2017 Payroll Update
As a service to you, we are pleased to provide this list of updates and reminders regarding payroll. The information below includes federal updates; however, some state-specific information has been included. If your state information is not provided, please contact your Wipfli relationship executive with any specific questions.
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Social Security and Medicare Wage Bases and Rates
The wage base subject to social security will increase to $127,200 for 2017. There is no limit for the wages subject to Medicare tax. The employer and employee FICA tax rate will remain at 7.65% (social security rate at 6.2% and Medicare rate at 1.45%).
Wages paid in excess of $200,000 per employee in 2017 will be subject to an additional 0.9% Medicare tax that will be withheld only from the employees’ wages. Employers will not have to match the additional tax. If the employer does not withhold the additional tax from the employees affected and deposit it, the employer will be subject to penalties for failure to withhold the tax. Earnings Allowed When Receiving Social Security Benefits Social security recipients who are under full retirement age can earn up to $16,920 in 2017 (increased from 2016). One dollar in benefits will be withheld for every two dollars in earnings above $16,920. Retirees who attain full retirement age in 2017 will lose one dollar in benefits for every three dollars earned above $44,880 (increased from 2016), but only on earnings earned before the month in which they reach full retirement age.
There is no limit on earnings beginning the month an individual reaches full retirement age. To find an individual’s full retirement age, go to www.socialsecurity.gov/pubs/ageincrease.htm.
Retirement Plan Limits
The maximum annual elective deferral an employee may make to a Section 401(k) or 403(b) plan for 2017 remains unchanged at $18,000. The SIMPLE elective contribution limit remains unchanged at $12,500 for 2017. The IRA annual contribution limit remains unchanged at $5,500.
Catch-Up Contributions
Individuals who have attained age 50 before the close of the plan year and would otherwise be precluded from making any additional elective contributions will be permitted to make additional contributions for 2017 as follows: The 401(k) and 403(b) catch-up remains unchanged at $6,000. The SIMPLE catch-up remains unchanged at $3,000. The IRA catch-up remains unchanged at $1,000.
Health Savings Account Limits
The annual contribution limits for health savings accounts (HSA) are as follows for 2017: The maximum annual contribution for self-only coverage is increasing to $3,400. The family coverage maximum annual contribution remains at $6,750. The catch-up contribution for an individual age 55 or older remains at $1,000. You cannot contribute to an HSA if you are enrolled in Medicare.
Mileage Reimbursement
Mileage rates for 2017 have been reduced to 53.5 cents per mile. The standard business mileage rate for 2016 is 54.0 cents per mile.
Unemployment Wage Base and Rate
The federal unemployment taxable wage base for 2017 remains at $7,000, and the tax rate remains at the current net rate of 0.6% for most employers.
California and the Virgin Islands are the only states affected by the FUTA Credit Reduction Act for 2016. These states will be required to pay a higher FUTA rate.
The minimum threshold for quarterly FUTA tax deposits remains at $500.
Form W-2 Due DatesHave Changed
Each employee who was paid wages in 2016 should receive a Form W-2 that is postmarked by January 31, 2017. Employers filing paper W-2s must submit them to the Social Security Administration (SSA) by January 31, 2017. If you e-file the forms, the due date is January 31.
All employers that file 250 or more Forms W-2 for the tax year 2016 are mandated to file these forms electronically with the SSA by January 31, 2017. Filers are now allowed only one 30-day extension to file Form W-2. The extension is not automatic. A Form 8809, Application for Extension of Time to File Information Returns, must be completed and filed by January 31, 2017, if an extension is needed.
Third-Party Sick Pay Recap Reporting
Either the employer or the insurance company or agent will be required to file Form 8922, Third-Party Sick Pay Recap, if the employer is not issuing the sick pay W-2. The Internal Revenue Service (IRS) uses this form to reconcile Forms 941 with Forms W-2 for the year. The recap form should be filed with the IRS and is due February 28, 2017.
W-2 Verification Code Pilot Program
The IRS is expanding its initiative to verify W-2 authenticity. The program’s purpose is to test data on the W-2 using a validated verification code. A 16-digit code and a new verification code field will appear on a limited number of Form W-2 copies given to employees (copies B and C) by certain payroll service providers who have partnered with the IRS. Approximately 50 million Forms W-2 will have verification codes on them in 2017, increased from 2 million in 2016.
