Welcome Relief to Employers

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In an out-of-character act of good sense, congress has passed legislation to eliminate the penalty on employers who reimburse their employees for the cost of their individual health insurance premiums.  The President has issued a statement in support of the legislation and is expected to sign it into law once it reaches his desk.

Under Section 18001 of the 21st Century Cures Act, employers will be permitted to compensate employees for the cost of individual insurance premiums or medical visits.    Previously, employers who were doing this were subject to fines of $100 per day for each employee, or up to $36,500 a year.   For employers who couldn’t afford group health insurance plans but still wanted to help their employees cover the cost of their health insurance, these potential fines forced them to include the reimbursement as taxable income to the employee.  This new legislation will eliminate the need to do that.

This is welcome relief in an ever increasingly difficult health care situation for many Americans.

Stay tuned for more details on this new legislation once it is signed into law.

PA UC Issues Update

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We wanted everyone to be aware of the changes that are effective January 1, 2017 in regards to employer’s Unemployment compensation payments.

As of that day all employers whose liability exceeds $5,000 in any period will be required to make payments electronically. The liability owed for a period, includes contributions, reimbursement of benefit charges, interest penalty and fees. Regardless of the future liabilities, once the liability exceeds $5,000 in any given quarter, payments will be required to be submitted electronically in future periods.

Employers will have three electronic options within UCMS: ACH Debit, ACH Credit or credit card payments. The department notes that ACH Debit provides the most efficient and accurate transfer of information and is therefore the preferred method of payment.

If you have any questions, please call our office or visit our website at www.rmfcpallc.com

New Jersey changes course on reciprocity; Will remain in place with Pennsylvania

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states

The Pennsylvania Department of Revenue announced this morning that it has been notified by the State of New Jersey that it will not terminate an 40-year old reciprocal tax agreement between the states.

The agreement allows Pennsylvania residents to work in New Jersey but not pay New Jersey state income tax. The same goes for a New Jersey resident working in Pennsylvania.

Consequently, New Jersey employers will continue to withhold and remit Pennsylvania tax on its Pennsylvania employees, while PA employers will do the same for NJ employees.

New Jersey had previously decided to end the arrangement during a budget and spending battle within its State Legislature.

Pennsylvania had been sending notices to employers with information about the change to help those businesses and individuals that would be affected could prepare for the change. Those notices can now be disregarded.

The agreement has been in place since 1977 and Pennsylvania notes it is pleased it will continue

Texas Judge blocks Overtime rule

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A Texas judge provided a preliminary injunction to the Labor Department’s New Overtime Rule that was set to go into effect on December 1.

The Gettysburg Adams Chamber of Commerce summarized the judicial action in an email to it’s members.

The Labor Department’s contentious overtime rule was blocked Tuesday by a federal judge in Texas, putting one of President Obama’s top regulatory initiatives in jeopardy.
In a 20-page order, Texas U.S. District Judge Amos Mazzant issued a temporary injunction halting the rule nationwide.

“Due to the approaching effective date of the Final Rule, the Court’s ability to render a meaningful decision on the merits is in jeopardy,” he wrote. “A preliminary injunction preserves the status quo while the Court determines the department’s authority to make the Final Rule as well as the Final Rule’s validity.”

The rule would have extended overtime pay to more than 4 million workers starting Dec. 1, but the effective date has now been indefinitely pushed back. It would have required employers to pay overtime to most salaried workers who earn less than $47,476 annually, a much higher threshold than the current annual salary limit of $23,660.

It is unknown whether the litigation will kill the rule entirely, but a decision is likely not going to be made before Jan. 20.

Please call Raffensperger, Martin & Finkenbiner, LLC if you have specific questions.