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October 23 - 28 Compliance Updates

Oct 28, 2022 3:05:49 PM
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Shift Workers May Be Affected by November 6 End to Daylight Savings Time

Daylight Savings Time ends at 2:00 a.m. on November 6, when clocks are set back by one hour across most of the country. According to the U.S. Department of Labor (DOL), employees working the overnight shift when daylight savings time ends work one hour more because the clocks are set back one hour [DOL website, eLaws FLSA Hours Worked Advisor].

For example, an employee's scheduled shift starts at 11:00 p.m. and ends at 7:30 a.m. the next day. The employee works an eight-hour shift and receives a 30-minute lunch break. On the Sunday that Daylight Savings Time ends at 2:00 a.m., the employee works the hour from 1:00 a.m. to 2:00 a.m. twice because at 2:00 a.m. all of the clocks are turned back to 1:00 a.m. Thursday, on this day the employee worked nine hours, even though the schedule only reflected eight hours.

The Fair Labor Standards Act (FLSA) requires that employees must be credited with all of the hours actually worked. Therefore, if the employee is in a work situation similar to that described in the above example, he or she worked nine hours on the day that daylight savings time ends.

Daylight saving time is not observed in Arizona (with the exception of the Navajo Nation), Hawaii, Puerto Rico, the Virgin Islands, American Samoa, Northern Mariana Islands, and Guam.

2022 Instructions for Employer's Annual Information Return of Tip Income Released

The IRS has released its 2022 instructions for Form 8027 (Employer's Annual Information Return of Tip Income and Allocated Tips) for 2022. Employers are required to file an annual report with the IRS disclosing receipts and tips from their large food or beverage establishments, and Form 8027 is used to report that information. Employers also use Form 8027 to determine allocated tips for tipped employees 

Background. Any employer who operates a large food or beverage establishment must file Form 8027. A "large" food or beverage establishment is one that: (1) is located in the 50 states or the District of Columbia; (2) where tipping of food or beverage employees by customers is customary; and (3) whose employer normally employed more than 10 employees on a typical business day during the preceding calendar year.

No changes to the 2022 instructions. There are no substantive changes to the 2022 instructions. However, the IRS has eliminated the dedicated TDD/TTY number and now directs taxpayers who are deaf or hard of hearing using a relay service to call any of the toll-free numbers. Technical Services Operation (TSO) is available to answer questions about reporting on Forms 8027 at (866) 455-7438. 

Optional worksheet. Businesses may complete an optional worksheet to determine if they employed more than 10 employees on a typical business day during 2022 and are required to file Form 8027. The average number of employee hours worked on a typical business day determines whether an establishment employed more than 10 employees. The worksheet should not be sent to the IRS and is for the employer's information only.

Electronic filing. The instructions note that any employer who is required to file 250 or more Forms 8027 must file the forms electronically. Information returns are filed electronically through the Filing Information Returns Electronically (FIRE) system. Other employers are encouraged to file electronically even if they are not required to file 250 or more Forms 8027.

Observation: The instructions note that the IRS was authorized to issue regulations to reduce the electronic filing threshold under the Taxpayer First Act of 2019 for various information returns, including Forms 8027. The instructions note the threshold will remain at 250 returns for the 2022 tax returns filed in 2023 until final regulations are issued.

Deadline. Employers should file Form 8027 (and Form 8027-T when filing more than one paper Form 8027) by February 28, 2023. However, for employers who file electronically, the due date for Form 8027 is March 31, 2023.

Draft Form 8027. The IRS released a draft version of the 2022 Form 8027 on June 13, 2022. The form has not yet been finalized. The 2022 draft version contains no substantive changes.

Form 8027-T. Form 8027-T (Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips) was last revised October 2021 and is not year specific. Form 8027-T accompanies Forms 8027 when submitted to the IRS when the taxpayer has more than one establishment that Forms 8027 are filed.

Car Wash in Hot Water for Underpaying Employees

An investigation by the U.S. Department of Labor's (DOL) Wage and Hour Division (WHD) netted a total of $202,192 in back wages and liquidated damages for 13 workers at a car wash, whose employer short-changed them, tried to conceal their wrongdoing, and committed other violations of federal law.

Investigative findings. The WHD  found that a California car wash routinely gave workers two paychecks: one for the first 40 hours worked, and a second for overtime hours. However, any of the overtime hours were paid at the employee's regular rate of pay, with no overtime premium.

Furthermore, the WHD determined that the employer required workers to take lunch breaks as customer demand dictated. As a result, employees were not generally able to take uninterrupted one-hour lunch breaks, but the employer still deducted an average of 4 hours per week for lunch breaks. This practice violated the Fair Labor Standards Act.

