July 2024 Compliance Updates: New Vermont Tax & State Updates

New Taxes

Vermont Child Care Contribution (VT CCC)

This tax was added to all Employers with VT Withholding on their account. The default setting for this tax is the full 0.44% to the employer, and 0% to the employee. If you choose to have contribution split and charged to the employee, please work with your account manager to update the setting on your account. The maximum amount that can be charged to an employee is 0.11%.

The first reporting of this tax will be with the 3Q24 VT WTH-436 Quarterly filing.

State Updates

Delaware

DE EARNS opened registration as of July 1, 2024.

DE EARNS is a retirement savings program sponsored by the Office of the State Treasurer. All Delaware employers who have five or more W-2 employees and do not offer a qualified retirement plan, such as a 401(k), must either register for Delaware EARNS or certify for exemption by Oct. 15, 2024, as required by state law. There is no cost for facilitating the EARNS program and no plan-sponsor liability for employers.

Employers can be exempt if they offer a qualified retirement plan, have fewer than five employees, or have been in business less than six months.

Qualified retirement plans include:

• 401(a) - including 401(k)
• 403(a) - qualified annuity plan
• 403(b) - tax-sheltered annuity plan
• 408(k) - Simplified Employee Pension plan
• 408(p) - SIMPLE IRA plan
• 457(b) - governmental deferred compensation plan

More information regarding to exemptions, and how to certify for the exemption can be found here.

The state is hosting a free webinar for Delaware employers to learn more about this program, understand next steps for registering, and ask any questions they may have. It will be held Wednesday, July 17, from noon to 1 p.m.

For more information about Delaware EARNS, visit EARNSDelaware.com or email EARNS@delaware.gov.

Registration is Now Open for Delaware EARNS Retirement Benefit Program - State of Delaware News Click here to learn more.

Kansas

Substitute HB 2570 was signed into law on April 24^th, 2024.

As of July 1, 2024, KS DOL has adjusted the tax rate schedules by lowering rates for positive-rated experienced employers and increasing rates for negative-rated experienced employers. The seven schedules with the lowest tax rates will assign the most positively rated employers a 0% tax rate, which is not possible under the state’s current rate schedules. A 0% will be allowed for contributing employers.

The bill also includes a provision that will subject the most negatively rated employers to the highest applicable tax rate for three consecutive calendar years. To avoid this, these employers will have to make a large enough voluntary contribution so that they are no longer the most negatively rated employers.

Employers will be notified of any changes to their assigned rate.

• The voluntary contribution program allows employers to reduce their unemployment tax rates by voluntarily reimbursing the state unemployment insurance trust fund.
• The deadline for voluntary contributions will be extended to 90 days following the date that experience rate notices are mailed to employers

The bill also adjusts tax rates for new employers. The rate will decrease to 5.55% from 6% for those in the construction industry, and to 1.75% from 2.7% for all others.

This bill will also annually increase the state wage base limit. Starting in 2026, the state’s unemployment-taxable wage base, which is currently $14,000, will be calculated as a percentage of the statewide average annual wage. The percentage will be 25% in 2026 and will gradually increase to 40% by 2030. After 2030, the percentage will remain 40% unless certain conditions are met, in which case the wage base will be permanently set at 45% of the statewide average annual wage.

New York

NY Extends Wage Deductions for Employer-Provided Services.

On June 28^th, Senate Bill 9369 was signed which has extended the expiration date of New York’s 2012 Chapter Law 451, which was set to expire on November 6^th 2024. This is the fifth time that New York has extended the expiration date of the 2012 law. This law originally amended the state’s labor law by adding certain employer-provided services to the list of allowed wage deductions, such as gym passes, parking or mass transit passes, and daycare centers. The 2012 law also allows employers to deduct wages to recover overpayments and wage advances.

This law has been extended until November 6^th, 2026.