Each year the IRS makes changes, updates forms, and issues new instructions. Tax filing year 2017 is no different for HR management personnel.
It would take a much longer post than this to cover all of the IRS changes and updates for the tax year, which is why payroll tax filing compliance requires a large degree of due diligence for businesses. However, some changes and new items warrant special note.
Here is a brief overview of the more significant updates, changes, and notifications that will affect most employers and HR management going into 2018.
New IRS Forms and Instructions
New for 2017: Form 940 and Schedules A and R
The IRS has released the new Form 940, the Schedule A (Form 940), and the Schedule R (Form 940), along with instructions for tax 2017. Both Form 940, the Employer’s Annual Federal Unemployment (FUTA) Tax Return, and the 2017 Schedule A, Multi-State Employer and Credit Reduction Information, were released on November 22, 2017.
The Schedule A is used to report additional tax owed because of federal unemployment tax credit reductions. These credit reduction percentages for 2017 were released on November 13, 2017 by the Labor Department.
Reporting Information for FUTA Credit Reduction Areas has been Updated
The IRS released updated instructions for Form 940 on November 21, 2017. According to a story by BloombergTax.com,
"The deadline for filing the 2017 Form 940 and its schedules is Jan. 31, 2018, which also is the deadline for paying remaining amounts of federal unemployment tax owed for 2017, including amounts due because of the FUTA credit reductions in effect for California and the U.S. Virgin Islands this year. Employers in those jurisdictions are required to pay as much as $147 in additional FUTA tax per employee for 2017."
2018 Forms 1099-MISC and 1099-K for tax year 2017
The IRS has released the newest Form 1099-MISC, Miscellaneous Income, the instructions for
- Form 1099-MISC
- Form 1099-K
- Payment Card
- Third-Party Network Transactions
Revised Form W-9 and Instructions
The IRS has issued a new Form W-9, Request for Taxpayer Identification Number and Certification and its instructions for 2017.
Third-Party Sick Pay Recap Form for 2017
The IRS has released the 2017 Form 8922, the Third-Party Sick Pay Recap form.
New IRS Guidance and FAQs
In addition to the normally updated forms and instructions, the IRS has also provided some key guidance and information updates worth noting.
Employer Shared Responsibility Payments FAQs Updated
The IRS updated its web page Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act on November 21, 2017 to include some new frequently asked questions (FAQs).
The newly released frequently asked questions and answers focus on making employer shared responsibility payments. They include the procedures the IRS will use to propose and assess the employer shared responsibility payment.
According to a post from the IFEBP website, questions numbers 55 through 58 address the following:
Letter 226J- issued to an applicable large employer (ALE) if the IRS determines that for at least one month in the year, one or more of the ALE’s full-time employees was enrolled in a qualified health plan for which a premium tax credit was allowed (and the ALE did not qualify for an affordability safe harbor or other relief for the employee);
Opportunities to respond to the IRS about the proposed payment;
How an employer makes a shared responsibility payment; and
The time frame for notifying employers of potential employer shared responsibility payments.
IRS Guidance on Small Employer HRAs
Notice 2017-67 was released by the IRS and provides guidance on requirements for providing a qualified small employer health reimbursement arrangement (QSEHRA). The Notice also includes the tax consequences and requirements for providing written notice to eligible employees.
An article from Wex Health noted that,
“In the form of 79 questions and answers, the IRS explains the rules and requirements for providing a QSEHRA under section 9831(d) of its code, the tax consequences of the arrangement and the requirements for providing written notice of the arrangement to employees. A qualified small employer HRA may be offered by employers that have fewer than 50 full-time employees and do not offer group health plans to any of their employees.”
Additional Items of Note for Tax Filing
IRS Continuing Additional Disaster Relief
The IRS will continue to offer relief for victims of federally declared disasters this tax year. This relief includes extending filing deadlines, waiving late deposit penalties, and also allowing charitable donations to be made through leave-based donation programs.
You can learn more on this here: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations
Employers are Reminded by the SSA to Check Accounts Before Filing
The Social Security Administration (SSA) advises employers carefully review accounts now before electronically filing Forms W-2 and W-2c.
According to a recent SSA press release,
“In October of each year, the Social Security Administration announces adjustments that take effect the following January that are based on the increase in average wages. Based on the wage data Social Security had at the time of the October 13, 2017, announcement, the maximum amount of earnings subject to the Social Security tax (taxable maximum) was to increase to $128,700 in 2018, from $127,200 in 2017. The new amount for 2018, based on updated wage data reported to Social Security, is $128,400.”
Getting Professional Help with HR Compliance
An updated and streamlined reporting strategy will help your organization meet its obligations, while providing accuracy and timeliness. So take time to understand the new laws and prioritize accurate record keeping. In this way, you will make compliance a sure thing.
Another key step in maintaining HR compliance and increasing your company's cost-effectiveness is to consider outsourcing. A professional agency such as Accuchex can provide much-needed help with Human Resources needs and questions.
Accuchex is a full spectrum Payroll Management Services provider offering expertise in Time Management, Insurance and Retirement issues, as well.