Penalty. The WHD imposed a penalty of $101,096 in back wages and an equal amount of $101,096 in liquidated damages for the affected workers.

WHD comments on the investigation. WHD District Director Gayane Aleksanian stated that: "Federal law requires that employers pay workers all their hard-earned wages, including overtime pay for hours employees work over 40 in a workweek. Rancho Carwash's operator denied workers their overtime pay and then attempted to hide their illegal pay practices. The costly consequences for their violations and their attempt to evade the law are now clear."

In fiscal year 2021, the Wage and Hour Division recovered more than $138 million in unpaid overtime wages for more than 145,000 workers [Wage and Hour Division News Release, No. 22-914-SAN, 10/24/2022]

IRS Publication Providing Specifications for Substitute Forms and Schedules Updated

The IRS has updated Publication 1167, General Rules and Specifications for Substitute Forms and Schedules. The publication provides guidelines and general requirements for the development, printing, and approval of the 2022 substitute tax forms. IRS approval will be based on these guidelines.

The updated guide provides such information as:

  • General guidelines for submissions and approvals
  • Physical aspects and requirements
  • Additional resources
  • Requirements for specific tax returns
  • Format and Content of Substitute Returns
  • Miscellaneous Forms and Programs
  • Additional information

The guide does not cover requests for documentation or information initiated by the IRS, or "General Instructions" or "Specific Instructions."

What's new? This year, editorial changes were made, eliminating repetitive information. Additionally, the publication was updated to explain that the IRS requires tax preparation software firms that participate in the IRS Free File Program include the three-letter FFF code on all paper Form 1040 returns created by their individual tax preparation software.

Industry Group Sends Letter Urging Extension of Tip Credits to Beauty Professionals

The Beauty Professional Association (BPA) has composed a letter to members of Congress urging that the tip credit rules be extended to beauty professionals. The letter was signed by 3,850 BPA members.

The BPA letter expresses its belief that enactment of the Small Business Tax Fairness and Compliance Simplification Act would provide employer-based beauty service establishments access to a tool designed to support small business and increase tip reporting compliance. The letter states that beauty salons and barbershops comprise the second-largest industry with tipped employees, employing women and minorities well above the national average.

The majority of beauty industry establishments are small businesses. 83% have less than 10 employees. The PBA feels that extending the credit would "address an inequity that has existed for almost thirty years, create parity with the largest tip industry and allow these small business employers to redeploy these savings to further support their employees and expand their businesses."

The letter acknowledges the importance of accurate reporting of tip income and adds that the proposed legislation not only provides incentives to increase employment tax compliance, but also helps ensure that employees will be credited with the employment taxes paid on their tip income. 

The bill, the BPA believes, supports employer-based establishments and will help improve tip reporting compliance. The letter concludes that: "Extending the credit is a win for the employer who can grow her business and reduce uncertainty. It is a win for the employee who will have increased retirement security and other benefits. And, it is a win for the government that will collect more revenue."

Labor Department Extends Comment Period for Proposed Worker Classification Rule

The U.S. Department of Labor (DOL) has announced a 15-day extension of the comment period for its notice of proposed rulemaking (NPRM),  Employee or Independent Contractor Classification Under the Fair Labor Standards Act, which was published in the Federal Register on October 13, 2022.

Publication of the NPRM in the Federal Register started the comment period that is now being extended from 46 days to 61 days. The comment period will now close on December 13, 2022, instead of November 28, 2022. All comments submitted (including duplicate comments) become a matter of public record and will be posted without change to, including any personal information provided.

This NPRM, Employee or Independent Contractor Classification Under the Fair Labor Standards Act, proposes to:

  • Align the Department’s approach with courts’ interpretation of the FLSA and application of the economic reality test;
  • Restore the longstanding multifactor, totality-of-the-circumstances analysis to determine whether a worker is an employee or an independent contractor under the Fair Labor Standards Act;
  • Ensure that all factors are analyzed without assigning any predetermined weight to any particular factor or set of facts;
  • Return to the longstanding interpretation of the factors, including the investment factor, control factor, profit or loss factor, and the integral factor, which considers whether the work is integral to the employer’s business; and
  • Rescind the 2021 Independent Contractor Rule.

The DOL is inviting comments from the public on the proposed rule. All comments must be received by 11:59 p.m. ET on December 13, 2022, to be considered in this rulemaking. Address written submissions to: Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue, N.W., Washington, DC 20210.

