Join Jim Paille as he talks about payroll tax compliance going into the new year. In this session, you will understand the latest tax reform items that affect payroll. He will cover new IRS initiatives to be mindful of entering 2021. Then, Jim will discuss topics related to the 2020-2021 W-4’s impact at both the federal and state levels. Finally, he will cover some tips you can leverage to make your year-end processing more efficient and effective.

1. Organize. Humanize. Maximize.
Payroll Tax Compliance 2020 and
2021 Legislative Update
December 10, 2020
Jim Paille, CPP

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Today’s Speaker
Accomplished speaker and author Jim Paille is a leading expert on payroll and payroll taxation.
Jim is the Corporate Secretary and Chief Compliance Officer for myPay Solutions, a division of
Thomson Reuters. Where he is an authority on compliance, licensing, bank relationships and risk
management.
Jim previously served as president of the American Payroll Association and currently serves as the
Corporate Member Advisor on the Board of Directors. He also sits on the Executive Committee,
Finance Committee and National Speakers Bureau. Additionally, he chairs the CPP Certification
Review Panel. He is also a current member of the Board of Directors for the IPPA.
Jim is a prior member of IRSAC - Internal Revenue Service Advisory Council and served as chair of
SB/SE sub-committee. He is an active member of the Reporting Agents Forum (RAF) for the IRS.
Jim is a seasoned keynote speaker creating impactful content for global audiences.
Jim Paille, CPP

8. Disclaimer
The materials provided in this presentation and any comments or information provided by the
presenter are for educational purposes only and nothing conveyed or provided should be
considered legal, accounting or tax advice.

9. Reference Materials
Detailed & Updated handout is available at: jimpaille.com
1
• Launch website and navigate to:
2
• Click on Articles & Handouts tab
3
• Open Payroll Tax Compliance: 2020 and 2021
Legislative Update
* Presentation material is as of December 4, 2020 *

10. Objectives
Understand the
latest tax
reform items
that affect
payroll
Discover new
IRS initiatives
Discuss topics
related to the
2020-2021 W-4;
impact at
Federal & State
levels.
Utilize tips to
make year-end
processing
more efficient
and effective

11. Agenda
• Trump’s Budget Proposal
• Employee FICA Deferral
• 1st Time Abatement
• New Legislation
• Covid Legislation
• State Withholding
• Truncated SSNs
• W-2 Changes for 2020
• EFTPS Confirmation Emails
• New Cyber Security Incident
Reporting
• 1099 NEC & 1099 MISC
• New NACHA Recall Rules
• Exempt/Non-Exempt

12.  Wage Reporting
 Modernize IRS
 Mandatory E-Verify
 Paid Leave
 New Hire
 Healthcare Reform
 Parental Leave
Trump Budget Proposals

13. Confidential and Proprietary
Incoming President elect Biden Payroll Implications
Taxation Issues
Raising federal income taxes on anyone earning $400,000 or more
Increasing the top individual federal income tax rate to 39.6% (currently 37%)
Requiring those earning more than $1 million to pay a tax rate on investments equal to the rate of tax on their wages
Raising 401k /403b / 457 / IRA contribution
Offering tax credits for child care, home purchases, and health care
Wage and Hour Issues
Raising the federal minimum wage to $15 an hour (currently $7.25 an hour)
Increasing minimum wage and overtime enforcement
Union friendly regulations
Tightening independent contractor rules, including the gig economy (1099k)
Joint employer status rule changes

14. Employee FICA Deferral
Total Income box 3 Net Soc
Sec Box 4 – when repaid W-
2C

15. 15
15
Confidential and Proprietary
FICA Deferral 2020
Form W-2 Reporting of Deferred Employee Social Security Tax:
Employers should include any wages for which they deferred withholding and payment
of the employee's portion of the Social Security tax in 2020 in box 3 and/or box 7 of
Form W-2. However, they should not include in box 4 any amount of deferred employee
Social Security tax that has not been withheld. Amounts deferred in 2020 that are
withheld in 2021 and not reported on the 2020 Form W-2 should be reported in box 4 of
Form W-2c . Employers should enter tax year 2020 in box c of Form W-2c and adjust the
amount previously reported in box 4 of the Form W-2 to include the deferred amounts
that were withheld in 2021. For additional information, see www.irs.gov/forms-
pubs/form-w-2-reporting-of-employee-social-security-tax-deferred-under-notice-2020-
65 . Further the IRS has advised employers to produce the W-2C as soon as possible
after the employee has repaid the deferred Social Security Tax.
Additional note – the adjustments could require the employee to file a 1040- X.
IRS issues W-2 Rule on Deferred Social Security Tax

