There are several news items for business owners to be aware of as we start the new year:
• The Colorado Department of Labor and Employment has updated the Colorado Affirmation of Legal Work Status, also referred to as the Colorado Affirmation form, effective Jan. 11, 2011. Colorado employers must complete the revised form for all employees hired on or after Jan. 11. The Department of Labor is stressing compliance rather than penalties, but employers who do not comply with Colorado Revised Statute 8-2-122 may be subject to fines. The form may be downloaded from the department's website www.colorado.gov/cdle/evr.
• New W-2 reporting guidance from IRS.
- Many employers will be required to report health plan coverage values for 2012 on W-2 forms issued in January 2013. Employers with fewer than 250 W-2’s issued for the prior year are excused from the reporting requirement.
- The new guidance from the IRS includes a chart that makes reporting of most dental and vision coverage optional. Previous guidance from the IRS suggested that dental and vision coverage under separate contracts of insurance was not to be reported at all.
- Contributions to Health Savings Accounts (HSAs) are not reported in the health plan coverage value, but are reported on the Form W-2 with the code “W” rather than the code “DD” used to report health plan coverage values.
• Congress has extended the employee’s reduction in Social Security taxes for the balance of 2012. This was scheduled to expire on Feb. 29, but will now be in effect through Dec. 31, 2012. Employees will contribute 4.2 percent of their pay, up to the Social Security Wage Base of $110,100, a reduction from the normal 6.2 percent.Employers should make sure their payroll service or their payroll department is aware of this recent change.
Frazier International provides human resource consulting services to small and mid-sized companies. Feel free to contact Ned Frazier at 303-875-5078 or firstname.lastname@example.org with any questions.