Sweet Potato Industry Targeted in DOL Wage Theft Initiative

The Department of Labor's Wage and Hour Division (WHD) is spearheading an initiative aimed at educating employers in the North Carolina sweet potato industry regarding wage payment requirements in the wake of historic highs in violations. 

Wage requirements for agricultural workers. Workers in the agricultural industry are subject to slightly different wage and hour laws than the average worker, including different exemption requirements from overtime pay and minimum wage. Workers in this industry often work on a temporary or seasonal basis, or have limited English language literacy, which can leave them vulnerable to wage payment violations by employers. As a result, the WHD has conducted a number of investigations of agricultural employers and found a high percentage of employers to be in violation of wage and hour rules.

The sweet potato industry initiative. The WHD has made a number of resources available for workers on its website, and will begin a targeted outreach to employers in the industry to inform them of their responsibility to workers [DOL News Release, US Department of Labor Initiative Seeks to Protect North Carolina's Sweet Potato Farmworkers from Wage Theft, Other Violations, Release 22-2050-ATL, 10/19/2022]. 

New IRS Publication Provides Guidance on Written Information Security Plans for Accounting Professionals

The IRS has released IRS Publication 5708 (Creating a Written Information Security Plan for your Tax & Accounting Practice). The 29-page publication was prepared by the Security Summit through the partnership between the IRS, state tax agencies, private-sector tax groups as well as professionals. The publication features a sample security plan for tax and accounting professionals with smaller practices in mind to help secure data and information.

According to Jared Ballew of Drake Software, co-lead for the Summit tax professional team and incoming chair of the Electronic Tax Administration Advisory Committee (ETAAC), "The sample provides a starting point for developing your plan, addresses risk considerations for inclusion in an effective plan and provides a blueprint of applicable actions in the event of a security incident, data losses and theft."

Background. The Gramm-Leach-Bliley Act (GLBA) requires all professional tax preparers to create and implement a data security plan. 

Overview of a Written Information Security Plan (WISP). The IRS notes in the publication that a WISP should be tailored to the individual needs of the practice with the following factors in mind: (1) the company's size, (2) scope of activities, (3) complexity, and (4) the level of client data sensitivity. No single approach can be used. 

Sample WISP template. The Sample WISP template includes: 

  • Objectives, purpose and scope. This would include stating compliance with GLBA provisions
  • Identifying responsible individuals. This includes a list of users and data access levels as well as the individuals who are responsible for security programs.
  • Risk assessment. This identifies what type of information is handled, potential areas of data loss, and how data will10/28 be monitored and risks assessed.
  • Hardware inventory. A list of hardware and locations as well as information stored or processed on the hardware. 
  • Safety measures. This includes data collection and retention, disclosure, user access, Wi-Fi access, remote access, connected devices, and a draft Employee Code of Conduct.
  • Implementation clause. After the WISP has been finalized, the implementation clause is used to document the date of implementation, the firm's name, compliance with GLBA and Federal Trade Commission Financial Privacy and Safeguards Rule and any applicable state requirements, and should be signed by the principal operating officer or owner and the Data Security Coordinator (DSC). 
  • Attachments. The publication contains several sample attachments, including record retention policies, rules of behavior and conduct safeguarding client data, security breach procedures and notifications, and sample forms to record information such as hard inventory and authorized users. 

IRS Reminder Service Providers and Others They May Receive Forms 1099-K for Sales Over $600 in Early 2023

The IRS reminds taxpayers earning income from selling goods and/or providing services that they may receive Form 1099-K (Payment Card and Third-Party Network Transactions) for payment card transactions and third-party payment network transactions of more than $600 for the year.

There is no change to the taxability of income; the only change is to the reporting rules for Form 1099-K. As before, income, including from part-time work, side jobs or the sale of goods, is still taxable. Taxpayers must report all income on their tax return unless it is excluded by law, whether they receive a Form 1099-NEC (Nonemployee Compensation), Form 1099-K, or any other information return.

The IRS emphasizes that money received through third-party payment applications from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable.

The American Rescue Plan Act of 2021 lowered the reporting threshold for third-party networks that process payments for those doing business. Prior to 2022, Form 1099-K was issued for third-party payment network transactions only if the total number of transactions exceeded 200 for the year and the aggregate amount of these transactions exceeded $20,000. Now a single transaction exceeding $600 can trigger a 1099-K.

Income taxes must generally be paid as taxpayers earn or receive income throughout the year, either through withholding or estimated tax payments.

If the amount of income tax withheld from one's salary or pension is not enough, or if they receive other types of income, such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards, they may have to make estimated tax payments.

