W2 & 1099 Form Updates

Now that the summer is approaching an end we thought we would alert you to some recent changes and will post updates as we get them.

Effective December 1, 2016 the new Department of Labor rules take effect for the salary minimum wage increasing to $47,476. Pay plans should be reviewed for compliance and to minimize employer cost increases.

The filing of W-2 forms must be filed no later than January 31, 2017. This applies to paper filed or electronically filed W-2 forms. This is a change from prior years when the filing date was February 28 for paper W-2 forms and later for electronic filing. Penalties for failing to timely file W-2 forms can be substantial.

Form 1099-MISC filed for non-employee compensation, box 7, must be filed no later than January 31, 2017 as well. Any other boxes used on the form can be filed by February 28, 2017, as in the past. Again penalties can be assessed for late filing.

With the above changes it will be more important to make sure all payroll records are current and timely to meet the changed deadlines. Reviewing vendor information and having W-9 forms on file will help expedite preparation and filing of 1099-MISC forms.

We want to alert you to Question 2 on the Maine referendums this voting cycle in November. The question provides for a 3% surtax on income over $200,000. This measure, if passed, will most likely take effect in 2017. This will make the top marginal rate in Maine 10.15%. This would be one of the highest tax rates in the country. Tax planning will be more important with this change.