2020 was a long, difficult year for many. As the year comes to a close, many are eagerly looking forward to turning the page on the calendar to 2021, and to the hope that a new year inevitably brings.
While 2020 taught us that there are some things we may not expect, there are still some changes we know and can prepare for. To help your staffing business get ready for the new year, we’ve assembled a list of important tax and minimum wage changes for 2021.
Earned Income Tax Credit Notice Information:
For 2020, you are encouraged to notify the following employees that they may be able to claim EIC on their 2020 tax returns:
There are seven states that require employers to provide some additional notification to their employees about their possible eligibility for Earned Income Tax Credit. The following states allow employers to use Federal Notice 797:
The following states require the use of a state-specified form:
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:
2021 Wage Changes
State |
2021 |
2020 |
Change |
Alaska |
10.34 |
10.19 |
0.15 |
Arizona |
12.15 |
12.00 |
0.15 |
Arkansas | 11.00 | 10.00 | 1.00 |
California -1 |
14.00 |
13.00 |
1.00 |
Colorado |
12.32 |
12.00 |
0.32 |
Florida |
8.65 |
8.56 |
0.09 |
Illinois | 11.00 | 10.00 | 1.00 |
Massachusetts |
13.50 |
12.75 |
0.75 |
Maine |
12.15 |
12.00 |
0.15 |
Maryland | 11.75 | 11.00 | 0.75 |
Michigan | 9.87 | 9.65 | 0.22 |
Minnesota-3 |
10.08 | 10.00 | 0.08 |
Missouri |
10.30 |
9.45 |
0.85 |
Montana |
8.75 |
8.65 |
0.10 |
Nevada | 9.75 | 9.00 | 0.75 |
New Jersey-4 |
12.00 |
11.00 |
1.00 |
New Mexico | 10.50 | 9.00 | 1.50 |
New York-2 |
12.50 |
11.80 |
0.70 |
Ohio-5 |
8.80 |
8.70 |
0.10 |
South Dakota | 9.45 | 9.30 | 0.15 |
Vermont |
11.75 |
10.96 |
0.79 |
Washington |
13.69 |
13.50 |
0.19 |
1- Listed for employers with 26 or more employees-employers with 25 or less is $12.00
2- Listed rate for most NY employers; Minimum wage for New York City is $15.00 for all employers
3- Rate listed for large employers (annual sales of $500,00 or more) small employers have minimum wage of $8.21
4- Rate for most employers; $11.10 for seasonal or small employers (fewer than 6 employees); $10.44 for agricultural employers
5- Rate is listed for large employers ($323,000 in gross receipts); $7.25 (Federal Rate, for small employers)
2021 Unemployment Wage Bases:
Taxable Wage Base for 2021
STATE |
|
STATE |
|
WAGE |
WAGE |
||
BASE |
BASE |
||
Alabama |
$8,000 |
Nebraska |
9,000 |
Alaska |
|
Nevada |
33,400 |
Arizona |
7,000 |
New Hampshire |
14,000 |
Arkansas |
10,000 |
New Jersey |
36,200 |
California |
7,000 |
New Mexico |
27,000 |
Colorado |
13,600 |
New York |
11,800 |
Connecticut |
15,000 |
North Carolina |
26,000 |
Delaware |
|
North Dakota |
|
District of Columbia |
9,000 |
Ohio |
9,000 |
Florida |
7,000 |
Oklahoma |
24,000 |
Georgia |
9,500 |
Oregon |
43,800 |
Hawaii |
|
Pennsylvania |
10,000 |
Idaho |
|
Puerto Rico |
|
Illinois |
12,960 |
Rhode Island (Tier 1) |
|
Indiana |
9,500 |
Rhode Island (Tier 2) |
|
Iowa |
32,400 |
South Carolina |
14,000 |
Kansas |
14,000 |
South Dakota |
15,000 |
Kentucky |
|
Tennessee |
|
Louisiana |
7,700 |
Texas |
9,000 |
Maine |
12,000 |
Utah |
38,900 |
Maryland |
8,500 |
Vermont |
14,100 |
Massachusetts |
15,000 |
Virgin Islands |
|
Michigan |
|
Virginia |
8,000 |
Michigan (delinquent employers) |
|
Washington |
56,500 |
Minnesota |
|
West Virginia |
12,000 |
Mississippi |
14,000 |
Wisconsin |
14,000 |
Missouri |
11,000 |
Wyoming |
27,300 |
Montana | 35,300 |
FUTA Reduction States:
For tax year 2020, only the Virgin Islands has not repaid their Federal Unemployment Tax loans. Their FUTA Credit reduction rate for 2020 will be 3.0%. There are currently 12 other states that have Federal Unemployment loans, but the outstanding amounts for these loans do not affect the 2020 FUTA rates for these states.
State Tax Table Changes:
The following states have changed their tax tables for 2021 (please keep in mind other states may be added to this list):
Federal Tax Changes:
Standard Deduction Changes:
Additional State & Federal Tax Topics:
For more legislative and year-end updates, please refer to TRICOM.com. We will post the latest legislative and tax updates, as well as tax tools and other resources for 2021 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.