantial excise taxes. Moreover, the proposed incentive might raise concerns under HIPAA’s privacy rule if you’re considered to be using protected health information (in this case, health or claims history) for a purpose unrelated to plan administration (that is, to identify employees eligible for the cash incentive). Other federal laws, such as the Americans with Disabilities Act or the Age Discrimination in Employment Act, could also be implicated. Wrong Way When considering going this route with your health care plan, it’s best to imagine one of those “wrong way” signs you see while driving. Despite your good intentions, you’ll quickly find yourself headed straight for some serious compliance issues.

(Source: www.bizactions.com)

Do After-Hours Communications Qualify for Overtime Pay?