16. • Forgive payroll taxes. Creating a payroll
tax holiday for employees from
9/1/2020- 12/31/2020
• Changes employee's Social Security tax
rate from 6.2% to 0%
• Self-employed individuals included in tax
holiday
• Protects Social Security Trust Funds by
including a General Revenue transfer to
offset the reduced revenue.
Bill - Support for Workers, Families, and Social Security Act

17. 2020 941

18. Polling Question #1
Is your company offering deferred FICA?
a. Yes – all employees eligible
b. Yes – with employee sign up
c. No

19. New September 2020 Draft 941

20. 1st Time Abatement
You did not previously file a return or have no penalties for 3
tax years prior to the tax year in which you received a penalty.
You filed all currently required returns or filed an
extension of time to file.
You have paid, or arranged to pay, any tax due.
The IRS may provide relief from a penalty under its First Time Penalty Abatement policy.
You may
qualify if:

21. 8655 Identity Requirements
Publication 1474 recent revision Sept 2020
• Saved versions of electronically signed Forms
8655 must display validation evidence of the e-
signature.
• A Reporting Agent securing an e-Signature for
Form 8655 must exercise due diligence by
authenticating the signor’s identity via one of the
two approved methods:
1. Visual Inspection
2. 3rd Party Authentication Services
pass/fail. Reporting Agent must
maintain permanent record
https://www.irs.gov/pub/irs-pdf/p1474.pdf (section 01.04)

22. Additional Federal Items
•Health Reform
1094 & 1095
Fraud Prevention
SSN Mismatches
1099 NEC/1099 MISC
•Path Act Items
Truncation of SSN on W-2s
W-2 Box 14 – Sick Leave
PTIN Cost Returns
EFTPS Payment Confirmation

23. IRS Updates Authentication Procedures
Updated Authentication Procedures
The IRS has updated taxpayer and third-party authentication procedures in two ways:
1. In certain circumstances, when a taxpayer calls the IRS seeking return information,
IRS employees will ask taxpayers to provide additional authentication of their
identity.
2. Before releasing any return information to a third party who calls the IRS, IRS
employees will need to authenticate the identity of the third party. (2848) (8655 is
limited POA Reporting Agent Authorization) used generally for payroll.
Confidentiality and Disclosure of Returns and Return Information
• Generally, returns and return information shall be confidential and
may be disclosed by IRS employees only as authorized by law.

24. Rule Change on Reversals
Nacha has implemented changes, in part due to a high-profile incident last year
involving improper use of reversals. Clarifying reversals are permissible and
increase the penalties when improper reversals occur.
https://www.nacha.org/rules/reversals-and-enforcement
ACH Reversals- Clarifies that reversals made for any reason other than those specifically
outlined in the rules would be improper. Passed - Effective June 30, 2021.
Expanded Enforcement- Define an Egregious Violation as a willful or reckless action, and
involves at least 500 Entries, or involves multiple Entries in the aggregate amount of at least
$500K. Allow the ACH Rules Enforcement Panel to determine whether a violation is egregious,
and to classify an Egregious Violation as a Class 2 or 3 Rules Violation. The sanction for a
Class 3 violation can be up to $500,000 per occurrence and a directive to the ODFI to suspend
the Originator or Third-Party Sender Expressly authorize Nacha to report Class 3 Rules
violations to the ACH Operators and industry regulators Passed - Effective January 2, 2021.