FLSA Overtime Rule Delayed
On Tuesday, November 22, 2016, a U.S. District Court judge issued an injunction delaying the new overtime rule from going into effect on December 1, 2016. This came in response to an emergency motion filed by 21 states and many business groups citing that the rule was unlawful and that the Department of Labor exceeded its authority under the FLSA. Therefore, the current rate remains in effect until the court determines the Department of Labor’s authority to make the final rule, as well as the rule’s validity. If you have any questions regarding this, please contact your Wipfli relationship executive.
Current Version of Form I-9 May Be Used Through
January 21, 2017 A new version of the Form I-9 has been approved by the Office of Management and Budget. The new version must be used beginning January 22, 2017. Employers may continue using the Form I-9 with a March 31, 2016, expiration date until January 21, 2017.
Affordable Care Act (ACA) Reporting
Applicable large employers (companies employing 50 or more full-time employees, including full-time equivalents during the previous calendar year) are required to file a transmittal Form 1094-C and information return Form 1095-C to report the required information about offers of health coverage, and if they sponsor a self-insured plan, they must also report those individuals enrolled in their health plan.
Employers that sponsor self-funded insured group health plans and employ fewer than 50 employees are not subject to the employer shared responsibility provisions. These employers will use Forms 1094-B and 1095-B to report information about their covered individuals.
Form 1095-C for 2016 must be provided to the employee by March 2, 2017. Forms 1094-C and 1095-C should be filed with the IRS by February 28, 2017, if submitting on paper, or March 31, 2017, if filing electronically. Filers of 250 or more Forms 1095-C must file electronically.
If you need assistance with ACA reporting, please contact your Wipfli relationship executive.
Employer Reimbursement of Individual Health Insurance Premiums
Because of the ACA market reform requirements, employers may no longer pay for or reimburse employees for individual health insurance policies when more than one employee is participating in the plan. If an employer reimburses individual policy premiums, it is subject to the $100 per day market reform penalty per employee.
Employers can, however, provide a tax-free fringe benefit by purchasing an ACA-approved, employer-sponsored group health plan. This type of plan can be provided through the SHOP Marketplace for small employers with 50 or fewer employees. A cafeteria plan can be set up for pretax funding of the employee portion of the premium.
Another acceptable alternative would be to increase the employee’s taxable wages so the employee can choose to pay for an individual insurance policy. It would not be acceptable to provide a higher pay increase for those with family coverage vs. single coverage or those without health insurance coverage, nor could the employer require the funds to be used for health insurance.
If you are an S corporation and pay for or reimburse a greater-than-2% shareholder for an individual health policy, please contact your Wipfli relationship executive.
Employer-Provided Health Care Coverage Reporting
Form W-2 reporting of the aggregate cost (employee and employer portions) of health care coverage under an employer-sponsored group (or self-insured) health plan is required for employers that filed 250 or more W-2s for 2015. The aggregate cost of the health care coverage is reported in Box 12 of the Form W-2, labeled with code “DD.” This amount is for informational purposes only and is not included in the employee’s taxable income. There is no reporting requirement on the Form W-3 of the total of these amounts. Reporting of the cost of coverage is optional in 2016 for employers that were required to file fewer than 250 Forms W-2 in 2015.
Health Flexible Spending Account (FSA) Contribution Limit
The dollar limitation for contributions to a health FSA is increasing to $2,600 for 2017.
FSA Options – With the use-or-lose provision, participating employees must incur all eligible expenses by the end of the plan year or forfeit any unspent amounts. Under a special rule, employers may offer participating employees more time to incur eligible expenses through either the carryover option or the grace period option. An employee can carry over up to $500 of unused funds to the next plan year under the carryover option if the cafeteria plan allows for this option. Alternatively, an employee has until two and a half months after the end of the plan year to incur eligible expenses if the plan allows the grace period option. Employers can offer either option, but not both, or they can offer neither. If you have questions or would like Wipfli to assist you in amending your plan, please contact your Wipfli relationship executive.
