What Does the Stimulus Bill Mean for Your Payroll?
PrimePay has been following many of the provisions that may have an impact on your payroll, taxes, retirement plans and benefit programs. There are areas of interest for both businesses and individuals. Some significantly affect payroll processing and payroll reporting. We will handle these for you.
Find Out if Your Business Qualifies for These Stimulus Plan Tax Credits
Your payroll and payroll reporting may be affected by the Economic Stimulus Plan due to…
Tax Cuts for Individuals Through Payroll Withholding Changes
There is a new payroll tax credit of $400 per worker and $800 per couple in 2009 and 2010. A gross income phase-out begins at $75,000 for individuals and $150,000 for joint filers. Many employees can expect to see about $13 extra in their weekly checks.
To accomplish this, the IRS released revised federal withholding tables on 2/23/09 (IRS Notice 1036). The withholding allowance amounts remain the same under the new tables, which were adjusted to account for the $400 credit for single filers and $800 for joint filers. The IRS instructs employers to implement the updated withholding amounts as soon as possible, but no later than April 1, 2009. PrimePay will do this for you by then.
An Expanded Earned Income Tax Credit (EIC)
This credit provides money to low income workers who have families with at least three children. EIC is handled through payroll as reported on Form 941.
IRS Notice 1036 is an early release of the new wage withholding tables, and it also includes updated Advance Earned Income Credit Payment tables. The tables will be published in Publication 15-T, New Wage Withholding and Advance Earned Income Credit Payment Tables (For Wages Paid Through December 2009), expected to be available in March.
Please note, the information on the Economic Stimulus Plan is believed to be accurate and was gathered from sources believed to be reliable, but it is not intended to be relied upon as tax or other advice to specific clients. Companies seeking more detailed advice specific to their situation are encouraged to contact their CPAs or other professional advisors.