25. IRS Update
Reasonable Cause for Missing and Incorrect Taxpayer Identification Numbers
1
• Provide general
info needed to
avoid penalties that
are filed with
missing or incorrect
Taxpayer ID
Numbers.
2
• Describe the
actions that must
be taken or should
have been taken to
solicit (request) a
TIN.
3
• Explain the
requirements for
establishing
reasonable cause.
Updated as of July 2020 for IRS Publication 1586.
Objectives:
Penalties may be assessed for information returns that are: (i) filed with a missing/incorrect TIN (ii) filed late, (iii) filed on paper
when electronic filing is required, (iv) filed in an incorrect format, or (v) any combination of the above.

26. Federal Facts: W-2 &109(series) Penalty Increases 2021
Days Late Expected Penalty
Up to 30
days
• $50/return $571,000 max $199,500 small business
31 days -
July 31
• $110/return $1,713,000 max $571,000 small
business
Aug 1 -
later
• $280/return $3,426,000 max $1,142,000 small
business

27. IRS issues
refund to
fraudster
• Taxpayer
provides PII to
tax prepper or
software while
filing with the
IRS
Taxpayer
• Fraudster hacks
preparer or
software systems,
steals taxpayer PII
Fraudster •
Using a taxpayer’s
PII, fraudster files
a fraudulent return
claiming a refund
IRS
• Reporting of Security Incidents -
Online Providers of individual income tax
returns shall report security incidents to
the IRS as soon as possible, but no later
than the next business day after
confirmation of the incident.
• The IRS is developing a standardized
process for all Authorized e-file
Providers to report security incidents to
IRS. The IRS plans to update IRS
Pub1345 to include this process by
November 2020.
IRS Improves Oversight of Cybersecurity Practices

28. Trust Fund Recovery Penalty
 An officer or an employee of a corporation;
 A member or employee of a partnership;
 A corporate director or shareholder;
 A member of a board of trustees of a nonprofit organization;
 Another person with authority and control over funds to direct their disbursement;
 Payroll service providers or responsible parties within a PSP;
 Professional employer organizations or responsible parties within a PEO; or,
 Responsible parties within the common law employer (client of PSP/PEO)
Code Section 6672: Lists Responsibility Persons:

29. Gig Economy
Website covers topics, including:
• filing requirements
• making quarterly estimated income tax payments;
• paying self-employment taxes;
• paying FICA, Medicare, and Additional Medicare;
• deductible business expenses; and
• special rules for reporting vacation home rentals.
IRS launched Gig Economy Tax Center on IRS.gov
Provides guidance for businesses and workers in the gig economy (i.e., those people who
earn income providing on-demand work, services or goods).

30. IRS Issues 2020 Version of Form W-2
Electronic State W-2 & 1099
Due Date Changes
State W-2 Due Date 1099 Due Date
IA Feb 15 Jan 31, Feb 15 Proposal
MI Jan 31
NM Jan 31
OK Jan 31
WV Jan 31
New 2020 W-2 Instructions due to Deferred FICA Due Late 2020
State Truncated SSNs allowed in 2020

31. Paid Sick
Leave
Paid Family
Leave
Employee
Retention
Credit
IRS OFFERS 3 NEW CREDITS
to businesses hit by COVID-19
Covid box 14 required language
emergency family leave wages
 EFMLEA
sick leave wages subject to the $511 per
day limit
 EPSLA 511
sick leave wages subject to the $200 per
day limit
 EPSLA 200
COVID-19

32. 2021 Draft W-4

33. Tax Withholding Estimator
The IRS continues to urge everyone to do a paycheck checkup and review their withholding.

34. W-4s
CO
DE
NM
ND
PA
UT
State Withholding Forms
States that do NOT
have state W-4s: • AL, CA, CO, DE, HI, ID, KS, ME, MN, MO, MT, NE, NM, NC, ND,
OK, OR, RI and UT follow federal rule to withhold as if employee
was Single/Zero
• District of Columbia, Puerto Rico, IL, IN, KY, MI, MS, OH, SC,
VA recommend to WHT zero allowances.
• AZ requires WHT at 2.7% of gross taxable wages.
• AR advises employers to either withhold as if zero exemptions or
dependents, or use fed Form W-4.
• CT says to withhold at the highest marginal tax rate (6.99%)
• GA says to withhold using a single filing status with zero
allowances claimed, or to use federal Form W-4.
• LA advises employers to withhold as if zero exemptions or credits
for dependents were claimed.
• MD says to withhold as if one exemption was claimed.
• MA, NJ, NY, WV, WI advise employers to withhold based on federal
Form W-4.
• VT advises employers to withhold based on federal Form W-4
Employees that do NOT complete W-4

