2013 Tax Updates
Here are the highlights, but more details are in the links below:
- The online W-2s are ready for viewing/printing.
- Paper W-2s, for individuals who did not consent to the online version, will be mailed to employees on Monday, January 28, using the home address we have on file.
- New for the 2012 W-2 is the mandatory reporting, for informational purposes only, of employer-sponsored health plan contributions. This will appear on one of the box (12) lines, with a code of 'DD'.
- The other wage and tax statement - Form 1042-S - received by foreign nationals who exempted all or part of their compensation by use of a tax treaty, or who received a scholarship/fellowship or honorarium, will be issued no later than March 15. Our goal is to issue them in February, but compiling information from (3) systems (HR, Financials and SIS) onto the 1042-S Forms, which are produced in yet another system (Thomson Reuters, previously known as Windstar Technologies), is pretty challenging.
- Some foreign nationals receive a W-2, some receive a 1042-S, and some receive both.
- Every employee who is subject to Social Security tax will notice a 2% increase in the OASDI (Old Age, Survivors and Dependents Insurance) portion, which was part of a prior year tax stimulus measure that expired December 31, 2012.
- The maximum wage base subject to the OASDI portion of Social Security for 2013 is $113,700.
- There is no maximum wage base for the MED (Medicare) portion of Social Security, but there is something new.
- For individuals whose MED subject wages exceed $200,000, an additional 0.9% MED tax will be withheld. It's quite a bit more complicated than it sounds and ultimately involves information that we, as an employer, don't have access to. As an employer, we can only trigger this additional tax using the $200,000+ salary threshold. If you make less than that, you may not be safe. If you make more than that and pay the additional tax, you may get to claim a credit. Confused? See one of the attachments for more details.
- New federal income tax tables/formulas have been published by IRS; however, they will not be integrated into our HR System until we receive the official tax update from our vendor, PeopleSoft. January checks will be calculated using the 2012 tax tables. For most people, the withholding will go down by a very small amount, once we move to the new tables/formulas.