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PAYROLL TAX AND ANNUAL FILING GUIDELINES 2021 – 2022

New for 2022New York Mandatory Auto-IRA Law – On October 21, New York mandated that certain employers either offer a qualified retirement plan or join a state-facilitated retirement saving program.  The following is a description of some key features of the New York State Secure Choice Saving Program. This applies to for-profit and non-profit employers in New York State that meet the following requirements:

  • Employer had at all times during the previous calendar year at least ten employees in the state;

  • Employer has been in business for at least two (2) years; and

  • Employer does not offer a qualified retirement plan.

Enrollment of employees to begin no later than December 31, 2021.  A participating employer’s duties under this program are designed to be purely administrative.  As such, participating employers must:

  • Set up a payroll deposit retirement savings arrangement;

  • Automatically enroll each employee who does not opt out of the program;

  • Withhold and remit employee contributions to the program; and

  • Disseminate the state’s employee information materials.

This program is designed with the intention of not creating an employer-sponsored retirement plan subject to ERISA.  Thus, unlike with a 401(k) plan, for example, participating employers will not have to perform nondiscrimination testing or the like.

As of this date, the New York State website has very little additional information available regarding this mandate.  Additional information should become available at some point.

New York State Sick Leave (NYSSL) – New York State is requiring all employers to provide sick leave to employees.  Some of the key points of the law includes:

  • Employers with at least 100 employees must provide 56 hours of paid sick leave;

  • Employers with 5 – 99 employees must provide 40 hours of paid sick leave;

  • Employers with fewer than 5 employees and a net income in excess of $1 million in the previous tax year must provided 40 hours of paid sick leave; and

  • Employers with fewer than 5 employees and a net income of less than $1 million in the previous tax year must provided 40 hours of unpaid sick leave.

For more information on this please visit:  ny.gov/programs/new-york-paid-sick-leave.

New York Paid Family Leave (PFL) – PFL benefits are required for most private sector employers with one or more employees.  The cost of coverage may be funded through employee payroll deduction.  The maximum employee contribution for 2022 will be 0.511% of an employee’s gross wage, and is capped at annual amount of $423.71 per employee. An employer may choose to pay for the paid family leave benefit on behalf of employees.  For more information go to:  https://paidfamilyleave.ny.gov.

Social Security and Medicare for 2022 The total withholding for social security continues at 6.2% for the employee withholding and 6.2% for the employer match. The wage base for 2022 increases to $147,000 and the maximum tax is $9,114.00 (6.2% of $147,000).  There is no limit on the amount of earnings subject to Medicare tax.  The Medicare tax rate remains at 1.45%, with the exception of “Additional Medicare Tax” for higher wage earners (explained below).  The employer match also remains the same at 1.45% of gross wages with no ceiling. 

Additional Medicare Tax – Employers are required to withhold an Additional Medicare Tax of .9% on wages and other compensation that is paid to a single employee in excess of $200,000 in a calendar year.  There is no employer match on the compensation subject to Additional Medicare Tax.

NYS Sexual Harassment Prevention – All employers are required to adopt a policy and training program or establish a prevention policy and training program that “equals or exceeds the minimum standards” established by the Department of Labor and the Division of Human Rights (see model policy at NYS website).  For more information, go to: www.ny.gov/combating-sexual-harrassment-workplace/employers.

Minimum Wage for 2022 – The minimum wage increases to $13.20 per hour for wages paid in the greater area of New York State.

Federal Unemployment Insurance – The federal wage base for unemployment insurance continues at $7,000 for 2022 with the effective tax rate of .6%

NYS Unemployment Insurance – NYS unemployment wage base for 2022 has been raised to $12,000.

