Let your Payroll people know: The Internal Revenue Service just made changes to several important forms and publications that affect your current and year-end processing.
Here’s a summary of three IRS updates you’ll need:
1. Forms W-2, W-3, 1098, 1099 and 5498 . Although there are no changes to the forms themselves, take another look at what IRS calls the “lead attention page.” This summary page says that on both the 2008 and 2009 Forms W-2, W-2c, W-2AS, W-2GU, W-2VI, W-3, W-3c, W-3PR, or W-3SS, the sentence “Do not file copy A with SSA” has been changed to “Do not file copy A downloaded from this website with the SSA.”
If you downloaded 2008 or 2009 Forms 1098, 1099, or 5498, note that on the lead attention page, the phrase “Do not file copy A with IRS” has been changed to “Do not file copy A downloaded from this website.”
The official printed version of IRS forms copy A is scannable, but the online version of it, printed from the IRS Web site, isn’t.
2. Publication 15-B, Employer’s Tax Guide to Fringe Benefits. Although the info in the printed copy isn’t accurate, IRS won’t issue a revised edition until next year. Note that on page 20, under the heading “Exclusion from Wages,” the first bullet point should read:
“For combined commuter highway vehicle transportation and transit passes:
a. $120 per month for the months of January and February 2009 and
b. $230 per month for the months of March through December 2009.”
This change was made as a result of the American Recovery and Reinvestment Act of 2009.
3. Publication 15 (Circular E), Employer’s Tax Guide. Chances are you downloaded the 2009 copy of this payroll bible before 3/31/09. If that’s the case, you’ll want a new one from www.irs.gov/formspubs/article/0,,id=109875,00.html.
Here’s why:
New tables for withholding and advance earned income credit (EIC) payments have been developed due to the American Recovery and Reinvestment Act of 2009. The new tables can be found in Publication 15-T, New Wage Withholding and Advance Earned Income Credit Payment Tables (For Wages Paid Through December 2009).
On page 11, the first sentence under “Employee Business Expense Reimbursements” has been changed and now reads, “A reimbursement or allowance arrangement is a system by which you pay the advances, reimbursements, and charges for your employees’ business expenses.”
On page 11 under Accountable plan:
a. The last sentence in item 1 now reads “The reimbursement or advance must be paid for the expense and must not be an amount that would have been paid by the employee.”
b. Item 2 now says, “They must substantiate these expenses to you within a reasonable period of time.”
c. Item 3 now reads “They must return any amounts in excess of substantiated expenses within a reasonable period of time.”
On page 20 in the “Caution” under the section titled “How to Figure the Advance EIC Payment,” amounts previously reported as “$35,464” and “$38,584” now read “$35,463” and “$40,463,” respectively.
On page 24 under “How to deposit with a FTD coupon,” IRS added three new paragraphs at the end of this section to advise the financial agent can’t process foreign checks. If you send a check written on a foreign bank to pay a federal tax deposit, generally you will be charged a deposit penalty and will receive a bill in the mail.
