All posts by Nick

Covid Era 941 Printing and Installation

Installing:

Once you have the update file just double click it
and follow the prompts. You will need to know the PayMaster
directory. For most people it’s C:\PRV8. Check this by right
clicking the PayMaster icon on your desktop, select properties
and look at “Start in”. Change it in the installer if you have to.
When it asks about overwriting files click “Yes”, or better yet “All”.

Strictly speaking, this is one of the few updates that does not
require PayMaster to be closed when you install it. You should close
PayMaster anyway.

Using:

PayMaster has always allowed you to print a 941 from
a prior year/quarter. With the virus the IRS has elected
to use “enhanced” 941 form(s). This has created a challenge.

For the duration you need to access the 941 form through
Reports->941->941 (2020). This gives you access to any 941 from
Q2 2020 going forward. Most of the time you can
just open the report and go from there. Assuming you are printing
the form you need to file soon.

If you need to reprint a prior 941 from Q2 2020 onward:

1. Open with Reports->941->941 (2020)
2. Select the year you want up at the top.
3. Click on the quarter you need to print.

(Note: you may need to click a different quarter and then
click the one you want. This forces a program re-read.)

Printing a 941 from Q1 2020 and earlier

1. Open with Reports->941->941 Form
2. Select the year you want up at the top.
3. Click on the quarter you need to print.

(Note: you may need to click a different quarter and then
click the one you want. This forces a program re-read.)

New Jan. 31 Deadline for Employers

The Protecting Americans from Tax Hikes (PATH) Act, enacted last
December, includes a new requirement for employers. They are now
required to file their copies of Form W-2, submitted to the Social
Security Administration, by Jan. 31. The new Jan. 31 filing
deadline also applies to certain Forms 1099-MISC reporting
non-employee compensation such as payments to independent
contractors.

In the past, employers typically had until the end of February, if
filing on paper, or the end of March, if filing electronically, to
submit their copies of these forms. In addition, there are changes
in requesting an extension to file the Form W-2. Only one 30-day
extension to file Form W-2 is available and this extension is not
automatic. If an extension is necessary, a Form 8809 Application
for Extension of Time to File Information Returns must be
completed as soon as you know an extension is necessary, but by
January 31. Please carefully review the instructions for Form
8809, for more information.

“As tax season approaches, the IRS wants to be sure employers,
especially smaller businesses, are aware of these new deadlines,”
said IRS Commissioner John Koskinen. “We are working with the
payroll community and other partners to share this information
widely.”

The new accelerated deadline will help the IRS improve its efforts
to spot errors on returns filed by taxpayers. Having these W-2s
and 1099s earlier will make it easier for the IRS to verify the
legitimacy of tax returns and properly issue refunds to taxpayers
eligible to receive them. In many instances, this will enable the
IRS to release tax refunds more quickly than in the past.

The Jan. 31 deadline has long applied to employers furnishing
copies of these forms to their employees and that date remains
unchanged.

Click here for the original at IRS

The Minimum Wage

The minimum wage is really just the least amount you can pay an employee for the work they do. We have included a link at the bottom to the labor department that gives some specific numbers and a more detailed look. Here we content ourselves with a broader view.

A minimum wage for the United States was first established in 1938, during the Great Depression under the Fair Labor Standards Act. Since then, various ammendments have been added and the dollar amount of the minimum wage has been increased.

Not every employeer has to pay minimum wage. Exceptions are few but they do exist.
For a feel of who is exempt here are a few examples:

  • “Executive, administrative, and professional employees
  • Workers with disabilities
  • Federal criminal investigators
  • Farmworkers on small farms
  • Fishing
  • Homeworkers making wreaths
  • Newspaper delivery
  • Newspaper employees of limited circulation newspapers
  • Seamen on other than American vessels
  • Switchboard operators
  • Certain seasonal workers”*

Also included, with some fairly strict conditions, are students and young people under the age of 20.*

As you can see, the list is pretty restricted. Chances are, if you employee hourly people, you will have to pay at least minimum wage.

Besides the feds, states and localities can set their own minimum wages. “So what amount do I need to pay?”, you may ask. The answer is the largest amount among the three. Or the largest between state and federal if your local jurisdiction does not have a minimum wage.

So what if I don’t want to pay minimum wage?
As with most anything else, there are various pros and cons for paying less than the required minimum wage.

Pros:
Wow, this can save me a ton of money!

Cons:

The labor department has an arsenal ranging from administrative procedures to civil litigation all the way up to criminal prosecution. Most people would agree that back wages, liquidated damages, and civil penalties don’t sound good. To say nothing about fines and imprisonment. On balance, most would agree that paying at least the minimum wage is probably the way to go. Your payroll software should help to insure you are paying at least minimum wage.

As promised, here is a link to the labor department that gives specific guidance on minimum wage by state:

DOL minimum wages by state.

References:
* US Department of Labor

The Tip Credit

The tip credit is the amount of employee tips that restaurants may use to reduce the cash wages they must pay tipped employees. There are enough exceptions and special rules to delight the hearts of lawyers and glaze the eyes of everyone else. Here we will simplify things – some – in the interest of clarity and provide a few references later that go into greater detail.

At the end of the day, restaurant employees in the United States must make at least the minimum wage. The minimum wage to use is either the federal, state or local minimum wage, whichever is highest. This only makes sense. When the employee makes the highest amount then you are automatically in compliance with labor law in all the jurisdictions that apply to you. (Federal and state for most people.)

To simplify things we will only consider the case of what the feds require. Your state might be different. The Fair Labor Standards Act allows restaurants to pay tipped employees less than the minimum wage in cash. At the time of this writing the federal minimum wage is $7.25 per hour and the federal maximum tip credit is $5.12 per hour. On a good day this means you only need to pay a “customarily tipped” employee $2.13 per hour. ie $7.25 – $5.12 = $2.13. Now you might think “Hey this is great!” but there is a catch. The employee must make $5.12 per hour or more in tips for this to be true. If the employee makes less than that in tips you are required by law to make up the difference on their pay check.

In the end, the formula for hourly rate is really equal to:

Rate = MinimumWage – MaxTipCredit + MakeUpAmount

The MakeUpAmount will be zero if the employee makes enough in tips. If they don’t, there are significant fines unless you add it to their paychecks somehow. The best way is to make sure your payroll software does it automatically.

Helpful resources:

Click here for a good take on tips from the Labor Department

Click here for state minimum wages here.