IRS Announces 2023 Dollar Limitations for Pension Plans

The IRS has announced the dollar limitations for pension plans and other retirement-related items for the 2023 tax year. Several limitations are higher than in 2023 due to cost-of-living adjustments [IR 2022-188; Notice 2022-55].

  • Elective deferrals. The limitation on the exclusion for elective deferrals under Code Sec. 402(g)(3) will increase to $22,500 in 2023 ($20,500 in 2022). This limitation affects elective deferrals to various plans, including Code Sec. 401(k) plans, Code Sec. 403(b) annuities, SEPs, and the federal government's thrift savings plan.
  • Defined benefit plans. The limitation on the annual benefit under a defined benefit plan will increase to $265,000 in 2023 ($245,000 in 2022). For participants who separated from service before January 1, 2023, the limitation for 2023 is computed by multiplying the participant's compensation limitation, as adjusted through 2022, by 1.0833.
  • Defined contribution plans. The limitation on total annual contributions to defined contribution plans will increase from $61,000 to $66,000 in 2023.
  • Annual compensation limit. The maximum amount of annual compensation that may be taken into account for various qualified plan purposes, including plans under Code Sec. 401(a)(17), Code Sec. 404(l), Code Sec. 408(k)(3)(C), and Code Sec. 408(k)(6)(D)(ii), will increase from $305,000 to $330,000 in 2023.
  • Key employee in top-heavy plan. The dollar limitation under Code Sec. 416(i)(1)(A)(i) that is used in the definition of a key employee in a top-heavy plan is $215,000 in 2023 ($200,000 in 2022).
  • Highly compensated employee. The dollar amount used in defining highly compensated employees for nondiscrimination testing purposes under Code Sec. 414(q)(1)(B) is $150,000 in 2023 ($135,000 in 2022).
  • ESOP five-year distribution period. The dollar amount for determining the maximum account balance in an employee stock ownership plan (ESOP) subject to a five-year distribution period will increase from $1,230,000 to $1,330,000 in 2023, while the dollar amount used to determine the lengthening of the five-year distribution period will be $265,000 ($245,000 in 2022).
  • Catch-up contributions. The dollar limitation for catch-up contributions to an applicable deferred plan (other than SIMPLE plans) for individuals aged 50 or over will increase to $7,500 in 2023  ($6,500 in 2022). The dollar limitation for catch-up contributions under SIMPLE plans will increase to $3,500 in 2023 ($3,000 in 2022). 
  • Compensation limit on grandfathered government plans. The annual compensation limit under Code Sec. 401(a)(17) for eligible participants in certain governmental plans that, under the plan as in effect on July 1, 1993, allowed COLAs to the plan's compensation limit to be taken into account, will increase from $450,000 to $490,000 in 2023.
  • SEP compensation limit. The annual compensation limit under Code Sec. 408(k)(2)(C) will increase to $750 in 2023 ($650 in 2022). Employees who earn more than $750, and who meet other requirements, must be allowed to participate in the employer's SEP plan. 
  • SIMPLE salary deferrals. The maximum amount of compensation that an employee/participant may elect to defer to a SIMPLE plan will be $15,500 in 2023 ($14,000 in 2022). 
  • Government deferred compensation plans. The limit on deferrals to Code Sec. 457 deferred compensation plans of state and local governments and tax-exempt organizations will be $22,500 in 2023 ($20,500 in 2022).
  • Control employee. The employee compensation amount used in the definition of "control employee" for purposes of the auto commuting valuation rule in Reg. § 1.61-21(f)(5)(iii) will increase from $245,000 to $265,000 in 2023. The compensation amount used in the definition of company officers who are ineligible for the commuting valuation rule in Reg. § 1.61-21(f)(5)(i) will be $130,000 in 2023 ($120,000 in 2022).

Federal Employment Tax Deadlines for November

We have listed the November payroll tax deposit deadlines for semi-weekly and monthly depositors below.

Semi-weekly depositors. Semi-weekly depositors must deposit the income tax they withheld from employee wages, and both the employee and employer share of Social Security and Medicare taxes (FICA taxes), by the end of Wednesday if the payday was on the previous Wednesday, Thursday, or Friday; or by the end of Friday if the payday was on the previous Saturday, Sunday, Monday, or Tuesday.

A due date that falls on Saturday, Sunday, or a legal holiday is postponed until the next business day. Semi-weekly depositors must have at least three business days after the end of a semiweekly period to deposit their taxes.

