The state of Florida recently issued a notice to employers regarding minimum wage:

The revised 2011 minimum wage in Florida is $7.31 per hour, effective June 1, 2011, with a minimum wage of at least $4.29 per hour for tipped employees, in addition to tips.

The minimum wage rate is recalculated yearly on September 30, based on the Consumer Price Index.

An employer may not retaliate against an employee for exercising his or her right to receive the minimum wage.  Rights protected by the State Constitution include the right to:

1.   File a complaint about an employer’s alleged noncompliance with lawful minimum wage requirements.

2.  Inform any person about an employer’s alleged noncompliance with lawful minimum wage requirements.

3.   Inform any person of his or her potential rights under Section 24, Article X of the State Constitution and to assist him or her in asserting such rights.

An employee who has not received the lawful minimum wage after notifying his or her employer and giving the employer 15 days to resolve any claims for unpaid wages may bring a civil action in a court of law against an employer to recover back wages plus damages and attorney’s fees.

An employer found liable for intentionally violating minimum wage requirements is subject to a fine of $1,000 per violation, payable to the state.  The Attorney General or other official designated by the Legislature may bring a civil action to enforce the minimum wage.

For details, see Section 24, Article X of the State Constitution and Section 448.110, Florida Statutes.

The Treasury Department has announced that, as a part of a three-pronged initiative to reduce the amount of paper transactions it handles, most employers that are now allowed to use Federal Tax Deposit Coupons and checks to make payroll tax deposits will have to make those deposits electronically through the Electronic Federal Tax Payment System (EFTPS) beginning in 2011.  The primary exemption will be for employers that have $2,500 or less in quarterly payroll tax liability and that pay their liability when filing their employment tax returns (e.g. Forms 941 or 944).

Currently, employers are required to use EFTPS at the beginning of the second calendar year after their total federal tax deposits (e.g., payroll, income, excise, etc.) exceed $200,000 in a calendar year.  Once they meet the threshold, they must use EFTPS even if their total tax deposits dip below $200,000 in a future year.

What does this mean for you?  Starting in 2011, if you make your payroll tax liability deposits in any manner other than paying them with the quarterly return, you will be required to deposit them electronically through EFTPS.  You will no longer be allowed to pay them at your bank with a coupon.

As soon as possible, you will need to sign up for EFTPS.  It is easy and it is free.  Just go to www.irs.gov and on the right hand side of the page, you will see the EFTPS logo.  Click on this and it will take you to a page that contains a brief description of the program and a link which allows you to register for the program.  Some of the items that you will need to complete the registration besides the company name and address include your company’s Federal I.D. number and banking information.  You will also need to assign a designated individual as the primary contact.

Once your company is enrolled, you can make any of your federal tax deposits via the internet or telephone.  By 8:00 p.m.(ET) at least one calendar day in advance of the due date, you access EFTPS directly to report your tax information. You will instruct  EFTPS to move the funds from your account to the Treasury’s account for payment of your federal taxes. Funds will not move from your account until the date you indicate. You receive an immediate acknowledgement of your payment instructions, and your bank statement will confirm the payment was made.  You can initiate your tax payment 24 hours a day, seven days a week.

As an added convenience,  EFTPS allows taxpayers to schedule tax payments in advance. Businesses can schedule payments up to 120 days in advance of their tax due date. Individuals can schedule payments up to 365 days in advance of their tax due date. EFTPS will automatically make your payments for you on the due date you indicate. Scheduled payments can be changed or cancelled up to 2 business days in advance of the scheduled payment date.

If you have any questions regarding this program or anything else regarding your payroll or business, please contact the CPA professionals at Hill, Barth & King’s Fort Myers office at 239-482-5522 and we will be glad to help.

As a follow up to my “Hiring Incentives to Restore Employment Act (HIRE)” post on March 25, 2010, I am sharing the Q&A’s from the IRS website on the HIRE Act.  Additionally, the IRS released a draft of the new IRS Form W-11 (416), the affidavit individuals must complete to confirm that they are qualified employees under the new law that provides tax incentives for businesses hiring new workers.  You can find a PDF version of the new Form W-11 in the RESOURCES section of our site.  The HIRE Act affects many of our clients in Fort Myers, Cape Coral and the surrounding Southwest Florida communities, and I would encourage all employers to become familiar with this new act.

