Payroll Changes For Second Quarter 2023
Jul 19, 2023
Nevada Becomes First State to Enact Earned Wage Access Law
What Is Earned Wage Access (EWA)?
Earned wage access is the ability for employees to access wages they have earned outside the regular pay cycle. It's also sometimes referred to as early, instant, or on-demand pay. Employees can access their earned wages before their employer-designated payday. It is typically provided to employers by an outside service or as part of their payroll service.
Nevada's New Legislation
The law requires providers of EWA products to obtain a license from the Nevada Commissioner of Financial Institutions. The law specifies that EWA products are not loans or money transmissions under Nevada law and are not subject to Nevada's existing laws governing those products.
Effective Dates
Most provisions of the law will take effect on July 1, 2024. The law became effective June 13, 2023, to adopt regulations and perform other administrative tasks necessary to implement the legislation.
A person engaged in providing EWA services as of January 1, 2023, can continue to do so without obtaining a license until December 31, 2024, if the person submits an application for a license before January 1, 2024.
More States May Follow
Several other states are considering EWA bills, including California, Georgia, Kansas, Mississippi, Missouri, New York, North Carolina, Texas, Vermont, and Virginia.
Story sourced from Consumer Financial Services Law Monitor.
Arkansas Issue Revised Withholding Tables
The Arkansas Department of Finance and Administration (Department) has issued revised income tax withholding instructions reflecting the reduction in the top marginal tax rate enacted under SB 549 earlier this year.
The supplemental withholding rate, the highest marginal tax rate, changed from 4.9% to 4.7%.
The following updated withholding formula and tax tables are effective June 1, 2023:
As previously reported (Tax Alert 2023-0779), on April 10, 2023, Arkansas Governor Sarah Huckabee Sanders signed into law SB 549, which, retroactive to January 1, 2023, lowers the top marginal personal income tax rate from 4.9% to 4.7%.
This is Arkansas's second consecutive year retroactively lowered the top marginal income tax rate.
The Law Lowers Form W-2 Electronic Filing Threshold
On April 11, 2023, Governor Sanders signed into law SB 434, which, effective January 1, 2024, lowers the threshold for the requirement to file Arkansas Forms W-2 electronically from 250 employees to 125. The Department will waive the requirement to file electronically if the employer can show undue hardship.
Story sourced from Earnst & Young Tax news.
North Dakota Issue Revised Withholding Tables
North Dakota updated its 2023 withholding methods following an income tax cut passed by the state's legislature but is not requiring employers to implement the midyear change, the state tax commissioner's office said June 13.
Effective for wages paid on or after January 1, 2023, the North Dakota State Tax Commission has issued revised wage bracket and percentage method withholding tables. The revisions are due to legislation that reduced the number of personal income tax brackets and lowered personal income tax rates. The tables should be used going forward. The supplemental wage tax rate remains 1.84% [North Dakota Income Tax Withholding Rates and Instructions, rev. May 2023].
Story sourced from Bloomberg Tax and PayrollOrg
Florida Requires Certain Private Employers to Use E-Verify Beginning July 1
A new law in Florida is set to impact private employers significantly, making it mandatory for those with at least 25 employees to utilize E-Verify as part of their onboarding process by July 1, 2023. As a result, impacted employers have mere weeks to establish policies and procedures to comply.
Effective July 1, 2023, private employers in Florida with 25 or more employees must use the E-Verify system to verify a new employee's employment eligibility within three business days after the first day that the new employee begins working for pay.
Currently, all private employers in Florida must use E-Verify or Form I-9 to verify employment eligibility for new hires, and all public employers in Florida are required to use E-Verify.
Report on Unemployment Insurance Returns
Employers required to use E-Verify must certify on their first unemployment insurance (UI) tax return of each calendar year that it complies with state law when making UI contributions or reimbursing the state's UI system.
Penalties
Effective July 1, 2024, if the Florida Department of Economic Opportunity (DEO) determines that an employer failed to use the E-Verify system as required, the DEO must notify the employer and give the employer 30 days to comply. If the DEO determines that an employer failed to use the E-Verify system three times in a 24-month period, the DEO must impose a fine of $1,000 per day until the employer provides proof of compliance.
Story sourced from PayrollOrg and Forbes
Idaho Revises Withholding Tables, No Retroactive Withholding
Effective for wages paid on or after January 1, 2023, the Idaho State Tax Commission (STC) has issued revised wage bracket and percentage method withholding tables. The revised tables are due to legislation that lowered personal income tax rates and decreased the number of tax brackets from four to two [STC, Press Releases, 5-17-23 and 5-18-23].
Employers should use the revised withholding tables going forward but do not need to adjust withholding going back to the beginning of the year. An error was found and corrected in the wage bracket withholding tables (for monthly – married persons), so employers should use the version revised as of May 18, 2023.
Effective January 1, 2023, the supplemental wage tax rate has also been reduced to 5.8% from 6%.
Story sourced from PayroOrg
Revised Utah Withholding Tables
Effective for wages paid on or after June 1, 2023, the Utah State Tax Commission (STC) has issued a revised withholding guide, including revised percentage method and wage bracket withholding tables [STC, Publication 14, rev. 4-23].
The revision is due to legislation that lowered the personal income tax rate to 4.65% from 4.85%, effective January 1, 2023. The personal income tax rate was lowered to 4.85% from 4.95%, effective January 1, 2022. This corrects information that was previously reported in an earlier news release.
The STC does not have specific rules or provisions for the taxation of supplemental wages at the state level.
Story sourced from PayroOrg