The November deposit deadlines for semi-weekly depositors are as follows: 

  • November 2 - deposit the taxes for payments made October 26-28
  • November 4 - deposit the taxes for payments made October 29 - November 1
  • November 9- deposit the taxes for payments made November 2-4
  • November 14 - deposit the taxes for payments made November 5-8
  • November 16 - deposit the taxes for payments made November 9-11
  • November 18- deposit the taxes for payments made November 12-15
  • November 23 - deposit the taxes for payments made November 16-18
  • November 28 - deposit the taxes for payments made November 19-22
  • November 30 - deposit the taxes for payments made November 23-25

Monthly depositors: Filers who have a monthly deposit frequency must deposit the tax for October by November 15.

Tips. Employees must report tips of $20 or more earned during October to employers by November 10.

Holidays. Friday, November 11, is Veterans Day. Thursday, November 24, is Thanksgiving Day. 

Federal unemployment tax. By October 31, deposit the tax owed through September if more than $500.

Form 941 - Social Security, Medicare, and withheld income tax. File Form 941 for the third quarter of 2022 was to be filed by October 31. However, taxpayers who deposited the tax for the quarter timely and in full have until November 10 to file the return.

Income tax withholding - generally. During November. employers should encourage employees to fill out a new Form W-4 or Form W-4(SP) for 2023 if they experienced any personal or financial changes.

State Payroll Tax News

Alaska—Minimum Wage Rate to Increase to $10.85 in 2023

The Alaska Department of Labor and Workforce Development has announced that the minimum wage will increase from $10.34 to $10.85 in 2023. Voters passed a ballot initiative in 2014 to adjust the minimum wage annually for inflation. Alaska law requires the Alaska minimum wage to be adjusted using the Consumer Price Index for urban consumers in the Anchorage metropolitan area (Anchorage CPI-U) for the preceding calendar year. The Anchorage CPI-U increased 4.9% in 2021. As a result, the minimum wage will rise from $10.34 to $10.85, effective January. 1, 2023. 

California—Employment Department Issued Updated Benefit Charges Forms

The Employment Development Department (EDD) has issued the Statement of Reimbursable Benefit Charges (DE 428R) and School Employees Fund Employer Statement of Benefit Charges (DE 428F) for the third quarter of 2022. The issue date is October 25, 2022. The Notice of Amount Due (DE 6601) and Statement of Account (DE 2176) will be sent two weeks after the benefit charge statements are issued. The EDD explains that to view the DE 428R and DE 428F and submit protests to unemployment benefit charges online, visit e-Services for Business [EDD Tax Branch News #501].

Colorado—State's Employer Update Newsletter Says Unemployment Rate Notices Out in Mid-November

The Colorado Department of Labor and Employment (CDLE) has announced that unemployment tax rate notices for 2023 will be mailed out to employers in mid-to-late November. The CDLE notes that if an employer does not receive its notice by January 2023, the employer should contact the state or log in to MyUI Employer. Also, the CDLE explained that since it launched the MyUI+ system in 2021, employers with multiple reporting units have been viewed as one employer, which caused separation fact-finding to go only to the primary account and charging to be initially applied to incorrect units. The CDLE is now sending fact-finding to the appropriate unit ID for whom the claimant worked, and employer charging will be attributed to the correct unit. Employers with multiple units may now see fact-finding that they have not seen this since January 2021. Please respond to these fact-finding requests in a timely manner [CDLE, Employer Update, October 2022]. 

Colorado—New Unemployment Notice Issued by State Labor Department

The Colorado Department of Labor and Employment (CDLE) has issued a second version of the new Unemployment Notice that qualifying employers must provide to employees upon separation. Senate Bill 234 enacted this requirement. The CDLE issued a template for employers to use in September 2022. The second version of the form clarifies that employers do not have to provide both a hard copy and an electronic copy of the separation notice to the departing employee. The Notice says that employers are legally required to provide a form, in either a hard copy or electronic format, to an employee upon separation. 

Delaware—Updated W-2 and 1099 FAQs Note Form Change

The Delaware Division of Revenue has updated its frequently asked questions (FAQs) for Forms W-2 and 1099. Starting with the 2022 tax year, Delaware's Form W-3 will be replaced by form WTH-REC. Employers can file form WTH-REC (W-3) through the Delaware Taxpayer Portal. Bulk submitters are required to submit form Delaware Form WTH-REC (W-3) electronically. Bulk WTH-REC submission is available through the Delaware Taxpayer Portal. Changes to Delaware Code require that additional types of Forms 1099 be reported directly to Delaware. However, the Director of Revenue has waived the requirement until further notice. Encrypted files are not accepted. Compressed (ZIP) files are accepted for Forms W-2 and 1099 submissions, but each ZIP file must contain only one data file.  