These are Q&A’s from the IRS website on the HIRE Act:

Q: Who are qualified employees?
A: Qualified employees are individuals who begin employment with a qualified employer after February 3, 2010, and before January 1, 2011, who have been unemployed or employed for less than 40 hours during the 60-day period ending on the date such employment begins, and who are not family members of or related in certain other ways to the employer.
Q: Do the qualified employees need to do anything to make it possible for their employer to claim the payroll tax exemption?
A: Yes, qualified employees must certify by a signed affidavit, under penalties of perjury, that they have not been employed for more than 40 hours during the 60-day period ending on the date they started employment. The IRS plans to issue a model affidavit that can be used for this purpose.

Q: Is the 60-day period continuous, and can it span 2009-2010?
A: The 60-day period must be continuous and can span 2009-2010.

Q: Does the payroll tax exemption apply to wages paid to a qualified employee hired to replace an existing worker whose employment terminated?
A: The payroll tax exemption does not apply to wages paid to an employee who is hired to replace an existing worker, unless the existing worker terminated employment voluntarily or was terminated for cause.

Q: Does the payroll tax exemption apply to wages paid to an employee who was previously laid off and then rehired by the same or a related employer after a 60-day period?
A: Yes, an employer may apply the payroll tax exemption to wages paid to a rehired employee who is otherwise a qualified employee.

Q: If an employer lays an employee off because of lack of work and later, when work picks up, hires a new employee, can the payroll tax exemption apply to wages paid to the new employee?
A: Yes, if the new employee is a qualified employee (i.e., was employed for less than 40 hours during the prior 60 days).

Q: Does the payroll tax exemption apply only if the employer previously laid employees off?
A: No, the payroll tax exemption can apply to wages paid to any qualified employee.

Q: If an employer hires a recent graduate who has been in school for some or all of the 60 days preceding the start of his employment, does the payroll tax exemption apply to wages paid to the employee?
A: Yes, if the employee is a qualified employee.  It is not necessary that the individual was previously employed and has lost his or her job to be a qualified employee.

Q: What is the payroll tax exemption?
A: The payroll tax exemption is an exemption from the employer’s 6.2 percent share of social security tax on all wages paid to qualified employees from March 19, 2010 (the day after the date of enactment of the HIRE Act) through December 31, 2010. The employee’s 6.2 percent share of social security tax and the employer and employee’s shares of Medicare tax still apply to all wages.

Q: Which employers qualify for the payroll tax exemption?
A: Taxable businesses and tax-exempt organizations qualify for the payroll tax exemption. Such employers in U.S. possessions, such as Puerto Rico or the Northern Mariana Islands, that are subject to social security tax also qualify for the payroll tax exemption. Federal, State or local government employers generally do not qualify for the payroll tax exemption. However, public colleges and universities can qualify for the exemption.

Q: Does the payroll tax exemption apply to household employers?
A: No. The payroll tax exemption applies only to wages paid to a qualified employee performing services in the employer’s trade or business or in activities in furtherance of a tax-exempt organization’s exempt purpose.

Q: If an employer starts a new business, does the payroll tax exemption apply to wages paid to employees hired for the new business?
A: Yes, if they are qualified employees.

Q: If an employee laid off in 2009 has been receiving COBRA premium assistance, for which the employer has been taking the COBRA premium assistance credit, and the employer rehires the employee, can the employer take the payroll tax exemption under the HIRE Act for wages paid to the employee?
A: Yes, if the employee is a qualified employee.

Q:  How does the employer claim the payroll tax exemption for wages paid to qualified employees?
A: The payroll tax exemption is claimed on Form 941, Employer’s QUARTERLY Federal Tax Return, beginning with the second quarter of 2010.

Q: How does the employer claim the payroll tax exemption for wages paid to qualified employees during the period March 19 through March 31, 2010 (the first quarter of 2010)?
A: The payroll tax exemption for wages paid during this period will be claimed on the employer’s Form 941 for the second quarter of 2010.