35. Polling Question #2
Is your company going to truncate SSN’s on employee W-2s?
a. Yes
b. No

36. IRS- PTIN &Health Flexible Spending
$21 fee per PTIN application or renewal
$14.95 fee payable to a contractor.
Anyone who prepares any federal tax return or
claim for refund for compensation must have a
valid PTIN from the IRS.
The IRS has increased the health flexible
spending arrangement carryover limit from a
fixed $500 to $550.

37. • Box 1 shows nonemployee compensation and/or
nonqualified deferred compensation (NQDC).
• Received this form instead of Form W-2 because
the payer did not consider you an employee and
did not withhold tax.
• If you believe you are an employee and can not
get the payer to correct this form, report this
amount on the line for “Wages, salaries, tips,
etc.” of Form 1040, 1040-SR, or 1040-NR.
• Trump Proposal - Raise the information reporting
threshold for payments to independent
contractors from $600 to $1,000.
• Establish a new safe harbor that allows a service
recipient to classify a service provider as an
independent contractor and require a 5% rate of
withholding on the first $20,000 of payments.
2020 - 1099 NEC

38. Changes listed below:
• Payer made direct sales of $5,000 or more
(checkbox) in box 7
• Crop insurance proceeds are reported in box 9
• Gross proceeds to an attorney are reported in box 10
• Section 409A deferrals are reported in box 12
• Nonqualified deferred compensation income is
reported in box 14
• Boxes 15, 16, and 17 report state taxes withheld,
state identification number, and amount of income
earned in the state, respectively
2020 1099 MISC
Redesigned Form 1099-MISC and rearranged box numbers, due to the creation of Form 1099-NEC.

39. 1099 K
What does my Form 1099-K
report to me?
Form 1099-K includes the gross
amount of all reportable payment
transactions. You’ll receive a
1099-K from each settlement
entity from which you received
payments in settlement of
reportable payment transactions.
NOTE: The minimum reporting thresholds of greater than $20,000 and more than 200
transactions apply only to payments settled through a third-party network; there is no threshold
for payment card transactions. (Trump proposal - Reduce the reporting threshold for third-party
settlement organizations from $20,000 and 200 transactions per payee to $1,000 without regard
to the number of transactions).

40. Early Release 2021 1099 MISC & NEC

41. New Hire and Rehire Rules by State
• AK All new hires, rehires, those returning to work, and
independent contractors
• AL All employees
• AR All new hires and rehires
• AZ All new hires and rehires
• CA All new and rehired employees to whom the employer
anticipates paying wages and independent contractor
• CO All new hires and rehires who are hired to work for at
least 30 days. Independent contractors should be reported if
the individual provides their SSN for tax purposes
• CT All new hires, rehires, and independent contractors
• DC All new hires and rehires
• DE All new hires and rehires
• FL All new hires
• GA New hires and rehires, with certain exceptions
• HI All New Hires and rehires
• IA All employees and contractors
• ID All new hires and rehires
• IL All new hires
• IN All employees
• KS All new hires and rehires
• KY All new hires
• LA All new hires and rehires
• MA All new hires and rehires, as well as independent
contractors.
• MD All new hires and rehires
• ME All new hires and rehires (including previous
employees who have been separated from employment
for at least 60 consecutive days), and independent
contractors paid $2,500 or more.
• MI All new hires

