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Payroll 2013 Tax Bulletin

The following pages include employer information about changes to tax laws for the year 2013, and reminders about Forms W-4, W-5, and I-9. We have included a separate bulletin with information for your employees. Please post the employee bulletin in an area where your employees can see it easily.

FICA Changes

Employer FICA wage limits and tax rates 2012 2013
Social Security (OASDI) wage base $110,100.00 $113,700.00
Medicare (HI) wage base No Limit No Limit
Social Security (OASDI) percentage 6.2%(4.2% for employees) 6.2%
Medicare (HI) percentage 1.45% 1.45%
Total Social Security and Medicare percentage 7.65% 7.65%
Maximum Social Security (OASDI) withholding $6,826.20($4,624.20 for employees) $7049.40
Maximum Medicare (HI) withholding No Limit No Limit
Maximum Social Security and Medicare withholding No Limit No Limit
Federal Unemployment Tax (FUTA) $7,000.00 $7,000.00

 

Changes for Retirement Plan Contribution Limits

Maximum annual elective deferrals:

Retirement Plan 2012 2013
401(k) $17,000 $17,500
Roth 401(k) $17,000 $17,500
403(b) $17,000 $17,500
SARSEP $17,000 $17,500
457 $17,000 $17,500
414(h)(2) No Limit TBD
Section 501(c)(18)(D) $7,000 $7,000
Simple IRA and 401(k) $11,500 $12,000
Traditional IRA $5,000 $5,500
Catch-up 401(k) $5,500 $5,500
Catch-up 403(b) $5,500 $5,500
Catch-up 408(k) $5,500 $5,500
Catch-up 457 $5,500 $5,500
Catch-up Simple IRA and 401(k) $2,500 $2,500
Catch-up IRA $1,000 $1,000

 

Health Savings Account (HSA) Limits

The following are the maximum annual limits for HSAs:

HSA 2012 2013
HSA Maximum Annual Contribution Self Only$3,100.00 Family$6,250.00 Self-Only$3,250.00 Family$6,450.00
HSA Catch-Up Contributions (age 55 by the end of year) $1,000.00 $1,000.00
HDHP Minimum Annual Deductible $1,200.00 $2,400.00 $1,250.00 $2,500.00
HDHP Maximum Out-of-Pocket $6,050.00 $12,100.00 $6,250.00 $12,500.00

 

Forms W-4

  • If an employee has claimed to be exempt from withholding, a new Form W-4 must be filed by February 15, 2013. Please tell your payroll specialist about any withholding changes to your system for your employees. Please make any withholding changes to your system.
  • The IRS may request copies of selected employee Forms W-4 if it is suspected that an under-withholding problem exists. Follow the instructions on the IRS letter if this occurs.

Social Security Cards

For Form W-2 verification purposes, employers are permitted to ask for and copy employee social security cards to ensure that the correct number and name are used. Penalties may be assessed if an employee’s name and social security number are not reported on Form W-2 the same as they appear on their social security card.

Out of Business Employers

The federal government requires employers who go out of business to provide Form
W-2 information to employees and file federal Forms W-2 information according to the following schedule:

Out of Business Quarter Forms 941Due to IRS Forms W-2 InformationDue to Employees Forms W-2/W-3Due to SSA
1 April 30, 2013 April 30, 2013 May 31, 2013
2 July 31, 2013 July 31, 2013 September 3, 2013
3 October 31, 2013 October 31, 2013 December 2, 2013
4 January 31, 2014 January 31, 2014 February 28, 2014

You must prepare current year Forms W-2. Employers required to file Forms W-2 information electronically will receive an extension for employee copies until October 31, 2013, and for the government copies until December 2, 2013.

SUI or FUTA Exempt Employees

If you had employees who were exempt for state unemployment insurance (SUI) or federal unemployment insurance (FUTA) in 2012, determine if they are still exempt for 2013. If not, let your payroll specialist know immediately.

Note:    If you do not make these changes with your first payroll of the year, please contact your client service representative before making this update.

State Information

There is currently no new state information.

Local Information

Act 32 has made extensive changes to the processes and rules surrounding the calculation and collection of Pennsylvania local Earned Income Tax (EIT). Under Act 32 the tax collection for the thousands of local EIT taxing jurisdictions are being consolidated into 69 county-wide tax collection districts, each governed by a Tax Collection Committee. 

Employees that work or live in PA must pay EIT. Under the rules of Act 32, employers are required to:

  • report each employee’s residence and workplace taxing jurisdiction
  • withhold EIT for each employee at the higher of their resident or workplace (non-resident) taxing jurisdiction rate, and
  • remit the EIT taxes for each employee to the county tax collection bureau associated with the employee’s workplace

Additional locals are supported for the 2013 tax year.

Future Tax Changes

This bulletin contains tax changes for the new calendar year in addition to state withholding table changes known at the time of publication. However, there are state agencies that still have proposed withholding table changes pending that will not be finalized until later this year.

 

2013 Tax Information for Employees

FICA Changes

The following are the Employee FICA wage limits and tax rates for 2013:

Updated December 2012 2012 2013
Social Security (OASDI) wage base $110,100.00 $113,700.00
Medicare (HI) wage base No Limit No Limit
Social Security (OASDI) percentage* 4.2% 6.2%
Medicare (HI) percentage 1.45% 1.45%(2.35% for those earning over $200,000
Total Social Security and Medicare percentage 5.65% 7.65%
Maximum Social Security (OASDI) withholding $4,624.20 $7049.40
Maximum Medicare (HI) withholding No Limit No Limit
Maximum Social Security and Medicare withholding No Limit No Limit
Federal Unemployment Tax (FUTA) $7,000.00 $7,000.00

* Rates may be subject to a payroll change dependent upon the passage of legislation.

Form W-4

If an employee has claimed to be exempt from withholding, complete and send a new Form W-4 by February 15, 2013, to change marital status or number of allowances for federal withholding. Remember to also complete the appropriate state form to change your state withholding.

Social Security Card

For Form W-2 verification purposes, employers are permitted to ask for and copy employee social security cards to ensure that the correct number and name are used.

AppleOne Payroll Services
990 Knox Street
Torrance, CA 90502
Cell: 949-929-9188
Office: 310-516-9359
Fax: 310-516-9690
awalker@appleonepayroll.com
www.appleonepayroll.com
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