As 2010 has officially ended, those of us dealing with the payroll tax changes and year end reporting are very busy. Please remember to change the Employee FICA rate from 6.2% to 4.2% before doing a 2011 payroll.
This politically motivated change seems small to politicians but has once again created lots of extra burdens for business. As one company discovered this week, older versions of Business Works only have one FICA rate. In MAS 90, the FICA rate needs to be changed to 2010 rates when running the 941 report for 2010 year end but one needs to make sure and change it back to 2011 rates before doing a 2011 payroll.
HIRE Act reporting is another year end reporting issue. Make sure all qualified employees have completed a W-11 form. It will be interesting to see how the government will ever audit this one-time exemption where employers do not have to pay the employer FICA tax for employees hired in 2010 that meet several different guidelines.
I find it interesting that with all the talk about social security being in trouble, our politicians have substantially reduced the payments into social security as a way to try and stimulate the economy. For those of you doing payroll and putting in the extra time to comply with these changes, I have felt your pain!