Notice and Acknowledgement of Pay Rate and Payday – Forms LS 54 – 57 – You must have a completed Form LS 54, 55, 56 or 57 (depending on the type of employee), on file for all employees.  This form should also be updated every time a change in wages occurs.  A signed, completed copy must also be provided to the employee and one copy is to be retained in the employee file.  A copy of these forms can be obtained at www.labor.ny.gov/home. (Labor Law 195(1))

PAYMENT OF WITHHOLDING TAXES

Federal Payment Requirements:     

IRS should have notified you during the fourth quarter of 2021 of your depository status for 2022.  This status is determined by your history of total withholding liability for the period 07/01/20 through 06/30/21.  If that total is more than $50,000, you are required to make semi-weekly deposits. If your accumulated liability for a quarter is over $2,500, you must make monthly deposits.  IRS must notify you of being a 944 filer.  The computation of liability remains the same:

Total Deposit = (Social Security W/H @ 6.2% X 2) + (Medicare W/H @ 1.45% X 2) + Federal W/H
(also include “Additional Medicare Tax” withholding for wages greater than $200,000)

Payment of payroll tax liability is determined by the following:

Deposit Rule for Form 941

1. End of quarter, liability is under $2,500
2. End of month, liability is under $2,500
3 . Monthly Depositor
4 . Semi-Weekly Depositor
      a. Pay Date Wed thru Friday
      b. Pay Date Sat thru Tuesday
5. Over $100,000

Deposit Due

1. No deposit needed, attach check to Form 941
2. Accrue to next month (unless at end of quarter)
3. Deposit due on 15th day after end of month
4. Depends on Pay Date:
      a. Deposit due following Wednesday
      b. Deposit due following Friday
5. Deposit due by next business day

REMINDER – For employers using EFTPS, all types of federal tax must be paid electronically.

New York State Payment Requirements:
Liability is computed based on actual total withholding of New York State tax and is summarized as follows:

Deposit Rule

Total Withholding:

Deposit Due:


$0.00 -$699.99

Due quarterly when Form NYS-45 is filed electronically


$700.00 and over

Due to NYS  electronically within five business days of the payroll date that created the liability in excess of $700 (due within three days if total liability for  withholding tax in 2021 was over $15,000)

NYS mandates electronic filing of forms NYS-1 and NYS-45.

If you have filed at least once during the calendar quarter (using Form NYS-1) and have an unremitted balance of tax withheld that is less than $700 after the last payroll of the quarter, remit this amount with your quarterly return, Form NYS-45, instead of with Form NYS-1.

QUARTERLY REPORTING REQUIREMENTS
(Due the last day of January, April, July and October)

FORM 941 – FEDERAL WITHHOLDING TAXES – "Employer's Quarterly Federal Tax Return", used by employers who withhold income, social security and medicare from employees’ wages, must be filed every quarter (with the exception of seasonal employers), even if employees had no wages.

FORM 940 – DEPOSITS OF FEDERAL UNEMPLOYMENT INSURANCE TAX – Federal Unemployment Insurance (FUTA Tax) is computed on a quarterly basis at the net rate of 0.6% of the first $7,000 in gross wages paid per employee per calendar year.    No deposit is required for any quarter in which the liability plus the accumulated liability for the previous quarters is less than $500 (except for fourth quarter).  You must make your deposit using EFTPS if over $500, (see annual reporting requirements below).

FORM NYS–45 AND NYS–45–ATT – NYS COMBINED WITHHOLDING & UNEMPLOYMENT – New York State continues to use Form NYS–45, "Quarterly Combined Withholding Wage Reporting and Unemployment Insurance Report" to report quarterly liability for unemployment insurance along with reconciling NYS withholding for the quarter.  The Wage Base for NYS unemployment has been increased to $12,000 for 2022.   Form NYS–45–ATT is to be used when there are six or more employees. You must complete all of Form NYS-45, Part C Columns A thru E, each quarter for all employees. NYS mandates electronic filing of these forms.

ANNUAL REPORTING REQUIREMENTS

FORM 944 – This is the ANNUAL form designed for small businesses whose annual liability is less than $1,000 to file and pay.  This form along with payment of tax due must be filed and paid by January 31st. The computation of liability is (Social Security withholding @ 6.2% X 2) + (Medicare withholding @ 1.45% X 2) + Federal withholding. NOTE: If your liability increases during the year, you must make monthly payments using the $2,500 rule.
 