Idaho—State Tax Commission Announces Hurricane Ian Disaster Relief

The Idaho State Tax Commission is extending deadlines to file and pay taxes for victims of Hurricane Ian. For taxpayers in Florida, the relief postpones tax deadlines that fall from September 23, 2022, through February 14, 2023. For taxpayers in South Carolina, the relief postpones tax deadlines that fall from September 25, 2022, through February 14, 2023. For taxpayers in North Carolina, the relief postpones tax deadlines that fall from September 28, 2022, through February 14, 2023. As a result, affected taxpayers will have until February 14, 2023, to file returns and pay taxes that were originally due during these periods. Idaho is following the extended deadline set by the Internal Revenue Service. The Idaho deadline extensions apply to all Idaho tax types, including income tax withholding. They apply to individuals and businesses in the disaster areas, as well as to those whose tax records are located there. Idaho is offering the relief to taxpayers located in any area that FEMA designates as qualifying for individual assistance. Affected taxpayers should write "HURRICANE IAN" in red ink at the top of their tax return to qualify for the extension. Electronic filers should send an email to and include the date the return was e-filed [Press Release: Idaho grants tax relief to victims of Hurricane Ian, Idaho State Tax Comm'n., 10/20/2022].

Illinois—Railway Company Ordered to Pay $228 Million to More Than 45K Truck Drivers for Privacy Violation

According to a Reuters News article, a jury has ordered freight railway giant BNSF Railway Co to pay $228 million to tens of thousands of truck drivers after finding the company collected the drivers' fingerprints without consent. The verdict followed after the first trial under the Illinois Biometric Information Privacy Act (BIPA), a state law that restricts the collection of biometric data like fingerprints or retinal scans. The class action was filed in 2019 by one driver, Richard Rogers, who said that BNSF required truck drivers to scan their fingerprints when picking up and dropping off loads at the company's Illinois facilities. The company said in a statement it believed the verdict "reflects a misunderstanding of key issues" and that it would appeal [Rogers v. BNSF Railway Company, DKTNo.: 1:19-cv-03083 (N.D. IL.), 10/12/22].

Indiana—State Income Tax Bulletin Updated Regarding Determination of Residence for Employment in A Foreign Country

The Indiana Department of Revenue has updated its income tax bulletin concerning the determination of residence for individuals leaving Indiana for employment in a foreign country. The bulletin clarifies that a person is domiciled in a state or other place until such time the person voluntarily takes affirmative action to become domiciled in another place, and it includes definitions for “permanent place of residence” and “domicile.” A list of factors indicating domicile is also included [Indiana Information Bulletin No. IT55, 10/01/2022].

Indiana—Determination of Residence of Individuals Leaving Indiana for Foreign Employment

The Indiana Department of Revenue (DOR) has revised Income Tax Information Bulletin No 55, Determination of Residence for Individuals Leaving Indiana for Employment in a Foreign Country, effective immediately. It replaces Bulletin No. 55, dated September 2001. The DOR explains that these bulletins provide nontechnical assistance to filers. In this instance, the bulletin briefly summarizes the responsibilities of an individual who is working in a foreign country but still maintains residency and domicile in Indiana. In addition to nonsubstantive technical changes, the DOR updated the bulletin to reflect updated guidance on domiciles and permanent places of residence found in the DOR's regulations, an update to the threshold amount for estimated payments, and an update to the extension period from 30 days to one month.

Maine—MRS Encourages Business Taxpayers to Sign Up for Training Webinars on New Tax Filing Portal

Maine Revenue Services encourages all business taxpayers to take advantage of webinars regarding the new tax portal. The webinars include such information as: (1) when you can begin using the Maine Tax Portal for your business; (2) new features that are making filing, payment, and management of state taxes faster and more convenient; (3) how to register a business for new businesses or first-time taxpayers); (4) how to create a login; and (5) how to set up account access between you and your business tax professional. Sessions regarding withholding taxes will be held Thursdays (either 10:00 to 11:30 am or 2:00 to 3:30 pm) on October 27, November 10, December 1, and December 15. Registration is available on the MRS website

Montana—2023 Withholding Tables Revised for Inflation

After several years of no updates to the Montana withholding tables, the Montana Department of Revenue (DOR) has released an updated Montana Employer and Information Agent Guide with Montana Withholding Tax Tables. The new tables reflect adjustments for inflation and notify employers that the DOR will no longer mail Withholding Tax Vouchers (Form MW-1). Employers must now either download a copy from or pay withholding taxes online using the TransAction Portal (TAP). The supplemental tax rate remains 6%. The 2023 exemption amount is $2,070, up from $1,900. 

