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Year End Seminar 2015
Communicating with CPI-HR – You always have options
Phone TreeAbility to hold for specific CSR
Ability to contact with next available CSR
EmailAlways email any communication to [email protected]
Payroll Processing Times Phone, Fax, Email clients – data in by 12:00 p.m. EST
Client Processing complete by 3:00 p.m. EST
Go Green!
Save shipping costs and eliminate shipping concerns by encouraging Direct Deposit/Pay Cards (ask your CSR for more information regarding rapid! PayCards.)
More secure handling of your information
Quarterly Reports Returns are sent via electronic link through Sharefile (secure encrypted site)
Contact your Support Representative for ways we can save your organization time and money!
Wage and Hour Posters
Many states have updated Minimum Wage Rates
Options includeFederal Only
State Only
Federal & State
1 Year Auto-comply service
Contact your CSR to Purchase new posters!
SSAE 16 SOC 1 Type 2 Certification
SSAE 16 SOC 1 Type 2 Completed Audit in Summer 2015
Covers the period of June 1, 2014 through May 31, 2015
Next Audit will be conducted Summer 2016
Contact your Support Representative for a copy if needed
Our technology partner also has SSAE 16 SOC 1 Type 2
certification
Duplicate W-2 Forms
W-2 Duplicate Request FormTo be completed by EE requesting duplicate before one will be issued.
Mark duplicate W-2’s as “Reissued Statement”
Nominal administrative fee can be charged to employeesCPI-HR charges $5.95 for a reprinted W2. This charge is to cover the administrative costs incurred. The client may choose to pass that fee on to the employee.
2016 Government Regulations
Base Limit Tax Rate
2015 2016 2015 2016Social Security $118,500 $118,500 6.2% 6.2%
Medicare Tax Unlimited Unlimited 1.45% 1.45%
Medicare Hi Tax Rate Only Wages exceeding $200,000
Only Wages exceeding $200,000
1.45% for first $200,000, then 2.35% for the balance
1.45% for first $200,000, then 2.35% for the balance
Federal Unemployment $ 7,000 $7,000 Net = 0.6% (6.0% with state credit of 5.4%)
Net = 0.6% (6.0% with state credit of 5.4%)
401(k)/403(b) /457&
Catch Up
Annual Comp Limits
$18,000
$6,000
$265,000
$18,000
$6,000
$265,000
2015 Government Regulations
2015 2016Mileage
- Standard
- Medical or Moving
$0.575
$0.23
TBD
High Deductible Health Plan (HDHP) Limits
- Minimum Deductible
- Maximum Out of PocketSingle - $1300; Family - $2600
Single - $6450; Family - $12,900
Single - $1300; Family - $2600
Single - $6550; Family - $13,100
FSA Health Plan Changes Contributions limited to $2500/year/employee; husband and wife can each elect $2500/year; Over the counter medications no longer applicable
Contributions limited to $2550/year/employee; husband and wife can each elect $2500/year; Over the counter medications no longer applicable
HSA Contribution Limits Single - $3350
Family - $6650
Catch-up Contributions – $1000
Single - $3350
Family - $6750
Catch-up Contributions – $1000
The Affordable Care Act Reporting the cost of employer-provided health care coverage on Forms W-2 in box 12, code “DD”; The amount recorded in 12 DD is NOT TAXABLE
2013 Mandatory for employers that file 250 or more W-2 forms (i.e. forms filed in January 2014)
Not required to report this info for anyone whom you are not required to issue a W-2 form (i.e. retirees, surviving spouses, etc.)Reporting needs to include both the portion paid by the employer and the portion paid by the employeeCost of employer-sponsored health coverage (if such cost is provided by the employer). The reporting in Box 12, using Code DD, of the cost of employer-sponsored health coverage is for the employee’s information only. The amount reported with Code DD is not taxable
Legislative Updates
State Child Support/Garnishment Updates
New Office of Child Support Enforcement (OCSE) website. www.acf.hhs.gov/programs/cse/newhire/employer/contacts/iw_matrix.pdf
This website contains a great deal of information on Child Support issues, including
Bonus/Lump Sum ReportingContact and Program Information for EmployersElectronic PaymentsIncome WithholdingMedical SupportNew Hire ReportingLinks to all State AgenciesLinks to all Tribal AgenciesChild Support Portal
Social Security Numbers
Invalid formats111-11-1111; 333-33-3333 ;123-45-6789000,666, 900-999 as the first three digitsGreater than 900 as the first three digits 00 as the fourth and fifth digits, or 0000 as the last 4 digits. 900-999 are generally not used
Numbers that appear incorrect should be verified with the Social Security Administration at 1-800-772-6270 or at www.socialsecurity.gov/bso/bsowelcome.html
Penalties – Up to $50 per incorrect Social Security number on W-2
NAICS/SIC CODES
The North American Industry Classification System (NAICS) is the standard used for auditing purposes.
