On February 17th, the president signed the Emergency Economic Recovery Act which will increase the monthly Transitchek cap from $120 to $230 a month.
Over the weekend (Feb. 21), the IRS issued the new federal withholding tables with the guidance that "employers start using these new tables as soon as possible but not later than April 1."
This is unexpectedly quick and not a very lengthy window for business owners (1 or 2 pay cycles away for many).
We will deploy the new tax tables to our system the first week in March. Provisions under the American Recovery and Reinvestment Act of 2009 that may have a significant impact on businesses include: "Making Work Pay" - provides workers a rebate/credit for the 2009 and 2010 tax years of the lesser of $400 for individuals and $800 for couples, or 6.2 percent of earned income.
The credit will be received by workers in their net paychecks through adjusted tax withholding tables. Premium Assistance for COBRA recipients - allows COBRA beneficiaries to pay only 35 percent of their premiums, while their employers pay the remaining 65 percent.
Employers are reimbursed for their portion of the premiums through a credit on payroll taxes. New 941’s you will notice 12a and 12b have changed to include the COBRA premium assistance payments.
Plexus also is continuing to monitor the additional economic proposals under consideration: Federal Minimum Wage Increase - raising the federal minimum wage to $9.50 per hour by 2011. Retirement Account Withdrawals - allowing withdrawals from retirement accounts of 15 percent up to $10,000 without penalties. Withdrawals would remain subject to withholding taxes.