Nebraska—State Revenue Department Corrects 2023 Percentage Method Tables

In an October 25, 2022 bulletin, the Nebraska Department of Revenue has said that it has updated the 2023 Nebraska Circular EN with corrections to Tables 6 and 7. The DOR issued the 2023 Circular EN last week, which is to replace the 2022 version. Table 6 of the income tax withholding percentage method is for the semi-annual payroll period, and Table 7 is for the annual payroll period. 

New Jersey—Wage Base for Unemployment and Disability Increasing for 2023

The New Jersey Department of Labor and Workforce Development has announced that the unemployment and disability wage base for employers will increase from $39,800 to $41,100 in 2023. The disability and family leave insurance taxable wage base for workers will increase from $151,900 to $156,800 in 2023. The announcement also includes the 2023 maximum weekly benefits for: (1) unemployment benefits: $830; (2) workers' compensation benefits: $1,099; and (3) temporary disability benefits: $1,025. Payments in kind for personal services, in lieu of, or in addition to, monetary wages, are, with certain exceptions, taxable wages for unemployment tax and disability benefit purposes. The dollar equivalents for certain payments during calendar year 2023 will be as follows: $276.60 ($267.90 in 2022) for weekly full room and board, $118.60 ($114.80 in 2022) for weekly lodging, and $31.60 ($30.60 in 2022) for three meals per day. Individual meals, if less than three meals per day, should be valued as follows: breakfast and lunch $9.50 ($9.20 in 2022), and dinner $12.60 ($12.20 in 2022).

New Mexico—Las Cruces Announces 2023 Minimum Wage

The City of Las Cruces has announced its minimum wage for 2023. Effective January 1, 2023, the minimum wage will increase to $12.00 per hour ($11.50 per hour in 2022). The minimum tipped wage will be $4.78 per hour ($4.60 per hour in 2022) for workers receiving more than $30 per month in tips. The poster required to be posted by employers is available in both English and Spanish on the City's website

New York—Judge Orders NYC to Return Unvaccinated Sanitation Workers to Their Positions with Back Pay

A Supreme Court of New York judge has sided with a group of sanitation workers who filed a lawsuit claiming that the Mayor's private employer's exemption order rendered the public employee vaccination policy arbitrary and capricious. The decision orders the city to return the workers to their jobs, with back pay. The judge said that while the Health Commissioner has authority to issue public health mandates, the Commissioner cannot create a new condition of employment for city employees, prevent an employee from reporting to work, terminate employees, or cannot exempt certain employees from these orders. The court noted that the employees were treated differently from private sector employers. Furthermore, both city employees and public sector employees were treated differently from artists, athletes, and performers. The decision has already been appealed [Garvey, et al. v. the City of New York, et al., N.Y. App. Div., Index No. 85163/2022, 10/25/2022].

New York—Law Requires NYC Employers Using AI to Proactively Ensure the System Has No Built-In Bias

A New York City law, effective January 1, 2023, will require that a bias audit be conducted on any automated employment decision tool (Artificial Intelligence or "AI") before it is implemented. Furthermore, candidates or employees that reside in the city must be notified about the use of AI in the assessment or evaluation for hire or promotion. They must also be advised about the job qualifications and characteristics that will be used by the automated employment decision tool. Violations will be subject to a civil penalty.

New York—Rules Have Been Proposed for NYC's Earn Safe and Sick Time Act

The New York City Department of Consumer and Worker Protection (DCWP) has released proposed rules pertaining to the city's Earned Safe and Sick Time Act. The DCWP proposes increasing the amount of paid sick leave available for some employees, eliminating the 120-day waiting period to use sick leave, and adding or clarifying various enforcement provisions. A public hearing on the proposed rules will be held on November 23, 2022. Those wishing to attend can also connect virtually via Zoom. Comments may be submitted on the Earned Safe and Sick Time Act proposed rules webpage, by email to, or by U.S. mail to DCWP, 42 Broadway, New York, NY 10004. Comments must be received by November 23, 2022. 

Ohio—Treatment of Forgiven Student Loan Debt

The Ohio Department of Taxation has announced that student loan debt that has been forgiven will not be taxed for tax year 2022. Ohio's income tax calculation begins with federal adjusted gross income, and Ohio law does not contain a specific provision to tax student loan debt that has been forgiven. Therefore, such amounts will only be taxed by Ohio if they are required by federal law to be included in federal adjusted gross income (AGI). The American Rescue Plan Act of 2021 (P.L. 117-2) excluded debt forgiveness of student loans granted in 2021 through 2025 from the calculation of federal AGI, and since the forgiven debt is not included in federal AGI and Ohio does not specifically require these amounts be added in calculating Ohio AGI, these amounts are not taxed by Ohio [Forgiven Student Loan Debt, Ohio Dept. Tax'n, 10/2022].