FORM 940 – This is the ANNUAL Federal Unemployment Insurance Tax form for employers, which reconciles all payments made, if any, for the year to quarterly liabilities. The balance, if under $500, may be paid with the form, all others must make the deposit using EFTPS.

FORM W-2 – “Wage and Tax Statement.”  Wage statements must be completed and distributed to employees by January 31, 2022. Please review the instructions before completion. Use forms W–2C and W–3C to correct errors on previously filed W–2’s and W–3.

FORM W-3 – “Transmittal of Wage and Tax Statements.”  This is a transmittal and reconciliation form required to accompany the W-2 Forms. Form W–3, together with W–2's are to be filed by January 31, 2022 with the Social Security Administration.

FORM 1099 and 1099-NEC – Form 1099-NEC (Non-Employee Compensation) will be used to report any payments to nonemployee service providers.  Form 1099-MISC will be used to report rent paid, legal settlements, prizes or award winnings and other income not subject to self-employment taxes. Make sure to have recipients fill out a W-9 before payment is made to ensure that proper tax reporting information is obtained for required 1099 Filing.

If you do not obtain a completed W-9, you must withhold and submit 24% federal withholding to the IRS from the payment made to the recipient. You must provide the recipient with a copy of Forms 1099-NEC or 1099-MISC and also file with the IRS on or before January 31, 2022

FORM 1096 – “Annual Summary and Transmittal of U.S. Information Returns.”  A separate transmittal Form 1096 along with prepared Form 1099’s must be filed with the Internal Revenue Service. Please refer to www.irs.gov/pub/irs-pdf/i1099gi.pdf regarding due date for 1099 filings.

If you do not receive the forms from the taxing agencies, you should contact those agencies and request the missing forms be mailed to you as soon as possible. Telephone numbers of the various agencies are:
IRS – Information for Individuals 1-800-TAX-1040 (829-1040)
IRS – Information for Business and Specialty Tax Line 1-800-829-4933
IRS – Forms and Publications  1-800-TAX-FORM (829-3676)
IRS – Information on Electronic Filing (EFTPS) & Payments 1-800-555-4477


Social Security Administration – General Questions  1-800-772-1213
Social Security Administration – Employers   1-800-772-6270

NYS Dept. of Tax & Fin – Taxpayer Assistance  1-518-457-5181
NYS Dept. of Tax & Fin – Taxpayer Assistance - Forms  1-518-457-5431
NYS Dept. of Tax & Fin – Sales Tax Assistance 1-518-485-2889
NYS Fair Labor Standards 1-888-469-7365
NYS Labor Dept. – Unemployment Insurance Information  1-888-899-8810
NYS Dept of State – Division of Corporations  1-518-473-2492
NYS Workers Compensation Disability Benefits Bureau 1-800-353-3092
NYS Workmen’s Compensation Board 1-877-632-4996
NYS Paid Family Leave 1-844-337-6303
NYS New Hire Notification – Fax 1-518-320-1080

Most forms and publications can be downloaded by going to the following websites:

Internal Revenue Service www.irs.gov
IRS – Forms, Instructions, and Publications www.irs.gov/forms-instructions
U.S. Department of Labor   www.dol.gov
Social Security Administration   www.ssa.gov
U.S. Citizenship and Immigration Services www.uscis.gov
EFTPS (Electronic Federal Tax Payment System) www.eftps.gov/eftps/
NYS Department of Taxation & Finance www.tax.ny.gov
NYS Forms and Instructions www.tax.ny.gov/forms/
NYS Department of Labor    www.labor.ny.gov
NYS New Hire Online https://www.tax.ny.gov/bus/wt/newhire.htm
NYS Paid Family Leave  https://paidfamilyleave.ny.gov
NYS Programs including: Sexual Harassment;
COVID-19; Paid Family Leave, NYS Sick Leave
www.ny.gov/programs

This payroll tax and annual filing guideline has been prepared as a guide and does not attempt to take the place of any of the publications provided to you by the various taxing authorities.  

If you have any questions, please do not hesitate to call our office at (607) 432-8700.

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