Payroll News

Earned Income Tax Returns

Please read this letter from Berkheimer Tax Administrator in regards to earned income tax returns and ACT-32.

What to do if your Employer Does Not Provide You With a W-2

Contact Your Employer

Federal law requires your employer to provide you with a W-2 by January 31 of each new year. If you do not receive your W-2 by this deadline, contact your employer immediately.

Double-check the address your employer has on file for you to ensure that he sent your W-2 to the correct address. Your employer must send you a duplicate W-2 to your correct address within two weeks.

Estimate Your W-2 Amounts

If you do not get your W-2 from your employer, you will need to estimate your wages and tax withheld for the year before you can ask the IRS for a replacement W-2.

To estimate these amounts, look at your last pay stub for December. Multiply the wages listed on this pay stub by the number of times per month you get paid.

For example, if you made $900 before taxes and get paid twice a month, multiply $900 by 2. Multiply this total by 12 to estimate your wage amount over 12 months. Repeat this process for your taxes withheld.

When to Contact the IRS

Contact the IRS only if you have attempted to obtain your W-2 from your employer without success. You cannot request a duplicate W-2 from the IRS before February 16.

The IRS will ask you for information such as your employer's name and address as well as for your personal information. You will need to provide the IRS with your estimate of your wages and taxes withheld for the year.

Use Substitute W-2

If you do not receive a new W-2 from the IRS by the time you are ready to file your taxes, use Form 4852 as a substitute W-2 form.

Put your personal information; the name and address of your employer; and your estimate of your wages and taxes withheld on this form. You must also state on this form that you contacted your employer and the IRS regarding this issue.

Use the amounts on Form 4852 to complete your tax return. If you receive your W-2 after filing your taxes, amend your tax return to reflect the exact amounts by filing form 1040X.

Pennsylvania Unemployment Rate Changes

The Pennsylvania Department of Labor has informed ECCA that rate change notices for 2012 unemployment will not be sent out until April 1, 2012.

According to the DOL's regional manager:

"The PA UC Employee Withholding percentage for 2012 will be .8% (.0008), which is based on employees' total gross wages each quarter.

The Office of UC Tax Services is currently mailing a letter to employers with information about the reduction of FUTA credit for 2012 and the delay in mailing the 2012 UC rate notices. The part of the letter regarding the latter states the follows:

 "The 2012 PA Unemployment Contribution (UC) rate notices usually mailed on Dec. 31 will be delayed. The rate notices will be mailed prior to April 1, 2012, the beginning of the 1st Quarter 2012 filing period."

Although the delay in mailing the 2102 UC rate notices presents an undue burden for employers and tax preparers, we are working diligently to ensure that the rate notices are mailed before April 1, 2012."

Payrolls processed during the period from January 1, 2012 until the rate notice is received will have the employer portion of PA State Unemployment calculated at the 2011 rate.

Once the new rate is published, a reconcilliation process will be performed to resolve any variances caused by this delay. This may result in additional funds being debited from your bank account.

Social Security Tax Rate

The Federal Government has extended the employee 4.2% Social Security tax rate through February 28, 2012.

Federal Unemployment Tax

There is a Federal Unemployment Tax (FUTA) payment increase that affects 20 states. Employers in these states owe an increased amount of FUTA payments for 2011.

Employers in the following states will pay an increase of 0.3%:

• Arkansas
  
• California
  
• Connecticut
  
• Florida
  
• Georgia
  
• Illinois
  
• Kentucky
  
• Minnesota
  
• Missouri
  
• Nevada
  
• New Jersey
  
• New York
  
• North Carolina
  
• Ohio
  
• Pennsylvania
  
• Rhode Island
  
• Virginia
  
• Wisconsin
  

Indiana: Employers will pay an increase of 0.6%.

Michigan: Employers will pay an increase of 0.9%.

The increase in FUTA tax is on 2011 taxable wages up to $7,000 per employee. It is due with the filing of the 940 annual return.

For customers enrolled in ECCA's Full Tax Service, ECCA will pay these funds on January 1, 2012. A preliminary reconciliation of our tax trust account will be performed by February 1, 2012. We will send out any notices in the event that we have to debit funds from your bank account.

If you are not enrolled in our Full Tax Service, you as the employer should review the reports provided by ECCA so that you can make the proper deposit to the IRS by January 31, 2012.

Pennsylvania ACT 32

For information regarding Pennsylvania ACT 32 and the Certificate of Residency form, please visit this page.