Oregon—Oregon and Washington Provide Joint Guidance on Paid Family Leave

The Oregon Paid Leave program begins on Jan. 1, 2023, and employers have expressed concerns about how to properly handle paid leave for remote workers residing out of state or employees working across state lines. To help address some of these questions, the Oregon Employment Department and the Washington Employment Security Department recently released a joint letter providing guidance. The guidance explains that both states consider the "place of performance" to be a key issue. The letter addresses such issues as what happens if the work is "performed" regularly in two different states, and provides answers through instructional scenarios. More information is available about the Oregon paid leave program at Paid Leave Oregon

Vermont—Minimum Wage Increases to $13.18 per Hour for 2023

The Vermont Department of Labor has announced that the state minimum wage rate will increase from $12.55 per hour to $13.18 per hour, beginning January 1, 2023. The cash minimum wage for tipped workers will increase from $6.27 per hour to $6.59 per hour in 2023. A tipped worker is an employee that earns more than $120 per month in tips.

Washington—Washington and Oregon Provide Joint Guidance on Paid Family Leave

Employers have expressed concerns about how to properly handle paid leave for remote workers residing out of state or employees working across state lines. To help address some of these questions, the Oregon Employment Department and the Washington Employment Security Department recently released a joint letter providing guidance. The guidance explains that both states consider the "place of performance" to be a key issue. The letter addresses such issues as what happens if the work is "performed" regularly in two different states, and provides answers through instructional scenarios. More information is available about the Washington paid leave program at Paid Leave Washington

Washington—ESD Announces 2023 Paid Family & Medical Leave Premiums

The Washington Paid Family & Medical Leave has announced beginning Jan. 1, 2023, the premium rate will increase, and the split of the employer and employee share of the premium rates will also change in 2023. Starting Jan. 1, 2023, the premium rate will be 0.8% of each employee’s gross wages, not including tips, up to the 2023 Social Security cap ($160,200). Employers will pay 27.24% of the total premium, and employees will pay about 72.76%. Employers with fewer than 50 employees are not required to pay the employer share of the premium. However, these employers must withhold and remit the employees' share of premiums. Employers must update calculations and withhold the new 0.8% rate starting in January or may be responsible for the difference during quarterly reporting. Employers are prohibited from retroactively withholding premiums. The 2023 premium calculator and additional reporting information for employers will be released in November 2022. 

Wisconsin—State Revenue Department Updates Withholding Tables, E-Filing Guide, and Wage Statement and Information Return Publication

The Wisconsin Department of Revenue (DOR) has updated its withholding tax guide (Publication W-166), which is effective for withholding periods beginning on or after January 1, 2022. The guide is amended to reflect that the current withholding rates will continue for 2023. Also, the DOR has updated Publication 172 (Annual W-2, 1099-R, 1099-MISC, 1099-K, & W-2G Electronic Reporting), which provides the specifications and instructions for reporting state wages, withholding, and information other than wages to the DOR electronically. The publication now includes a discussion about Wisconsin requirements for filing Form 1099-K. If the payer voluntarily withholds any amount of Wisconsin income tax, then the payer is required to file Form 1099-K directly with the DOR and provide a copy to the payee by January 31 following the calendar year. Form 1099-K can be filed directly with the DOR via the Data File Transfer webpage. In addition, Publication 117 (Guide to Wisconsin Wage Statements and Information Returns) has been updated. The publication is used to prepare 2022 wage statements (Form W-2) and information returns (Forms W-2G, 1099-MISC, 1099-NEC, 1099-R, 9b, etc.) to be filed in 2023. The publication now indicates that the only electronic filing options for Form 1099-K with Wisconsin withholding are approved payroll software, and an IRS formatted file that is in the format provided in IRS Publication 1220 [Wisconsin Dept. Rev. Tax Publication No. W-166, 10/01/2022; Wisconsin Dept. Rev. Tax Publication No. 172, 10/01/2022; Wisconsin Dept. Rev. Tax Publication No. 117, 10/01/2022].


About Proliant

Proliant puts the human in human resources. We provide a fully integrated, cloud-based HCM solution that simplifies payroll and HR processes. The company serves small to large clients in multiple industries in all 50 states and is committed to providing the highest quality customer service in the industry.

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