Please provide these codes to your CSR by January 31, 2016.
Codes can be found on your corporate tax return or you can obtain them from your accounting department.
CPI-HR Year End Procedures 2015
Items to Consider Prior to Year End
Advise Employees to verify the accuracy of address and social security information before end of December.
Taxable fringe benefits to be included in 2015 W-2 Income
Bonus runs
Third Party Sick Pay
W-2 Pension Plan Indicators
Gather 1099 information
Approve calendars for next year
Confirm Tax Identification Numbers and Rates for 2016
Taxable Fringe Benefits
Moving expenses
Personal use of company cars
Group Term Life insurance
Awards and prizes
Gifts and / or gift certificates
Educational assistance
Any other items that may have been paid through Accounts Payable during the year
Bonus or other taxable fringe benefits
Notify CPI-HR to arrange for additional pay calendar to be setup at the supplemental rate. This can be done early so it’s ready when you are!
The last date to run any 2015 reportable compensation is end of business on Wednesday December 30th , 2015
Anything processed after December 31, 2015 may require W-2c’s and amended tax returns to be completed and a processing charge.
Third Party Sick Pay
Deadline for Third Party Agents to provide this information to you is Friday, January 15th, 2016.
Send Third Party Sick Pay information to CPI-HR as soon as you receive it – no need to wait until year end!
Please notify CPI-HR by Friday, December 18, 2015 if you will have Third Party Sick Pay to report for 2015!
Late notification may result in W-2c’s needing to be produced and amended tax returns to be completed and a processing charge.
Ensure you are sending the Statements of payments made.
Confirm with CPI-HR whether or not your provider will be preparing the W-2 with the benefit or should CPI-HR be including it.
Retirement/Pension Box on W-2
Contact your Retirement/Pension Plan Administrator to determine if the Pension Box needs to be marked on your employees W-2’s.
If it needs to be marked, provide your Support Representative a list that includes employee name, employee number and then Y for eligible and N for ineligible. Please provide the information by Friday, December 18th.
1099s
If you want CPI-HR to produce your 1099s:
Notify us no later than Friday December 18, 2015 if you want us to produce and submit your 1099’s.
Notify your CSR with the names, addresses, and social security numbers/federal id’s
CPI-HR does not produce a 1096 Reconciliation Form for your 1099’s
Contact your CSR as soon as possible to notify us that you want us to produce your 1099’s and for direction on how to enter this information in the payroll system.
CPI-HR 2015 – 2016 Calendar
This calendar can also be found, in a print-ready format, on the login page of the CPI-HR websitehttp://cpihr.com/prannouncement5.php
2016 Payroll Processing Calendars
Review your 2016 calendars to ensure payroll is processed at least two days before the check date: (Late processing fees may apply)
Holidays
Banking Holidays
Company Holidays
CPI-HR Holidays
Your Vacation
Special Payrolls (i.e. bonus runs)
Calendar sign-off is due to your Support Representative by Friday, December 18, 2015.
REVIEW YOUR CALENDARS CAREFULLY!!
Calendars
To Approve Your Calendar
Fax or email Calendar changes to CPI-HR
by Friday, December 18, 2015
Fax or email Calendar Approval Form to CPI-HR
by Wednesday, December 23, 2014
Payroll Calendar Approval
Changes to your calendar must be sent to your CSR no later than Friday, December 18, 2015.
Approved calendars must be signed and returned to your CSR by Wednesday, December 23, 2015.
W-2 Audit Reports
To run this report, go to Reporting, Payroll and run the PAY00709 report. Please contact your CSR if you need assistance.