Q: Can an employer claim the COBRA premium assistance credit and the payroll tax exemption for new hires on the same employment tax return?
A: Yes.

Q: How does application of the payroll tax exemption to wages paid to a qualified employee affect the availability of the Work Opportunity Tax Credit with respect to that employee?
A: If an employer applies the payroll tax exemption to wages paid to a qualified employee, such wages paid to the employee during the one-year period beginning with the employee’s hiring date may not be taken into account for purposes of the Work Opportunity Tax Credit. An employer that wishes to claim the Work Opportunity Tax Credit with respect to a qualified employee can elect out of the payroll tax exemption with respect to wages paid to that qualified employee.

We will provide more information on the HIRE Act as well as other legislative changes affecting the tax law as developments occur.  Please contact one of our CPAs in our Fort Myers, FL office if you have any questions regarding the HIRE Act and how it can help your business.

James M. (Jim) Rosa, CPA, PFS is the Principal in charge of the Tax Department at Hill, Barth & King LLC.  Jim has worked as a CPA helping clients in Fort Myers, Cape Coral and other Southwest Florida communities for the last 23 years. He has been with Hill, Barth & King LLC, a top 75 accounting firm, since 1986.

Here is some welcomed news for those of us in Fort Myers, Cape Coral and the surrounding Southwest Florida communities.

To help jumpstart business hiring and investment, Congress has passed, and President Obama has signed, the Hiring Incentives to Restore Employment (HIRE) Act.  The HIRE Act provides for payroll tax forgiveness and an employer income tax credit of up to $1,000 for qualified new hires.  The payroll tax forgiveness is significant as for the first time the hiring of formerly unemployed workers will benefit businesses regardless of their profitability.  The payroll tax forgiveness can benefit EVERY business and most nonprofits. The HIRE Act also extends enhanced Code Sec. 179 small business expensing to the 2010 year.

Hiring incentives. The HIRE Act provides qualified employers with temporary payroll tax forgiveness of the employer’s 6.2 percent share of Social Security payroll taxes on wages paid to new hires who had been previously unemployed.  Payroll tax forgiveness is effective for qualified employees on wages earned for work after March 18, 2010 and on or before December 31, 2010.  A qualified employee must begin work any time after February 3, 2010 and before January 1, 2011.  The newly hired worker must not have been employed for more than 40 hours during the 60-day period ending on the date that the individual begins employment.  The rehiring of former employees is eligible for this hiring incentive, as long as they have been unemployed for the 60-day period.  Therefore, recalling laid off workers can qualify.

Full time and part time employees both qualify and there is no age requirement for the new hires.

Hired workers will be required to sign an affidavit certifying that they have not been employed for more than 40 hours during the 60-day period they were unemployed.  The IRS is working on a “model affidavit” language eligible hires will be required to sign.

Retained worker business credit. Under the HIRE Act, employers that hire new workers who qualify for payroll tax forgiveness may also be eligible for an income tax credit for each qualified employee.  For the employer to be entitled to this new credit, the qualified employee must be retained on the employer’s payroll for 52 consecutive weeks.  The business credit under Code Sec. 38 will be increased, with respect to each qualified retained worker, by the lesser of $1,000 or 6.2 percent of wages paid by the taxpayer to the qualified retained worker during the 52 week period.

The hiring incentive and retained worker business credit can provide a significant tax break for hiring or rehiring individuals who meet the 60-day unemployment period.

Expensing. The HIRE Act raises the Code Sec. 179 small business expensing dollar limit for 2010 to $250,000 and the cap to $800,000 (the same amounts in place in 2009).  The HIRE Act also provides that off-the-shelf computer software, a popular business purchase, is Code Sec. 179 property.

We will provide more information on the HIRE Act as well as other legislative changes affecting the tax law as developments occur.  Please contact  one of our professionals in our Fort Myers, FL office if you have any questions regarding the HIRE Act and how it can help your business.

James M. (Jim) Rosa, CPA, PFS is the Principal in charge of the Tax Department at Hill, Barth & King LLC.  Jim has worked as a CPA helping clients in Fort Myers, Cape Coral and other Southwest Florida communities for the last 23 years. He has been with Hill, Barth & King LLC, a top 75 accounting firm, since 1986.