Income Tax Withholding Tables
New federal tax withholding tables will be issued for 2017. Federal supplemental wage rates are scheduled to remain the same as in 2016. The mandatory flat rate on supplemental wage payments exceeding $1,000,000 to one employee during the calendar year is 39.6%. The optional flat rate on supplemental wages paid in 2017 is 25%.
Minimum Wage Rates Federal
The basic minimum wage remains at $7.25 per hour for 2017 for covered employers. These employers include:
- Businesses producing or handling goods for interstate commerce.
- Businesses with $500,000 in annual dollar volume of business.
- Certain other businesses including federal, state, and local government agencies, hospitals and nursing homes, and private and public schools.
The minimum wage for federal contract workers for new contracts and replacements for expiring contracts will be increasing to $10.20 per hour effective January 1, 2017.
When an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.
Form W-4 – Employee’s Withholding Allowance Certificate
A new Form W-4 for 2017 must be completed by an employee on or before February 16, 2017, if he or she had requested total exemption from withholding in 2016 and wishes to claim total exemption again in 2017. A claim of exemption from withholding lasts for only one calendar year. If an employee does not submit a new W-4, the employer must begin to withhold as if the employee were single with zero withholding allowances.
A new Form W-4 also should be completed if the employee requests changes in filing status and/or number of allowances throughout the year.
The IRS may request the employer to submit specified W-4s for review or make them available for inspection by an IRS employee.
Domestic Employers
You are not required to withhold federal income tax from wages you pay a household employee. However, if cash wages of $2,000 or more are paid during 2017 to any household (domestic) employee, the wages are subject to FICA taxes. This amount remains unchanged from 2016. If total cash wages (of all household employees) of $1,000 or more are paid in any calendar quarter, the wages are subject to FUTA taxes.
Fringe Benefits
Some examples of fringe benefits that need to be added to the Form W-2 are personal use of company auto, the cost of group term life insurance over $50,000, fringe benefits paid to shareholders of S corporations, and the value of health care for an adult child.
Amounts for personal use of company auto are taxable for FICA, federal/state withholding, and federal/state unemployment. The cost of group term life insurance over $50,000 is taxable only for FICA and federal/state withholding and is included in Box 12, identified as code “C” on Form W-2. However, greater-than-2% shareholders of an S corporation do not receive the $50,000 exclusion. They are taxed on the full amount of the policy.
An employer can choose not to withhold income tax on the value of the personal use of a company vehicle and group term life insurance, but the employer must notify the employee if this choice is made. The value of health benefits (including HSA-employer contributions and long-term care insurance) provided to a greater-than-2% shareholder of an S corporation must be included in the employee’s wages subject to federal and Wisconsin income tax withholding (Boxes 1 and 16 on Form W-2). However, the value of these benefits is excluded from wages subject to social security, Medicare, FUTA, and SUTA taxes, provided these premiums are part of an employer-sponsored plan that covers all employees. Please note that individual states may vary in taxation of these benefits.
Employers are not required to include in gross income the fair market value of health, vision, or dental insurance coverage for adult children for federal or state tax purposes in 2016 as long as the adult child has not turned 27 by the end of the calendar year.
There are additional fringe benefits that are typically excluded from taxable income unless limits are exceeded. Some examples are:
- Achievement awards
- Dependent care assistance
- Educational assistance
- Employee discounts
Additional information can be found on these and other fringe benefits at www.irs.gov in Publication 15-B. If you have disability policies, it may be possible, with proper planning, to exclude from taxable income the disability benefits you receive. Please contact your Wipfli relationship executive for details.
S-Corporation Shareholders, Partners, and LLC Members
Special fringe benefit rules apply to S corporations and shareholders who owned more than 2% of the corporation’s outstanding stock on any day during the tax year, considering both direct and constructive ownership. Current IRS regulations require that amounts paid by an S corporation for accident and health insurance covering a greater-than-2% shareholder/employee (including dependent coverage) must be reported as gross wages on his or her Form W-2, Wage and Tax Statement. We recommend that these amounts be included no later than the last payroll of 2016 and that they also be separately identified in box 14 of the shareholder’s/employee’s Form W-2. The same rules apply to partners and LLC members, except that the amounts are to be reported as “guaranteed payments” rather than W-2 wages.
Note: Partners, LLC members, and greater-than-2% shareholders are not eligible to participate in your Section 125 plan.
