Group- term life insurance provided to Former employees

Former employee group-term life is wages

There would be a monthly value over $50,000 to be reported on Form W-2 if an ex-employee continues to receive group-term life insurance.

FICA withholding is not required

It is not required for a person to have a withholding of Social Security tax and Medicare tax at about 1.45% only if the person declares unwithheld codes M and N, tax in box 12 and in Form W-2.

Erroneous and improper completion of box 12 may turn in to audit.

It is the exemption that FICA withholding is not necessary. Hence, not able to also report the group-term life value of over $50,000 in Form W-2, code C and box 12 triggers an IRS audit flag.

 

State and local income tax

Six key developments to note for 2015-2016

 

West Virginia

To be followed in 2016, all employees under the City of Morgantown and West Virginia are subjected to a service fee of $3 per week to a maximum of $156 per year.

 

Ohio (Sub. H.B.5)

To be followed in 2016, the de minimis threshold for non-residential local income tax withholding is raised from 12 to 20 days. The condition works only to the employers that have establishments or offices within the state of Ohio.

 

Indiana (Public Law 243)

To be followed in 2017, merging the three local income tax rates (CEDIT, COIT, CAGIT) into one, but raises tax that non-residents pay.

 

Maryland (Maryland v. Wynne)

In 2015, the US Supreme Court stated that Maryland’s law on disallowing a tax credit in contrast to local income taxes for tax paid in other places is non-essential. The ruling would be of influence to all local tax laws with similar constraints.

 

District of Columbia

Under the Act 21-99 that is approved by the District Council on July 9 2015 and following a Congressional 30-day review time, non-resident income tax is effective if the income comes from within the District and follows either: (1) Derived form District local funds (2) is paid to professional athletes.

Nevada

Effective in the 1^st of July 2015, SB 483 makes the following amendments to the Modified Business Tax (MBT)

• Mining employers are subject to the same MBT same as financial institutions

• The MBT is set on businesses other than a financial association and mining establishment at hte rate at about 475% (coming from 1.17%) of the sum of all wages paid by the business each calendar quarter that go beyond $50,000.