Futa Tax Increase for 2012

States that have borrowed money from the federal government to pay their obligations in unemployment and have not yet repaid the money have caused the employers in their states to pay a surcharge. This surcharge was in effect last year for 22 states, this year it's in effect for only 18 states BUT the amount of the surcharge is much higher since it's the second year or even third year for some states. The tax is called Futa Credit reductions. States with an credit reduction of 0.3% (additional $21.00 per ee) include AZ, DE and VT. States with a 0.6% credit reduction i.e. for each employee who earned $7000. per year an additional $42.00 per employee will be owed in the following states, AK, CA, CT, FL, GA, KY, MO, NV, NJ, NY, NC, OH, RI,  and WI. Indiana will have to pay 0.9% since they haven't paid back in 4 years.

NYS MTA Commuter Tax declared unconstitutional

New York's Metropolitan Transportation Authority could lose $1.5 billion of revenue a year after a state court ruled on August 12th that a payroll tax was unconstitutional, partly because it applies to only 12 counties in the state. 

By limiting the tax to Nassau County, New York City, and the ring of suburban counties that lie north of the city, including Dutchess County, the legislature signaled that it was not "a substantial state concern" but instead a special law, Judge Bruce Cozzens, a state Supreme Court judge in Nassau County, said in his ruling.

The legislature was required to enact the law with a home-rule message or with a message of necessity, which requires two-thirds of the Senate and Assembly to approve the measure, Cozzens said. By failing to meet either condition, the legislature enacted the law unconstitutionally, he concluded.

NYS advises all employers to continuing paying this tax as they are appealing this ruling and noted that they have successfully defended the tax 4 other times.

Social Security number unencrypted

Effective Dec. 12, 2012, employers generally cannot require anyone to disclose or provide their unencrypted Social Security number or any portion of it. These restrictions do not apply if employers request the numbers for employment-related purposes. Getting tough out there, don't go it alone.

Supreme Court Upholds Patient Protection Care Act

The Supreme Court upholds Patient Protect and Affordable Care Act.
Starting in 2013 there will be an addition 0.9% in medicare taxes on all employees making in excess of $200,000. or $250,000 for married filing jointly. No employer match on it. Also in 2013 the aggregate cost of employer sponsored group health coverage must be reported on the employee's w-2. Health flexible spending accounts will be limited to $2500., this will be the death toll for them. Not enough of a savings for the employer to bother with them.

Metropolitan Commuter Transportation Tax (MTA) in the 12 counties closest to NYC

The MCTMT was imposed on certain employers in NYS within the Metropolitan Commuter Transportation District of NYS, this includes the 5 counties of NYC and 7 surrounding counties.
Effective 4/1/2012 this tax has been eliminated for any company with payroll expense of less than $312,500. per quarter, this is up from a thresshold of $2500. From $312,500. to $375,000 it's a lesser rate of .11%. From $375,000. to 437,500. the rate is .23% and from $437,500. it's the full .34%.
In additional all eligible educational institutions are no longer subject to this tax at all. This includes private and public schools.
No return is due if an employer is not subject to that tax during that quarter.

Extra FUTA Tax Due For Employers in Many States

Under the Federal Unemployment Tax Act (FUTA), typically employers pay an annual FUTA tax rate of only 0.6% because the 6.0% tax rate is offset by a federal credit of 5.4%. (The tax was 6.2% for a net tax of 0.8% previously; but the 0.2% surtax passed by Congress in 1976 finally expired June 30, 2011). However, by law, after a state has had an outstanding Title XII loan balance for two consecutive years on January 1, employers in that state face a 0.30% reduction in the FUTA credit if the loan is not paid back by November 10 of that same year. In 2010, three states had outstanding balances for more than two years that could not be paid back by the November deadline. Indiana, Michigan and South Carolina employers saw their FUTA tax rate go up by 0.3% retroactive to January of 2010 because of the credit reduction.

•     Nineteen new states will have a credit reduction of 0.3%: Arkansas, California, Connecticut, Florida, Georgia, Illinois, Kentucky, Minnesota, Missouri, North Carolina, New Jersey, Nevada, New York, Ohio, Pennsylvania, Rhode Island, Virginia, Virgin Islands and Wisconsin.
  
•     Michigan will have a total credit reduction of 0.9% (0.6% in 2010)

Social Security Wage Base Increases For 2012

The wage base increases to $110,100. that is up from $106,800. for 2012. This is the first increase since 2009. In other words the maximum you still pay 6.2% social secuirty on is $110,100. The 1.45% medicare tax is paid without any limit on all taxable earnings.
For people receiving social security benefits there will be a 3.6% cost of living increase for benefits and coverage.