Dear Valued Checkmate Client:
As we get close to the end of the year we are writing to let you know what our Holiday Schedule will be and some things to keep in mind to help make the yearend process less stressful.
Holiday Schedule
Our offices will be closed on Friday December 23rd, Monday December 26th and Monday January 2nd, 2012.
Checkmate’s Office Phones
Our office closes for lunch from 12:30 to 1:00 pm each day. We close our office so that our staff can have an uninterrupted period of time to eat lunch and take a break. In order to give our staff time to finish up their morning tasks and get ready for the afternoon we turn on our voice mail system at 12:15 and turn it off at 1:15. During this time (except the lunch ½ hour) you can reach anyone on staff by selecting their extension. In addition as always if you need to contact us in an emergency situation when our office is closed you can call Steve’s cell phone (603)-496-1126.
2012 Payroll Calendar
If you would like a calendar showing your scheduled payrolls for 2012 please let Customer Service Rep. know.
Special payroll packaging during the holidays
If you need any special payroll packaging (ie. paychecks sent to one address and reports sent to another) please let us know as soon as possible.
Will you be changing your office hours during the holidays?
If you are changing office hours during the holidays please let us know so that we can modify your scheduled payroll delivery accordingly.
Changing your pay day during the holidays.
If your pay day falls on a legal holiday we will, in accordance with the labor laws, automatically change your pay day to the preceding business day.
If you are planning to change your pay day during the holidays for any other reason please let us know as soon as possible so we can schedule accordingly.
Christmas or Year-End Bonuses- Please notify us a week in advance if you want a separate payroll run.
Do you plan to issue Christmas or Year-End bonus checks? If so, Checkmate needs to know the following:
- Do you want a separate check for the bonus?
- Direct Deposit- If an employee is normally paid by direct deposit, the bonus will also be direct deposited, unless you specify that you want a paper check.
- Tax Withholding- We use each employee’s regular tax withholding status for bonus payments, unless instructed otherwise. As an alternative, the bonus can be taxed at a rate of 25%, but you must communicate this to us.
- Deductions- Please let us know if the existing deductions (401K, simple IRA, etc.) should be taken out of bonus payments.
- Gross-up- If you want us to gross-up a net bonus let your Customer Service Specialist know. There is a $3.00 charge per check for this service.
Year-End Reporting
Are there any adjustments necessary? If any of the following examples apply to you, please advise Checkmate no later than your last scheduled payroll of 2011.
- Voided checks
- Manual paychecks written by you and not yet reported to Checkmate
- Group Term Life Insurance coverage over $50,000
- Personal use of a company vehicle
- Third-Party Sick Pay benefits
- Non-Cash compensation
- If you are taxed as an S-Corp, providing Health Insurance benefits to employee shareholders, the annual premium paid by the company must be included on the employee shareholders W-2.
- If you offer your employees a pension plan that does not run through your payroll please let us know.
W-2 (Statement of Earnings)
Employers must provide their employees with a completed W-2 by January 31, 2012.
- Checkmate will start printing W-2’s on Saturday, December 31st. We must have any changes with your last scheduled payroll of the year. If you need more time, please let us know and we will adjust accordingly. If you do not notify us of these changes and W-2’s must be reprocessed, an additional processing fee will be charged.
- We will begin distributing W-2’s to our clients by January 16, 2012.
- Please verify addresses for current and terminated employees. If you are using Paychoice online you can run an employee W-2 and Social Security verification report otherwise a master list is available for $5.50.
- Verify Social Security numbers. If you question the validity of an employee's Social Security number, call the Social Security Administration at 800-772-6270 for verification of the number. If Form W-2 does not contain the correct name and Social Security Number, the Internal Revenue Code provides that the employer may be penalized up to $50 for each incorrect Form W-2.
- Encourage your employees to hold onto their W-2s. Due to the processing time involved, there is an $12 charge to re-issue a lost W-2. You can pass this charge on to your employees. We will provide you with a form for the employee to fill out in the event that they need a W-2 reissued.
W-4 (Employees Withholding)
IRS regulations require employers to remind employees to file an amended Form W-4 if their filing status, exemption allowances or exempt status has changed since their last filing of Form W-4. This notice must be provided by December 1st of each year. A new W-4 is not required if the employee status does not change.
Any employee claiming exempt must file a new W-4 for 2012 to retain their exempt status. If a new W-4 is not received by February 15, 2012, you must switch the employee's withholding to Single/Zero. Please let us know if this status needs to be changed, we will not automatically do this for you.
Employment of Children, Spouses, and Parents
If you operate your business as a Proprietorship, a Single Member LLC or a family partnership and you employ your children under the age of 18 their wages are not subject to Social Security or Medicare taxes. If you employ your children under the age of 21, or your spouse, or your parents their wages are not subject to federal or state unemployment taxes. If any of these situations apply to you please make sure to let us know. We also need to be notified when children reach the age of 18 and 21 so that we set them up to start withholding Social Security and Medicare taxes.
Reporting of Employer Provided Health Care Coverage on Form W-2
This is not required for any employer to report on 2011 W-2 forms. Employers that issued more than 250 W-2 forms in 2011 will be required to report health care coverage in Box 12 of the Form W-2 using code DD beginning with the 2012 W-2’s.
In a nutshell the amount to be reported is the total cost of the health insurance coverage paid by both the employee and employer. It is not necessary to report any other type of insurance (including; dental, vision, etc.) if it is not a part of the health insurance coverage.
There are a few ways to value the amount that is reported. The actual premium paid should be used for employers with a health insurance policy. For self-insured employers the amount to report is the “COBRA Applicable Premium” amount.
Unless the law is changed or deemed unconstitutional all employers that provide their employees with access to health insurance will be required to report on the 2013 W-2’s which will be issued in 2014.
Changes to note for 2012
- Social Security wage base increases to $110,100 for 2012. As in prior years, there is no limit to the wages subject to the Medicare tax; therefore, Medicare wages are still subject to the 1.45% tax.
- Social Security tax rate for employees is scheduled to increase from 4.2% to 6.2% in 2012. There is proposed legislation to keep the employee Social Security tax rate at 4.2%.
- Maximum annual employee contribution to 401K and 403B plans remains the in increasing to $17,000. Employee and employer contributions to Simple plans remains at $11,500. The catch-up contribution for employees who reach age 50 during the plan year, remains at $5,500 for 401K and 403B plans and $2,500 for Simple plans.
- Health Savings account contribution limits increase to $3,100 for single plans and $6,250 for family plans. The catch-up contribution for employees who reach age 55 during the plan year, stays at $1,000.
- The IRS has not yet released the standard mileage rates for 2012. The rates are typically updated in December for the following year. So we expect the IRS to release the standard mileage rates for 2012 in December of 2011.
- NH Unemployment taxable wage base is increasing from 12,000 to 14,000 on January 1, 2012.