Box 1 – Reportable Comp = Federal Taxable Income
Box 3 – FICA Taxable Wages (typically gross wages less pre-tax deductions); capped at $118,500 for 2015
Box 4 – FICA Tax Withheld = Box 3 x 6.2% ($7347.00 max) Box 5 – FHI Wages & Tips (typically gross wages plus tips less pre-tax deductions); no limit on FHI taxable wages
Box 6 – FHI Tax Withheld = Box 5 x 1.45%
Box 10 – Dependent Care contributions
Box 12 – 401(k) contributions, 403(b) contributions, HSA contributions
W-2 Audit Reports
Box 12 DD – check this box for Employer and Employee benefit costs – required for those with 250 or more W-2’s per Fed ID.
Box 14 – Total of pre-tax deductions from employee checks, not including 401(k), 403(b), etc.
State Wages – Same amount as Box 1 (in Ohio)
Local Wages – Typically, same as Box 5
Local Taxes – Local taxable wages x local tax rate
Please contact your Support Representative with any questions.
REVIEW AND APPROVE YOUR W-2 AUDIT REPORT NO LATER THAN FRIDAY DECEMBER 18, 2015 BY SIGNING AND DATING PAGE 1 OF YOUR REPORT; THEN EMAIL TO YOUR SUPPORT REPRESENATIVE
PAY00709 SAMPLE REPORT
CPI-HR Year End Procedures
What to expect:W-2 printing will begin Tuesday, January 5, 2016 unless we have been notified of Third Party Sick Pay by December 18, 2015
All W-2’s will be stuffed and sealed unless notified of alternate request
Alternate process requests must be provided to CPI-HR by December 18, 2015
W-2’s will be shipped to client’s office no later than Tuesday January 26, 2016
For those who signed up for the ACA Reporting, those reports will be shipped with the W-2’s.
NOTE: Online W-2 forms are for REPRINTS only. These will not post until February 1st each year.
W-2 Distribution
Hand-deliver to your Employees
Any W-2 that cannot be personally delivered to an employee should be placed in metered mail no later than January 31st.
Before mailing, verify that the W-2s have the most current address printed on them.
If you find one with an incorrect address or without an address, you can type this on a label and affix it to the W-2. Do not write or type directly on a W-2.
CPI-HR Year End Procedures
What to look for:Accurate employee name and address (consider paycheck note)Accurate Social Security numbersBox 12 populated with 401(k); 403(b); HSA contributions Box 12 DD populated with employer and employee benefit contributionsBox 14 populated with other pre-tax deductions (i.e. medical, dental, etc)Accurate state and local withholding information for each employee
TIP: Gross wages = Box 1 + Box 10 + Box 12 + Box 14 (less any PUCC which is in both box 1 and box 14)
Notify CPI-HR as soon as possible with any discrepancies
2015 State Unemployment Notices
Forward to CPI-HR as soon as received – no later than
January 15, 2016 for appropriate states
June 30, 2016 for New Jersey
Email [email protected] or
Fax to 440-542-7801
Benefit Information for Future Tax Info
In 2016 you are still required on the W-2’s to report the value of Employer Health Coverage
Do we have your Benefit Details Setup to track both Employee and Employer cost of health insurance?