Please note the following information as it relates to the deductibility of health insurance premiums:
If employer is an S corporation, C corporation, or LLC electing to be taxed as an S corporation or C corporation and has only one employee/member or employee/shareholder, it is acceptable for the entity to reimburse or pay directly for any health insurance-related payments including those for regular health premiums, long-term care premiums (subject to IRS prescribed limits), Medicare premiums deducted from social security, and supplemental health premiums. The total of all of these should be included in gross wages on the W-2 of the employee/member or employee/shareholder. Solely for this purpose, an S-corporation shareholder’s spouse and dependent children are not treated as additional employees, and no group plan is required.
If the employer has more than one employee and a group plan, the entity is allowed to reimburse employees for Medicare premiums as well as supplemental health premiums. If there is not a group plan, the entity is allowed to reimburse for certain excepted benefits such as dental and vision coverage but may not reimburse health insurance premiums.
If there is more than one employee, reimbursement for direct payment of premiums that are not part of a group plan is impermissible.
The reimbursement arrangements for S corporations with only greater-than-2% shareholders/employees and no non-owner employees will be permitted through the end of 2016.
Payroll Updates by State
California
Unemployment Wage Base, Rate, and Wage Reporting
The state unemployment insurance (SUI) taxable wage base will remain at $7,000 for calendar year 2017. The new employer rate remains at 3.4%. Rates range from 1.5% to 6.2%. Employers may not make voluntary contributions to lower their 2017 unemployment tax rate. Tax rate notices will be mailed to employers in December.
The Employment Training Tax (ETT) rate for 2017 remains at 0.1%. The ETT taxable wage limit remains at $7,000 per employee per calendar year.
The State Disability Insurance (SDI) withholding rate for 2017 will remain at 0.9%. The wage limit is $110,902 per employee per calendar year.
Employers with 10 or more employees will be required to electronically file and pay beginning January 1, 2017.
Form W-2 Information
No filing of Forms W-2 is required.
Minimum Wage Rate
Effective January 1, 2017, the minimum wage rate will increase to $10.50 per hour for workers at businesses with 26 or more employees and $10.00 per hour for workers at small businesses (25 or fewer employees).
State New Hire Reporting
Employers must report new hires and rehires within 20 days of their hire date using Form W-4 or equivalent by mail to Employment Development Dept., P.O. Box 997016, MIC96, Sacramento, CA 95799-7016; by fax at 916.657.0529; or online at www.edd.ca.gov/payroll_taxes/new_hire_reporting.htm.
Delaware
Unemployment Wage Base and Rate
The state unemployment insurance (SUI) taxable wage base will remain at $18,500 for calendar year 2017. The new employer rate has not been released yet for 2017.
Form W-2 Information
Forms W-2 must be filed with the State of Delaware by January 31, 2017, if filing on paper or electronically. You must file Form W-2 electronically if you have 250 or more forms. A Form W-3A, Annual Reconciliation of Delaware Income Tax Withheld, should be included with paper copies of employee W-2 forms.
Income Tax Withholding Tables
There are no changes to the withholding tables for 2017.
Minimum Wage Rate
The minimum wage rate will remain at $8.25 per hour in 2017.
State New Hire Reporting
Employers must report new hires and rehires within 20 days of their hire date using Form W-4 or equivalent by mail to Delaware State Directory of New Hires, P.O. Box 90370, Atlanta, GA 30364; by fax at 855.481.0047; or online at http://newhire.dhss.delaware.gov/de-Newhire/WhenAndHow.aspx.
Idaho
Unemployment Wage Base and Rate
The state unemployment insurance (SUI) taxable wage base will increase to $37,800 in 2017. Tax rate notices will be mailed to employers in mid-December. The new employer rate for non-construction employers will be 1.395%. The SUI tax rates will range from .39% to 5.4%.
Form W-2 Information
Forms W-2 must be filed no later than January 31, 2017, if filing on paper or electronically. You must file Form W-2 electronically if you have 250 or more forms. Form 967, Idaho Annual Withholding Report, should be accompanied with paper copies of employee W-2 forms.
Minimum Wage Rate
The current state minimum wage is $7.25 per hour. The minimum wage for a tipped employee is $3.35 per hour. The minimum wage for new hires under the age of 20 years old is $4.25 per hour but only for their first 90 consecutive calendar days of employment.
