Important Year End Updates for Staffing Company Owners

Important Year End Updates for Staffing Company Owners

As 2017 comes to a close and 2018 sneaks up on us, important tax and wage changes are on the horizon.

We’ve put together a list of the top changes that you’ll need to prepare your staffing / consulting business for 2018. From minimum wage increases, to states with changing tax tables, to Earned Income tax Credit notice requirements, we’ve collected the information you need to face the tax changes coming in 2018 with confidence.

Earned Income Tax Credit Notice Information:
For 2017, you are encouraged to notify the following employees that they may be able to claim EIC on their 2017 tax returns:

  • Employees with one qualifying child and wages less than $44,846.  The employee’s copy of Form W-2 TRICOM prepares has the required statement about the EIC on the back of the form.  

There are seven states that require employers to provide some additional notification to their employees about their possible eligibility for earned income credit. The following states allow employers to use Federal Notice 797:

  • California
  • Illinois
  • Louisiana
  • Texas

The following states require the use of a state-specified form:

  • New Jersey
  • Virginia
  • Maryland

Once these documents are updated for the current year, they will be available on TRICOM’s website under: http://tricom.com/resources/tax-tools. Please contact your TRICOM Accounting representatives if you have any questions.

Minimum Wage Increases:
The following states will implement changes to their minimum wage for 2018:
 

State

2018

2017

Change

Alaska

9.84

 9.80

0.04

Arizona

10.50

 10.00

0.50

California -1

11.00

 10.50

0.50

Colorado

10.20

 9.30

0.90

Florida

8.25

 8.10

0.15

Hawaii

10.10

 9.25

0.85

Maine

10.00

 9.00

1.00

Michigan

9.25

 8.90

0.35

Minnesota-3

9.65

 9.50

0.15

Missouri

7.85

 7.70

0.15

Montana

8.30

 8.15

0.15

New Jersey

8.60

 8.44

0.16

New York-2

11.10

 9.70

1.40

Ohio

8.30

 8.15

0.15

Rhode Island

10.10

 9.60

0.50

Vermont

10.50

 10.00

0.50

Washington

11.50

 11.00

0.50

1-Listed for employers with 26 or more employees-employers with 25 or less is $10.50
2-Listed rate for most NY employers; Minimum wage for New York City is $11.00 for large employers (11 or more employees) and $10.50 for small employers
3-Rate listed for large employers (annual sales of $500,000 or more) small employers have minimum wage of $7.87
 

STATE

 

STATE

 

WAGE

WAGE

BASE

BASE

Alabama

$8,000

Nebraska

9,000

Alaska

 

Nevada

30,500

Arizona

7,000

New Hampshire

14,000

Arkansas

10,000

New Jersey

33,700

California

7,000

New Mexico

24,200

Colorado

12,600

New York

11,100

Connecticut

15,000

North Carolina

23,500

Delaware

16,500

North Dakota

 

District of Columbia

9,000

Ohio

9,500

Florida

7,000

Oklahoma

17,600

Georgia

9,500

Oregon

39,300

Hawaii

 

Pennsylvania

10,000

Idaho

 

Puerto Rico

 

Illinois

12,960

Rhode Island (Tier 1)

23,900

Indiana

9,500

Rhode Island (Tier 2)

 

Iowa

29,900

South Carolina

14,000

Kansas

14,000

South Dakota

15,000

Kentucky

10,200

Tennessee

8,000

Louisiana

7,700

Texas

9,000

Maine

12,000

Utah

 

Maryland

8,500

Vermont

17,600

Massachusetts

15,000

Virgin Islands

 

Michigan

 9,000

Virginia

8,000

Michigan (delinquent employers)

 9,500

Washington

47,300

Minnesota

32,000

West Virginia

12,000

Mississippi

14,000

Wisconsin

14,000

Missouri

12,500

Wyoming

24,700

Montana

32,000

 

 

  • Bolded numbers indicate those that have increased.
  • Gray shaded numbers indicate those that have decreased.
  • Yellow highlighted areas indicate those states that have not yet released their wage bases. This information will also be listed on TRICOM.com and updated as information becomes available.

FUTA Reduction States:
For tax year 2017, only California and the Virgin Islands have not repaid their Federal Unemployment Tax loans. Their FUTA Credit reduction rate for 2017 will be 2.1% for each.

State Tax Table Changes:
South Carolina has made changes to their state withholding table for 2018. If you have employees in this state, they may notice a change in their state tax withheld.

Federal Tax Changes:
The following are changes that are being implemented at the Federal level:

  • Social Security Wage Limit has increased from 127,200 to $128,400.  This is an increase for both the employee and the employer of $72.00. The additional .9% Medicare tax on employee wages over $200,000 is still in place for 2018.
  • 401K Limit for 2018 is at $18,500 which is a $500 increase from 2017; the limit on the contribution for individuals age 50 and over remains unchanged at $6,000
  • SIMPLE Retirement Plan still at $12,500 (no change)

Standard Deduction Changes:
The following are additional standard deduction changes:

  • Single & Married Filing Separately: $6,500 (up $150 from 2017)
  • Married Filing Jointly: $13,000 (up $300 from 2017)
  • Head of Household: $9,550 ($200 up from 2017)

Additional State & Federal Tax Topics:

  • For 2018, Oregon’s workers’ compensation premium assessment rate will increase to 7.4% from 6.8%.
  • Starting January 1, 2018, The New York State Paid Family Leave Program will provide New Yorkers job-protected, paid leave to bond with a new child, care for a loved one with a serious condition, or to help relieve family pressures when someone is called to active military service. For employers, the Paid Family Leave benefits will generally be added to an employers existing disability benefits policy. Paid Family Leave coverage is funded by employee payroll contributions. The deduction is .126% of wages (.00126).
  • In 2016, the Social Security Administration (SSA) had moved the usual deadline to submit the W-2’s from March 31 (if filed electronically) to January 31 for all forms of filing. (Electronic and paper). This makes it very important to verify employee’s social security numbers prior to year-end. TRICOM’s Accounting Department is contacting owners to ask them if they would like an employee listing with SSN and address to assist in the process. If there is a change to a social security number after January 31, it will require a W-2C form to be filed and the employee copy will take longer to process.
  • New Jersey Employee Combined Unemployment, Workforce, Disability and Family Leave Rate went down from .765% to .705%.
  • California 2018 SDI rate is 1.0% on the first $114,967 of wages.

For more legislative and year-end updates, please refer to TRICOM.com. We’ll post the latest legislative and tax updates, as well as tax tools and other resources for 2017 as they become available. For specific questions, please contact Mary Jo Heim in the TRICOM Accounting Department at 262-509-6214 or your TRICOM Accounting Representative.

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