- 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 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):
- Iowa
- Maine
- California
- New Jersey
- South Carolina
Federal Tax Changes:
- Social Security Wage Limit has increased from $137,700 to $142,800. This is an increase for both the employee and the employer of $316.20. The additional .9% Medicare tax on employee wages over $200,000 is still in place for 2021.
- 401K Limit for 2021 remains unchanged at $19,500; the limit on the contribution for individuals aged 50 and over remains unchanged at $6,500.
- SIMPLE Retirement Plan is at $13,500, no change from 2020.
Standard Deduction Changes:
- Single & Married Filing Separately: $12,550
- Married Filing Jointly: $25,100
- Head of Household: $18,800
Additional State & Federal Tax Topics:
- For 2021, Oregon’s workers’ compensation premium assessment rate will increase to 9.0% from 8.4%. In addition, Oregon Worker’s Benefit Fund will remain the same at 2.2 cents per hour. One-half of this amount is paid by the employer.
- The FLSA rate for exempt employees who earn salaries changes to $780 (40,560) per year starting October 3, 2021. This is an increase from the current $684 (35,568).
- California 2021 SDI rate is 1.2% on the first $128,298 of wages.
- New York employee paid family leave (PFL) contribution will be .511% (currently .270%) of wages up to the annual maximum of $72,860.84 in wages.
- Cincinnati City payroll tax rate has been reduced in 2021 from 2.1% to 1.8%.
- Effective January 1, 2021, employee temporary disability insurance (TDI) and Family Leave Insurance (FLI) rates in New Jersey have increased. The employee TDI rate has increased from .26% to .47%. The FLI rate has increased from .16% to .28%. The taxable wage base for these taxes has increased from $134,900 to $138,200.
- Earlier in the year it was announced that Non-employees (Independent Contractors) compensation that was reported on 1099-MISC in prior years will be reported on a new 1099-NEC. TRICOM will report all Non-employee income using this new form except for the appropriate exceptions (per instructions); those will be reported appropriately on the 1099-MISC.
- Per the Guidance on Reporting Qualified Sick Leave Wages and Qualified Family Leave Wages paid pursuant to the Families First Coronavirus Response Act (FFCRA), TRICOM will report any paid wages in Box 14 of the employee’s W-2. They will be labeled “PFL” or “PSL” depending on which reason the employee was paid.
- 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 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.
