Dive Brief:
- To avoid tax reporting and withholding penalties as 2015 ends, employers need to do a final check on their reporting for employees under non-qualified deferred compensation, fringe benefits, health benefits or other compensation, according to a National Law Review article.
- Year-end planning for employers is important, the article says, because employee information reporting, including both Form W-2 and the new Affordable Care Act (ACA) Forms, can mean significantly increased penalties.
- For example, employers must withhold Federal Income and Federal Insurance Contributions Act (FICA) taxes on wages, and failure to do so can result in an employer becoming liable for the non-withheld taxes. Beginning in 2015, the penalties for errors or omissions for information returns have dramatically increased and can be as high as $500 per copy of return, the article notes.
Dive Insight:
The article provides details about how December 31, 2015 marks the deadline for several issues, including: determining the proper value of any taxable fringe benefits enjoyed during 2015; Cafeteria Plan “Use It or Lose It” repercussions; additional medicare tax considerations, same-sex marriage equality tax issues, transit benefits tax issues, and finally, Affordable Care Act reporting.
On the ACA front, the article explains that all employers are subject to annual reporting requirements, and the Internal Revenue Service will use the information from employers and group health insurers to determine individual eligibility for premium tax credits as well as individual compliance (with the individual shared responsibility requirements).
The article explains that the first report is due in 2016 for 2015 coverage, and there are two types of reporting requirements: reporting of minimum essential coverage, and applicable large employer (ALE) reporting on health insurance coverage offered under employer sponsored plans.
There are many other employee end-of-the-year reporting details in the article, so HR leaders might want to take a look even though time has just about run out on 2015.