If yes, then you don’t need to do anything. Our technology will take care of the proper reporting of the ER cost of Health Insurance in Box 12 DD
If no, then you should contact your Support Representative in December to get these setup for you. To do so, we will need:
Copy of your latest Health Coverage Carrier Invoice
Spreadsheet showing the following:
Benefit Information for 2015 W-2 Reporting Requirements
2015 will require your W-2’s to report the value of Employer Health Coverage (Example Below)
Coverage Level
Total Monthly Premium
Employer Monthly Cost
Employee Monthly cost
Employee 500.00 300.00 200.00
EE + Spouse
EE + Child(ren)
Family
Recap of Important Year End Dates
December 18th Submit 2015 Payroll Calendar change requestsNotify your Support Representative if you want CPI-HR to generate 1099’s or have 3 rd Party Sick Pay that you will be reporting Contact your Support Representative regarding setup of Benefit Records (if not already setup) in preparation for 2015 W-2 Reporting Requirements, if you have 250 or more W-2’sNotify us if you need a Bonus Calendar setup and some/or all deductions stopped (FSA; HSA, etc.)Notify Support Representative of any end of year special earnings (i.e. Personal Use of Company Car, Fringe Benefits, etc.)Notify of alternate W-2 instructions, if applicable
December 23rd
Confirm final approval of 2016 CalendarNotify all Employees of W-4 requirementsNotify Support Representative of any employees that need pension plan updatedApprove your W-2 Audit Report by signing and dating last page of the form and email or fax to your Support Representative
Important Year End Dates
January 20165th
W-2 Printing Begins for those who do not have Third Party Sick Pay
15thDeadline to submit Third Party Sick Pay InformationApprove your Tax Profile Report by signing and dating the appropriate page of the form and email or fax to your Support Representative
26th All W-2’s have been printed and shippedQuarterly Tax Packages will be sent to all clients by this date via electronic process
31stOnline copies of W-2’s are available for employees through ESS ServiceAll Appropriate 4th Quarter/Annual Reconciliations have been filed with all agencies
Health Care Reform
Employer “Play or Pay” Mandate
Beginning in 2015, employers with 100 or more full time employees or full time equivalents (FTE) are required to offer “minimum essential coverage” to at least 70% of their FTEs (and their children under age 26) that is “affordable” and that meets “minimum value standards” (MVS) in order to avoid a penalty.
A full-time employee is one who works an average of 30+ hours per weekAffordable coverage means that the employee cost sharing for employee-only coverage is less than 9.5% of the employee’s W-2 (box 1) earnings, rate of pay or the Federal Poverty LevelMinimum value means that the health plan pays at least 60% of covered expenses
In 2016, employers with 50 or more FTEs must offer affordable coverage that meets MVS to at least 95% of their FTEs to avoid a penalty
Health Care Reform
Employer “Play or Pay” Mandate
In 2015, the penalty for companies with 100 or more FTEs that do not offer MEC to at least 70% of FTEs is $2,000 per year for each FTE (less the first 80).
If a company offers MEC that is either not “affordable” or does not meet MVS, the penalty is the lesser of $3,000 per year for each FTE receiving a federal subsidy for Exchange coverage OR $2,000 per year for each FTE.
In 2016, the penalty for companies with 50 or more FTEs that do not offer MEC to at least 95% of FTEs is $2,000 per year for each FTE (less the first 30).
For 2015, employers with 50-99 FTEs will need to certify that they are not reducing the size of their workforce to stay below 100 employees.
Health Care Reform
Variable Hour Tracking
Under the ACA, any employee who works over an average 30 hours per week or 130 hours per month, is considered to be an FTE
An employee is defined as “variable hour” if the employer “cannot determine whether the employee is reasonably expected to be employed on average at least 30 hours of service per week during the initial measurement period because the employee’s hours are variable or otherwise uncertain.”
Health Care Reform
Variable Hour Tracking
Standard Measurement PeriodA defined period lasting between 3 and 12 monthsEmployee who averaged at least 30 hours per week during the Standard
Measurement Period must be treated as a full-time employee during a subsequent Stability Period
Administrative PeriodPeriod of up to 90 daysUsed by employers to notify and enroll employees
Stability PeriodThe period of time in which a “full-time” or “not full-time” status is
established during the Standard Measurement Period appliesFor full-time employees, the Stability Period must be at least 6
consecutive calendar months and no shorter than the Standard Measurement Period
Health Care Reform
Variable Hour Tracking
Not Applicable Look-Back Admin Stability Period
Look-Back Admin Stability Period
Look-Back Admin Stability Period
2013 2014 2015
3 Month Look-Back
Not Applicable Look-Back Admin Stability Period
Look-Back Admin Stability Period
2013 2014 2015
6 Month Look-Back
Look-Back Admin Stability Period
Admin
2013 2014 2015
12 Month Look-Back
Look-Back
Health Care Reform
IRS Reporting RequirementsNew ACA employer and insurer reporting requirements began in the 2015 calendar year to assist with the enforcement of the individual mandate and the employer mandateAll employers with more than 50 full-time equivalent (FTE) employees and all employers that are self-funded will need to comply with IRS recordkeeping and reporting requirementsIRS 6055 will enforce minimum essential coverage for the individual mandate and IRS 6056 will enforce employer shared responsibility requirements around the employer mandate
Health Care Reform
IRS Reporting Requirements
Filings are due in 2016 for the 2015 calendar yearEmployers must file by February 28th if filing by paper or March 31st if filing electronicallyElectronic filing is required if the employer files 250 or more returnsEmployers are required to prepare a statement for each employee that must be provided to each employee by January 31st Employees may receive the information electronically by consent
Health Care Reform
SECTION 6055 REPORTING
Any person that provides MEC coverage to an individual during a calendar year must file Forms 1094‐B (a transmittal) and 1095‐B (an information return), including:
Health insurance issuers or carriers;
Self‐insured health plan sponsors;
Government agencies that administer government‐sponsored health insurance program
Any other entity that provides MEC.
