New Jersey employers can breathe a sigh of relief, as Governor Christie has announced that new fiscal management practices have brought New Jersey’s Unemployment Insurance Trust Fund into solvency for the first time since 2009. This spares businesses from a drastic tax surcharge, as Federal Unemployment Tax (FUTA) was set to increase from the base rate of 0.6% ($42 maximum per employee) to 1.5% ($105 maximum per employee). The surcharge is imposed when a state has borrowed from the Federal Unemployment Trust Fund and increases each year. In 2012, NJ employers paid 1.2% due to the surcharge ($84 maximum per employee). By repaying the loan to the Feds, employers will not be subject to this surcharge on their 2013 FUTA wages and will only pay the base rate of 0.6% ($42 maximum per employee).
Many NJ businesses have recently received a solicitation concerning “Annual Corporate Records Form”. The mailing, which has an official appearance, solicits a fee of $125 in return for the recording of corporate shareholders, directors and officers. The Division of Revenue is alerting all New Jersey businesses that there is no requirement to file this form State of New Jersey, and the sender isn’t affiliated with the State.
New Jersey businesses that receive the mailing may report it by:
- Filing a complaint with the New Jersey Division of Consumer Affairs, PO Box 45025, Newark, NJ 07101 (complaint forms can be downloaded at http://www.nj.gov/oag/ca/complaint/ocp.pdf)
- Contacting the United States Postal Inspections Service to report mail fraud at (877) 876-2455 or http://postalinspectors.uspis.gov/forms/MailFraudComplaint.aspx.
As predicted after the Supreme Court’s ruling on the Defense of Marriage Act (DOMA) in June 2013, the IRS has announced that the government will be issuing regulations that will allow same-sex couples to file joint tax returns. This will pertain only to the 13 states that recognize same-sex marriage (New Jersey isn’t one of them). They will also be allowed to move freely throughout the country and their filing status will not change.
Ignoring a tax debt could cost you more than you might think. Approximately 16,000 delinquent New York taxpayers were recently informed that their driving licenses will be suspended if they don’t pay up. Businesses or individuals who owe less than $10,000 will not be affected. New York is following the lead of California, which passed a similar law in October 2011.
Beginning 2012, employers no longer receive an annual paper Notice of Employer Contribution Rates. Instead, the notice is now accessible through the Tax Web Enabled System (TWES). As a result of this change, it’s urgent that you check your TWES account as soon as possible. The new rates were posted as early as July 18, and there’s a 30 day deadline (from the date of “mailing”) to make a voluntary contribution. In many circumstances a voluntary contribution represents an excellent opportunity to reduce labor costs. For more information regarding TWES check out our blog at: Set Up TWES Account.
The unemployment expense is a substantial component of your labor cost. Staffing agencies should give it careful attention. If you wish to make a voluntary contribution to your reserve balance you have 30 days from the date of your notice to do so. In addition, we suggest that you verify the amount of the employer contributions and the benefits charged to your account. Report any discrepancies to the NJ Dept. of Labor.
If you would like assistance in determining if a voluntary contribution will save you money, please do not hesitate to contact us. We will provide you with an illustration of the benefits which you stand to reap from making such a contribution. You will be able to weigh the considerations and act accordingly.
If your company uses payroll cards to compensate its employees, watch out. New York Attorney General Eric Schneiderman has launched an investigation into companies that pay hourly employees by depositing payroll onto pre-paid cards. Why the concern? Payroll cards, like debit cards, typically have fees associated with inquiries, card replacement, ATM withdrawals, or inactivity. Schneiderman’s concern is that the fees associated with these cards may be insufficiently disclosed or excessive and that the fees reduce employees’ take home pay. Payroll cards can raise a host of legal issues for the employer as well. For example, federal law prohibits mandatory use of the cards as a condition of employment. It has been reported that many employees have been forced to accept the card. It would be highly advisable for employers to seek competent counsel to ensure their compliance before it’s too late.