42. New Hire and Rehire Rules by State
• MN New hires, and rehires, employees who return to work after
being laid off, furloughed, separated, granted a leave without
pay, or terminated from employment after 90 days. State
agencies must also report contractors and subcontractors.
• MO All new hires
• MS All new hires and rehires
• MT All new hires
• NC All new hires and rehires
• ND All new hires and rehires
• NE All new hires and rehires, including independent
contractors
• NH All new hires who have never been previously employed
by the employer and rehires who were previous employed but
have been separated from prior employment for at least 60
consecutive days, and contractors who will be paid over $2,500
• NJ All new hires, rehires (previously employed but separated
from employment for at least 60 consecutive days) and
independent contractors
• NM All new hires and rehires
• NV All new hires
• NY All new hires, rehires, and independent contractors
• OH All new hires, rehires, and contractors
• OK Persons to whom the employer anticipates paying
earnings
• OR All new hires and rehires
• PA All new hires and rehires
• RI All new hires and rehires
• SC All new hires and rehires
• SD All new hires and rehires
• TN All new hires and rehires
• TX All new hires and rehires
• UT All new hires and rehires
• VA All initial new hires, including any employee who may
have previously worked for the employer, but has been
separated from the prior employment for at least 60
consecutive days.
• VT All new hires and rehires
• WA All new hires and rehires
• WI All new hires and rehires
• WV New hires, rehires, terminating employees, and
independent contractors paid more than $2,500 in a year.
• WY All new hires

43. Teleworking
• Six states—AR, CT, DE, NE, NY, and PA implemented
so-called convenience rules prior to the pandemic, while
Massachusetts adopted a temporary income sourcing
rule with the same effect in response to pandemic-era
telework.
• New Hampshire, which forgoes an income tax and is
home to many residents who normally work out of
offices in Massachusetts, the state Department of
Justice is exploring Massachusetts’ new sourcing rule
with an eye to possible litigation.
Federal Lawmakers take Emergency Action concerning income tax on teleworkers

44. The following states (jurisdictions) require
compensation for business expenses working
from home:
District of Columbia
California
Illinois
Iowa
Massachusetts
Montana
New Hampshire
New York
Pennsylvania
South Dakota
Jurisdictions that have passed legislation
stating they will not change nexus rules:
District of Columbia
Alabama
Georgia
Indiana
Iowa
Maryland
Massachusetts
Minnesota
Mississippi
New Jersey
North Dakota
Rhode Island
South Carolina
Vermont
States that have reciprocal agreements:
AZ California, Indiana, Oregon and Virginia
DC Maryland, Virginia
IA Illinois
IL Iowa, Kentucky, Michigan, and Wisconsin
IN Kentucky, Michigan, Ohio, Pennsylvania, and
Wisconsin
KY Illinois, Indiana, Michigan, Ohio, Virginia,
West Virginia, and Wisconsin
MD District of Columbia, Pennsylvania, Virginia,
and West Virginia
MI Illinois, Indiana, Kentucky, Minnesota, Ohio,
and Wisconsin
MN Michigan, and North Dakota (Agreement with
Wisconsin authorized but not yet in effect)
MT North Dakota
ND Minnesota and Montana
NJ Pennsylvania
OH Indiana, Kentucky, Michigan, Pennsylvania,
and West Virginia
PA Indiana, Maryland, New Jersey, Ohio,
Virginia, and West Virginia
VA The District of Columbia, Kentucky,
Maryland, Pennsylvania, and West Virginia
WI Illinois, Indiana, Kentucky and Michigan [
Wisconsin Dept. Rev. Tax Bulletin No. 171, ,
04/01/2011].
WV Kentucky, Maryland, Ohio, Pennsylvania, and
Virginia
Working From Home

45. • Social Security FICA
wage base
• 2020 rate changes
• Per diems
• Mandatory SDI states
• Minimum wage changes
• 2020 FUTA reduction
states – Virgin Island 3%
• 2021 SUI wage base
Increases
• Paycard state rules
• Federal & state changes
and proposals
• Mandated paid sick
leave (incl NY FMLA)
• State FMLA
• Uniform state non-
resident taxation
• ACA update
Rapid Changes Impacting
Payroll Providers

46. FICA Wage Base (mid forecast)
• 2020 — $137,700
• 2021 — $142,800
• 2022 — $149,100
• 2023 — $155,700
• 2024 — $162,300
• 2025 — $168,900
• 2026 — $175,800
• 2027 — $183,300
• 2028 — $191,100

