Important Year End Updates as 2018 Comes to a Close

Important Year End Updates as 2018 Comes to a Close

It’s hard to believe that 2018 is quickly coming to a close. That means new tax and minimum wage changes are on the horizon. In preparation for the new year, we’ve compiled a list of important changes that will help you prepare your staffing company for 2019.

Earned Income Tax Credit Notice Information:
For 2018, you are encouraged to notify the following employees that they may be able to claim EIC on their 2018 tax returns:

  • Employees with one qualifying child and wages less than $40,402. 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 Tax 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:
2019  Wage Changes
 

State

2019

2018

Change

Alaska

9.89

9.84

0.05

Arizona

11.00

10.50

0.50

Arkansas 9.25 8.50 0.75

California -1

12.00

11.00

1.00

Colorado

11.10

10.20

0.90

Delaware 8.75 8.25 0.50

Florida

8.46

8.25

0.21

Massachusetts

12.00

11.00

1.00

Maine

11.00

10.00

1.00

Minnesota-3

9.86

9.65

0.21

Missouri

8.60

7.85

0.75

Montana

8.50

8.30

0.20

New Jersey

8.85

8.60

0.25

New York-2

11.10

11.10

0.00

Ohio

8.55

8.30

0.25

Rhode Island

10.50

10.10

0.40

South Dakota 9.10 8.85 0.25

Vermont

10.78

10.50

0.28

Washington

12.00

11.50

0.50

1-Listed rate for employers with 26 or more employees. Employers with 25 or less employees is $10.50
2-Listed rate for most NY employers; Minimum wage for New York City is $15.00 for large employers (11 or more employees) and $13.50 for small employers
3-Rate listed for large employers (annual sales of $500,00 or more) small employers have minimum wage of $8.04
 

STATE

 

STATE

 

WAGE

WAGE

BASE

BASE

Alabama

$8,000

Nebraska

9,000

Alaska

 

Nevada

31,200

Arizona

7,000

New Hampshire

14,000

Arkansas

10,000

New Jersey

34,400

California

7,000

New Mexico

24,800

Colorado

13,100

New York

11,400

Connecticut

15,000

North Carolina

24,300

Delaware

16,500

North Dakota

40,600

District of Columbia

9,000

Ohio

9,500

Florida

7,000

Oklahoma

18,100

Georgia

9,500

Oregon

 

Hawaii

 

Pennsylvania

10,000

Idaho

 

Puerto Rico

7,000

Illinois

12,960

Rhode Island (Tier 1)

 

Indiana

9,500

Rhode Island (Tier 2)

 

Iowa

30,600

South Carolina

14,000

Kansas

14,000

South Dakota

15,000

Kentucky

10,500

Tennessee

7,000

Louisiana

7,700

Texas

9,000

Maine

12,000

Utah

 

Maryland

8,500

Vermont

15,600

Massachusetts

15,000

Virgin Islands

 

Michigan

 9,000

Virginia

8,000

Michigan (delinquent employers)

 9,500

Washington

49,800

Minnesota

34,000

West Virginia

12,000

Mississippi

14,000

Wisconsin

14,000

Missouri

12,500

Wyoming

25,400

Montana

33,000

 

 

  • 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 2018, only the Virgin Islands has not repaid their Federal Unemployment Tax loans. Their FUTA Credit reduction rate for 2018 will be 3.0%.

State Tax Table Changes:
The following states have changed their tax tables for 2019 (please keep in mind other states may be added to this list):

  • Missouri
  • Iowa
  • Idaho

Federal Tax Changes:

  • Social Security Wage Limit has increased from $128,400 to $132,900.  This is an increase for both the employee and the employer of $279.00. The additional .9% Medicare tax on employee wages over $200,000 is still in place for 2019.
  • 401K Limit for 2019 is at $19,000, which is a $500 increase from 2018; the limit on the contribution for individuals aged 50 and over remains unchanged at $6,000.
  • SIMPLE Retirement Plan is at $13,000, a $500 change from 2018.

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

  • Single & Married Filing Separately: $12,000
  • Married Filing Jointly: $24,000
  • Head of Household: $18,000

Additional State & Federal Tax Topics:

  • For 2018, Oregon’s workers’ compensation premium assessment rate will increase to 7.8% from 7.4%. In addition, Oregon Worker’s Benefit Fund will decrease from 2.8 cents to 2.4 cents per hour. One-half of this amount is paid by the employer.
  • Changes to The New York State Paid Family Leave Program will be made for 2019. The deduction is .153% of wages (.00153) for 2019. The maximum wage base for this tax has changed from $67,907.84 to $70,569.72.
  • INew York has enacted an Optional Employer Compensation Expense Tax (ECET). If you have elected through the state to pay this ECET (you must have elected by 12/1/2018), please notify TRICOM as soon as possible to ensure the tax has been set up for your company and to ensure TRICOM pays the tax quarterly on your behalf.
  • For 2019, Washington has enacted a Paid Family Medical Leave insurance program funded through premiums paid by employers and employees. These funds will be deducted from workers’ payroll.  Employers (regardless of size) are required to collect and remit the premiums, though some employers (less than 50 employees) are not required to pay the employer portion. The total premium is .4%: .252% paid by the employee and .148% paid by the employer for wages up to the social security limit ($132,900 for 2019). An employer may elect to pay the employee’s share of the premium.
  • California 2018 SDI rate is 1.0% on the first $118,371 of wages
  • All TRICOM Full Service and Administrative-Only Clients should have received their Year End Questionnaire from the TRICOM team. Please make sure to respond promptly and return to the Accounting Representative that sent it to you.

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 2018 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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