[Revenews] LISTSERV Dec. 2010 - DO NOT reply to this email

[PURKEYPILE Steve]

Payrolltax-News LISTSERV
Dec. 2010


I.  Updates:

Withholding Tax Formulas:

The "Withholding Tax Formulas" have been updated for 2011 and are located in a PDF format at http://www.oregon.gov/DOR/BUS/payroll_updates.shtml

The withholding tax tables will be modified effective Jan.1, 2011. However, the publishing of the tables will depend on when the federal tax law extending the federal tax cuts has been resolved.

See our website at http://www.oregon.gov/DOR/BUS/payroll_updates.shtml for further information on withholding and transit tax updates.

Affordable Care Act:

As a result of changes made by the recently enacted Affordable Care Act, health coverage provided for an employee's child under 27 years of age is now generally tax-free to the employee for federal purposes, effective March 30, 2010.  Previous law allowed such treatment for dependents under 19 years of age, or under 24 if the dependent was a student,.

Oregon has not adopted these changes.  As a result, any expanded coverage provided for adult children under the Affordable Care Act is taxable income to the employee receiving the benefit for Oregon purposes.  The legislature may act to adopt this exclusion in the 2011 session, but at this time it cannot be predicted with any certainty that such action will occur.

The department recommends that employers take the necessary steps to include these amounts on the affected employee's W-2 statement for tax year 2010.  Please report this amount in Box 14 and label this amount "ACA Child." Do not modify the state wages in Box 16. This will allow taxpayers to easily identify the appropriate amount of income to report if the legislature does eventually decide to exclude these amounts from Oregon taxable income.  We will post further updates and instructions to taxpayers on our website in January.

If you have further questions, please email payroll.help.dor at state.or.us<mailto:payroll.help.dor at state.or.us>.


II. Mandating Electronic Deposits:

Oregon follows federal requirements on making payroll tax deposits and businesses will be required to electronically deposit withholding if they are mandated to do so by the IRS. You must register and pay your Oregon combined payroll taxes electronically via EFT if you are federally mandated to use the Electronic Federal Tax Payment System (EFTPS).  Due to the increased volume of EFT registrations please allow an additional 4 to 6 weeks for your EFT Confirmation.  Continue to pay with check and coupon until this registration process is complete.

EFT (Electronic Funds Transfer) payments are a convenient way to make all tax deposits, including Employment, Transit, and the Workers Benefit Fund Assessment.

Oregon will continue to mail paper OTCs (Oregon Tax Coupons) for those who deposit by check even though the IRS has chosen to do away with federal payment coupons.


III.   Important note:

A. W2 Information:
Employers are not required to include the Workers Benefit Fund Assessment not the Transit Tax information (TriMet or Lane Transit) on form W2 box 18. These are not considered to be "local taxes" for income tax purposes. Transit taxes are also paid by the employer and are not a deduction from an employees paycheck

The Payrolltax-News e-mail list provides employers with complete and up-to-date payroll tax information. Employers can self-subscribe here<http://listsmart.osl.state.or.us/mailman/listinfo/payrolltax-news>. Representatives in the Business Division will send information to employers through this list. Employers can request additional information by e-mailing payroll.help.dor at state.or.us<mailto:payroll.help.dor at state.or.us>.

As a standard practice, e-mail sent from the department will be in text form only. Department of Revenue will not open attachments.

Questions about list content and subscription problems should be directed to the list owner:

Cathy Tavares
Oregon Dept of Revenue
Cathleen.M.Tavares at state.or.us<mailto:Cathleen.M.Tavares at state.or.us>
503-945-8762<mailto:Cathleen.M.Tavares at state.or.us>

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