December 1, 2011

Dear Valued Clients:

                2011 is almost over and we’re getting ready for year-end reports and setting up for next year. If we prepare your W-2’s or 1099’s, we have enclosed a list of the payees we have on file. PLEASE REVIEW IT TODAY. Make any changes or additions and FAX BACK the list AS SOON AS POSSIBLE so that we can update our records. And please remember that if you change your bank accounts and we make payment for you on line you MUST send us a VOIDED check immediately so we can change your records.

1.        HEALTH CARE CHANGES

• Congress has change the reporting of Health Care cost reporting. Reporting is voluntary for ALL employers for 2011 and 2012.
• You may qualify for a tax credit if you pay health insurance for your employees. Applies if less than 25 employees and less than $50,000 average salary. Does not apply to owners and their families. For more information click here.

2.       PAYROLL TAXES

• Social Security wage base is increased to $110,100.
• Congress has not decided what they are going to do about the social security rate for employees and employers. We will let you know if it changes.
• FUTA has decreased to .006 with wage cap at $7,000.
• Local Tax Act 32 is mandatory for 2012. The rate withheld from the employee is the higher of where the employee lives or works. The forms, rates, and additional employer information is available for review and validation at PA DCED website newpa.com/get-local-gove-support/tax-information/dceds-act-32-eit-collection-system.
• PA Unemployment rate for employee withholding will remain the same (.0008).
• PA Unemployment rate notices for employers will not be mailed out until March 2012. If you are disputing your rate let us know immediately so we can file an appeal
• Minimum Wage stays the same at $7.25. ($2.83 for “ tipped” employees)
• New employees still need W-4’s, I-9’s and PA New Hire Reports.
• QuickBooks payroll tax service (2009 version) will be obsolete in May 2012. You must upgrade your program by then.

Thank you in advance for getting your information in early.  Have a wonderful Holiday.   

Very truly yours,
Karen A. Girafalco