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Monthly Archives / October 2016

  • Oct 31 / 2016
What's New

Congratulations to our Study Group Member who Just Passed the Fall 2016 CPP Exam. Job Well Done!

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The OCCAPA congratulates Miya Vu, Study Group member in passing the Fall 2016 CPP Exam. Doing all that extra work while continuing in their full time position was extremely ambitious, and took a lot of effort and dedication on her part.

Maya, it was worth it all, knowing that your achievement will make such a positive difference in your career path. Well done!

Miya Vu, CPP
Senior Payroll Specialist
Optima Tax Relief
Comments:
 “The Orange County Chapter study group definitely helped me with my path to becoming a Certified Payroll Professional.  There is a lot of individual effort involved to pass the exam, but the study group was able to provide me with the proper tools to be successful.  I enjoyed being surrounded by other payroll professionals and other CPPs who were always so helpful and knowledgeable.  I would like to thank everyone involved from the Orange County Chapter including Lisa Ager and Gaye Hudspeth, but I would like to give a HUGE thank you to Kris Armstrong!  She was a wonderful coordinator and I enjoyed her enthusiasm and willingness to help every week.  I would also like to thank my awesome mom, Diana Johnson (CPP and Orange County Chapter Member), who was so supportive throughout the whole process and kept encouraging me to become a CPP.  I know that being a CPP will help me with my professional growth and career!  I would recommend this study group to anyone wanting to CPP Study Group enabled me to focus on my studies for the CPP exam, and it was helpful to be with other payroll professionals who have experienced situations that we were able to share and gain insight from. I appreciate all the time and effort the facilitators and coordinators put in to help the study group.”

  • Oct 04 / 2016
What's New

Likely 2016 FUTA “Credit Reductions”

Employers in California and the U.S. Virgin Islands will likely pay substantially increased Federal Unemployment Tax Act (FUTA) taxes in January 2017, due to unpaid federal loans.

Background

For-profit employers pay federal (FUTA) and state unemployment insurance (UI) taxes on wages paid. The FUTA tax rate is 6.0%, but employers receive an offsetting credit of 5.4% for payment of state UI taxes. This makes the effective FUTA tax rate 0.6 %, which applies to wages paid up to a limit of $7,000 per worker, or $42 per employee per year. However, when state UI trust funds are depleted, states draw from a designated federal loan account, and if such loans are not repaid within two years, part of the 5.4% FUTA tax credit is incrementally reduced each year – a.k.a., credit reduction. This increases the effective FUTA tax rate in affected states.

When this “credit reduction” applies, the FUTA tax rate typically increases by 0.3%, or $21 per employee. This increase is payable in January of the following calendar year with the Internal Revenue Service (IRS) FUTA tax return, Form 940. This credit is further reduced each year by 0.3% until loans are repaid.

In addition, California and the Virgin Islands are potentially subject to a special “Benefit Cost Rate” (BCR) Add-on tax because they have had outstanding FUTA debt for five or more years. This could increase their FUTA tax by more than the typical 0.3% per year. However, both California and the Virgin Islands requested a waiver from the BCR Add-on tax for 2016, and the U.S. Department of Labor (DOL) customarily grants BCR waiver requests.

Connecticut and Ohio repaid their loans in 2016 and will not be subject to a 2016 FUTA credit reduction, as long as their loans remain at zero on the crucial measurement date of November 10. However, the table below includes both states for full disclosure in the unlikely event that they have a loan balance on November 10. Connecticut did not request a waiver from the BCR Add-on tax and would be subject to the BCR (0.1%) for 2016 if it has an outstanding loan balance on November 10, 2016. Connecticut is not expected to borrow again in 2016.

DOL has identified the states that could be subject to the FUTA BCR Add-on tax and/or credit reduction for 2016. They are:

EoW 2016 FUTA Credit Reductions

Employers in these three states and the U.S. Virgin Islands will pay an increased FUTA tax rate in January 2017, if there is a loan balance on November 10. This increase will be based on FUTA taxable wages paid in the affected jurisdictions during 2016. eduction Add-on FUTA rate Employee Normal Rate Over 2013.

  • Oct 04 / 2016
What's New

Revised Form I-9 to Be Released by November 22

USCIS has announced that a revised Form I-9, Employment Eligibility Verification, has been approved by the Office of Management and Budget. USCIS must publish the form by November 22. The current version of Form I-9, which has a revision date of 3/8/13, may be used until January 21, 2017, and the new form will have to be used for employees hired after that date. Additional information is available in the “What’s New” section of USCIS’s I-9 Central.

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