State New Hire Reporting
Employers must report new hires and rehires within 20 days of their hire date using Form W-4 or equivalent by mail to Idaho Department of Labor, New Hire Reporting, 317 W. Main St., Boise, ID 83735-0610; by fax at 208.332.7411; or online at http://labor.idaho.gov/newhire.
Illinois
Unemployment Wage Base and Rate
The unemployment taxable wage base will remain at $12,960 in 2017.
Employers with 25 or more employees are required to report unemployment insurance taxable wages electronically on a monthly basis. These medium and large employers will continue to submit quarterly contribution and wage reports but also will be required to submit eight additional monthly wage reports. The employees’ names, social security numbers, and total wages for the reporting period will be required on the monthly report. No monthly wage report will be required for the months of March, June, September, and December, since these figures will be included on the quarterly reports filed. Monthly wage reporting must be filed electronically via TaxNet, the Department’s online tax filing and wage reporting application.
Form W-2 Information
All payroll service providers and employers with 250 or more employees are mandated to file Forms W-2 electronically with the Department of Revenue. These W-2s must be submitted by February 15, 2017, using the SSA EFW2 format. Employers with fewer than 250 employees are not required to submit Forms W-2 to Illinois unless requested.
Minimum Wage Rates
The adult minimum wage rate remains at $8.25 per hour. Employers may pay $7.75 to anyone under the age of 18.
State New Hire Reporting
Employers can report new hires online at www.ides.illinois.gov/pages/employer_obligations_reporting_new_hires.aspx. Click on the box “Click Here to Report New Hires.” You can also report new hires by completing the New Hire Reporting form and mailing it to Illinois New Hire Directory, P.O. Box 19473, Springfield, IL 62794-9473 or faxing it to 217.557.1947.
Michigan
Unemployment Wage Base and Rate
In the third quarter of 2015, the unemployment taxable wage base was reduced to $9,000 for “non-delinquent” contributing employers. The decrease will remain in effect as long as the state unemployment insurance (UI) trust fund remains at or above $2.5 billion. If the UI trust fund falls or is projected to fall below this amount or you are a “non-delinquent” contributing employer, the taxable wage base will be $9,500.
All employers are mandated to file Form 1028, Employer’s Quarterly Wage/Tax Report, online. This form is used to report quarterly wage information. Visit www.michigan.gov/uia to view the MiWam website.
Form W-2 Information
Employers with 250 or more employees are mandated to file Form W-2 information on magnetic media using the EFW2 format by February 28, 2017. Forms W-2 filed on paper with the Department are also due February 28, 2017. For more information, please contact the Magnetic Media Unit at 517.636.6925.
Minimum Wage Rate
The minimum wage rate is increasing to $8.90 per hour on January 1, 2017.
State New Hire Reporting
Employers must report new hires, rehires, and employees returning to work within 20 days of their hire date online at https://mi-newhire.com, by fax at 1.877.318.1659, or by mail to MI New Hires Operation Center, P.O. Box 85010, Lansing, MI 48908-5010.
Minnesota
Unemployment Wage Base and Rate
The unemployment taxable wage base will increase to $32,000 in 2017.
All unemployment quarterly tax and wage reporting is required to be done electronically. Electronic payments are available for all employers and are required for employers reporting 50 or more employees in any calendar quarter and for all third-party processors. The Minnesota Unemployment Insurance website can be found at www.uimn.org.
Form W-2 Information
For tax year 2016, you must submit Forms W-2 and 1099 electronically if you have more than 10 forms. W-2s must be filed by February 28, 2017. For more information on electronic filing, go to www.taxes.state.mn.us.
Income Tax Withholding Tables
There will be new withholding tables effective January 1, 2017.
Minimum Wage Rates
For larger employers (receipts of $500,000 or more), the minimum wage increased to $9.50 on August 1, 2016.
For smaller employers (receipts less than $500,000), the minimum wage increased to $7.75 on August 1, 2016.
The training minimum wage rate that can be paid to employees who are 18 and 19 years old during their first 90 consecutive days of employment increased to $7.75 as of August 1, 2016.