Health Care Reform
SECTION 6055 REPORTING
Self‐insured plan sponsors that are also over 50 FTE will report information about the coverage in Part III of Form 1095‐C, instead of on Form 1095‐B.
An employer that sponsors an insured health plan will not report as a provider of health coverage under section 6055. The health insurance issuer or carrier is responsible for reporting that health coverage.
Health Care Reform
1095-B and 1095-C Forms
1095-B forms are filed by insurers/plan sponsors for: employers who use the SHOP, small self-funded groups, and individuals who get covered outside of the health insurance Marketplace.
1095-C forms are filed by large employers. If you are self-funded, you just fill out all sections of 1095-C. If you are fully insured, you get a 1095-B from the insurer and fill out Sections I and II of 1095-C.
Health Care Reform
SECTION 6056 REPORTING
All groups with 50 FTE must file Form 1094‐C (a transmittal) and Form 1095‐C (an information return) for each full‐time employee.
Form 1094‐C is used to report summary information for each employer to the IRS and to transmit Forms 1095‐C to the IRS.
Health Care Reform
Code 6056 Reporting Forms
Form 1094-C (transmittal to IRS)
Filed with the IRS by February 28 (March 31 if filing electronically)
Form 1095-C (an employee statement)Provided to full-time employees by January 31
Fully-insured plans: Employer only completes top half of the form
Self-insured plans: Employer completes both sections to satisfy its Code 6055 and 6056 reporting requirements
Electronic delivery is permissible with employee’s consent
Health Care Reform
Effective 2015: Reporting will be 1Q 2016
General Reporting: large employers must report with respect to each full-time employee. Each return must show:
Employer name, address, and Tax ID
Name and phone number of employer’s contact person
Calendar year for which the information is reported
Whether employer provided MEC to full-time EEs and their dependents
Months minimum essential coverage was available
Each FT EE’s monthly cost for EE-only, minimum value plan
# of FT EEs for each month
Name, address, and tax ID of each FT EE during the year and the months EE was covered
Any other information specified in forms, instructions, or published guidance
Health Care ReformReporting Enrollment Information for Nonemployees
This option applies only for 50 FTE groups offering self‐insured health coverage for any individual who enrolled in the coverage for one or more calendar months of the year, but was not an employee for any calendar month of the year, such as:
A nonemployee director
A retired employee who retired in a previous year
A terminated employee receiving COBRA coverage who terminated employment during a previous year
A nonemployee COBRA beneficiary.
Health Care Reform
2018 Cadillac Tax
The Cadillac Tax is a 40% excise tax on insurers of employer sponsored health plans with aggregate values that exceed $10,200 for singles and $27,500 for families
This tax applies to all group plans, including self-funded plans
Health Care Reform
2018 Cadillac Tax
Cost of coverage is determined by applicable COBRA premiums
FSA coverage includes both employee & employer contributionsHSA Coverage includes employer & salary reducing employee contributions
Employee’s excess benefit = sum of monthly excess amounts for taxable period
Single coverage excess amount is anything over $850/monthFamilies coverage excess amount is anything over $2,291/month
Assuming a 15% per year increase in medical insurance coverage, if the Cadillac tax went live in an earlier year, these dollar amounts per month would exceed the limit:
Single Premium:2018 - $850.002017 - $739.132016 - $642.722015 - $558.89
Family Premium:2018 - $2,291.002017 - $1,992.172016 - $1,732.332015 - $1506.37
Single: $850/(1.15n)Family: $2,291/(1.15n)n = # of years away from 2018
Health Care Reform
2018 Cadillac Tax