A large employer may pay an employee under 18 years of age a rate of $7.75 as of August 1, 2016.
State New Hire Reporting
Employers must report new employees, rehires, and employees returning to work within 20 days of their hire date online at www.mn-newhire.com, by fax at 1.800.692.4473, or by mail to Minnesota New Hire Reporting Center, P.O. Box 64212, St. Paul, MN 55164-0212.
Montana
Unemployment Wage Base and Rate
The unemployment taxable wage base will increase to $31,400 in 2017.
Employers may report their quarterly wages and pay their state unemployment tax online or on paper. To access the Montana Unemployment Insurance Division’s UI eServices for Employers, an ePass Montana account needs to be set up. You can do this at https://app.mt.gov/epass/Authn/selectIDP.html.
Form W-2 Information
Forms W-2 can be filed electronically using the File Transfer Service (FTS) through ePass. Form MW-3, Montana Annual W-2 1099 Withholding Tax Reconciliation, can be filed using Taxpayer Access Point (TAP). TAP can be found at https://tap.dor.mt.gov/. There is no limit requirement for electronically filing these forms for 2016. The forms are due by February 28, 2017. Forms are due to employees by January 31, 2017.
Minimum Wage Rates
The minimum wage rate will be $8.15 per hour effective January 1, 2017.
State New Hire Reporting
Employers must report new hires and rehires online through their ePass account, by phone at 1.888.866.0327, by fax at 1.888.272.1990, or by mail to Montana New Hire Reporting Program, P.O. Box 8013, Helena, MT 59604-8013. Reports must be submitted within 20 days of the date the employee is hired or rehired. More information on new hire reporting can be found at http://dphhs.mt.gov/CSED/employerinfo.aspx.
New Jersey
Unemployment Wage Base and Rate
The employer unemployment taxable wage base will increase to $33,500 for 2017.
Unemployment/disability rates in New Jersey are assigned on a fiscal year basis (i.e., July 1 through June 30). All new employers (except successors) are assigned new employer rates for the first three calendar years, after which a calculated rate is assigned based on employment experience.
New Employer
|
U.I.
|
D.I.
|
W.F./S.W.F.
|
|
|
|
0.026825
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0.005000
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0.001175
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0.000000
|
July 1, 2016, through June 30, 2017
|
Worker
|
U.I. |
D.I. |
W.F./S.W.F. |
F.L.I |
|
|
0.003825 |
0.002400 |
0.000425 |
0.001000 |
January 1, 2017, through December 31, 2017 |
Form W-2 Information
Forms W-2 can be filed either electronically or on paper. Whether submitting on paper or filing electronically, the forms are due to the state by February 28, 2017. Employers are not mandated to file W-2 forms electronically but are encouraged to do so. New Jersey’s record specifications for reporting W-2 information via e-file (SFTP) conform to specifications defined by the Social Security Administration. The specifications can also be obtained by calling 609.292.9292. Employee copies are due by February 15, 2017.
Minimum Wage Rate
The minimum wage rate will remain at $8.44 an hour effective January 1, 2017.
State New Hire Reporting
Employers must report new hires and rehires online at https://nj-newhire.com, by fax at 1.800.304.4901, or by mail to New Jersey New Hire Directory, P.O. Box 4654, Trenton, NJ 08650-4654. Reports must be submitted within 20 days of the date the employee is hired or rehired.
Pennsylvania
Unemployment Wage Base and Rate
The taxable wage base for employer contributions will be increasing from $9,750 in 2017.
Contribution rate notices for 2017 are planned to be mailed to employers on December 31, 2016. Employers can view their rate notice information via the UCMS employer portal once it is posted.
The employee unemployment tax withholding rate will remain unchanged at 0.07% (.0007) for all taxable wages for 2017. There is no wage limit as there is for employer contributions.
All employers are required to electronically file quarterly unemployment tax and wage reports through UCMS.
Form W-2 Information
Forms W-2 must be filed with the State of Pennsylvania by January 31, 2017. A transmittal form, REV 1667, must also be completed and submitted with each W-2 form. Employers that file 250 or more Forms W-2 are required to file electronically.
Minimum Wage Rate
The minimum wage rate will remain at $7.25 an hour in 2017.
State New Hire Reporting
Employers must report new hires and rehires within 20 days of their hire date using Form W-4 or the Pennsylvania New Hire Reporting Form. You can mail the form to Commonwealth of PA, New Hire Reporting Program, P.O. Box 69400, Harrisburg, PA 17106-9400; fax it to 1.866.748.4473; or report it online at https://www.cwds.pa.gov/cwdsonline/NewHire/NewHireProgramInformation/NewHireInformation.aspx.
Virginia
Unemployment Wage Base and Rate
The state unemployment insurance (SUI) taxable wage base will remain at $8,000 for calendar year 2017.
Form W-2 Information
Forms W-2 must be filed by January 31, 2017, if filing on paper. You must file Form W-2 electronically if you have 250 or more forms for 2015. The due date for electronic submission is January 31, 2017.
Minimum Wage Rate
The minimum wage rate for 2017 will be $7.25 per hour.
State law excludes from coverage any employment that is subject to the federal Fair Labor Standards Act. See https://www.dol.gov/whd/minwage/america.htm#Virginia.
State New Hire Reporting
Employers must report new hires and rehires within 20 days of their hire date online at https://va-newhire.com, by fax at 1.800.688.2680, or by mail to Virginia New Hire Reporting Center, P.O. Box 3757, Dublin, OH 43016.
Wisconsin
Unemployment Wage Base and Rate
The unemployment taxable wage base will remain at $14,000 in 2017.
The new employer rate for non-construction employers with payroll under $500,000 is decreasing to 3.05%; for payrolls of $500,000 or more, the rate is decreasing to 3.25%. The new employer rate for construction employers is decreasing to 4.4% in 2017 for payrolls of under $500,000 and 4.55% for payrolls greater than $500,000.
Employers with 25 or more employees are required to file their tax report via the Web-based reporting application at www.dwd.wisconsin.gov/uitax and their wage report using the same application. Continuing to file on paper will result in a $25 penalty. All quarterly tax/wage reports and payments must be received by the Department on or before the due date.
An employer with a tax liability of at least $10,000 for any 12-month period ending on June 30 must pay all unemployment payments via electronic funds transfer (EFT) beginning with the next calendar year. Once an employer is subject to EFT, the employer must continue to pay all unemployment tax payments in that manner.
Form W-2 Information
The threshold for electronic filing of Forms W-2 remains at 50 or more for 2016. Employers filing fewer than 50 Forms W-2 are not mandated to file electronically but are encouraged to do so. Wage information returns/statements with no Wisconsin withholding need to be filed with the Wisconsin Department of Revenue. There is no transmittal form needed when filing Wisconsin W-2 forms on paper. In prior years, a Form WT-2 was required. Employers that do not have a Wisconsin withholding tax number and are not required to withhold should enter “036888888888801” in box 16 of Form W-2. The W-2s should be filed with the state by January 31, 2017.
Withholding Tax/Annual Reconciliation (WT-7)
Employers whose withholding tax payments were $300 or more in the prior year are required to file and pay the tax electronically via MyTax account. The Form WT-7 must also be filed electronically. You may request an e-filing/e-payment waiver by completing Form EFT-102 if these requirements create an undue hardship.
Income Tax Withholding Tables
Tables remain unchanged for 2017.
Publication W-166, Wisconsin Withholding Tax Guide Effective for Withholding Periods Beginning On or After April 1, 2014, should be used when calculating tax for wages paid in 2017.
Minimum Wage Rates
The general minimum wage rate for adults remains at $7.25 per hour.
State New Hire Reporting
Employers can report new hires online at www.wi-newhire.com. All new hires, rehires, or employees returning to work must be reported to the Wisconsin New Hire Reporting Center within 20 days of their hire or rehire/return date. You can also fax the information to 1.800.277.8075 or mail it to Department of Workforce Development, New Hire Reporting, P.O. Box 14431, Madison, WI 53708-0431.
We hope you find this information helpful. If you have any questions, please do not hesitate to contact your Wipfli relationship executive. You may also contact any one of our payroll specialists located in the following offices:
| Billings, MT | 406-248-1681 |
| Cloquet, MN | 218-879-1503 |
| Media, PA | 610-565-3930 |
| Rockford, IL | 815-399-7700 |
| Wausau, WI | 715-845-3111 |