47. SUI Wage Base Increases for 2021
New Jersey
$35,300 to
$36,200
Washington
$52,700 to
$56,500
Nevada
$32,500 to
$33,400
Colorado
$13,600 to
$17,000
Iowa
$31,600 to
$32,400
Montana
$34,100 to
$35,300
Wyoming
$26,400 to
$27,300
Oklahoma
$18,700 to
$24,000
Vermont
$16,100 to
$14,100
Utah
$36,600 to $38,900

48. Most states use June 30th as benchmark for determining next year’s SUI wage bases. Many states can take up to
4-9 months after the computation date to make their announcements. Several states use different “computation
date” calculations they are:
When do States Compute Next Year's Wage Base?
State Date State Date
Delaware Oct 1 North Carolina Aug 1
Hawaii Dec 31 North Dakota Sept 30
Kentucky July 31 Oklahoma Sept 30
Massachusetts Sept 30 Rhode Island Sept 30
Montana Sept 30 Tennessee Dec 31*
Nebraska Dec 31 Texas Oct 1
New Hampshire Jan 31 Vermont Dec 31*
New Jersey Dec 31 Virgin Islands Sept 30
New York Dec 31* - July 1
wage base resets

49. States Allowing Voluntary UI Contributions
Arizona January 31 Missouri Postmarked January 15
Arkansas Postmarked March 31 Nebraska January 10
California March 31 New Jersey 30 days after notice
Colorado March 15 New York March 31
Georgia 30 days after notice North Carolina 30 days after notice
Indiana 30 days after notice North Dakota April 30
Kansas 30 days after notice Ohio December 31
Kentucky 20 days after notice Pennsylvania 30 days after notice
Louisiana 30 days after notice South Dakota December 31
Maine 30 days after notice Texas 60 days after notice
Massachusetts 30 days after notice Washington Received by Feb15
Michigan 30 days after notice West Virginia 30 days after notice
Minnesota 120 calendar days after
Jan1
Wisconsin November 30

50. More Rapid Changes Impacting Payroll Providers
• On demand pay
• EEO-1 Component 2
• Taxpayer First Act
• Minimum wage federal
• WOTC – permanent
• SSN no match letters Round 2
• Same day ACH $100k / real time
payments
• State mandated sick pay & family
leave
• State changes & issues

51. Sick Pay
•Arizona
•California
•Colorado
•Connecticut
• Maryland
• Massachusetts
•Maine 2021
•Michigan
•Nevada
•New Jersey
•New York 9/30/20
•Oregon
•Rhode Island
• Vermont
•Washington
• Washington DC
•San Francisco, CA
•San Diego,CA
•Emeryville, CA
•Santa Monica, CA
•Los Angeles, CA
•Seattle, WA
•Chicago, IL
•Cook County, IL
•Portland, OR
• New York, NY
•Minneapolis, MN
•Oakland, CA
•Philadelphia, PA
•Pittsburgh, PA
•Spokane, WA
•Montgomery County, MD
•New York City
•Austin , San Antonio
•Westchester
•NJ cities: Jersey City, Newark, Passaic, East
Orange, Paterson Irvington, Trenton, Montclair,
Bloomfield, Plainfield Elizabeth, Morristown
Mandated Sick Pay
STATES LOCALITIES
• North Carolina - 1 hr / 30
worked
• Maryland - several versions
• Minnesota - no specifics
• Pennsylvania - 5 days
annually small bus 3 days
States Considering
Mandatory Sick Pay

52. • Plain language
• Statement saying paycard is not
required
• Fees cannot be charged for access
in full
• A list of places that accept the
paycard
• Acceptance in writing
• 7 day waiting period
New York Paycard Rule in Effect

53. Polling Question #3
Did your company have any reduction in force due to Covid?
a. Yes – Permanently
b. Yes – Rehired or planning to rehire
c. No – No Impact

54. DOL New Exempt/Non-Exempt for 2020
• Salary test - $684 / week
• Highly compensated $107,432
• No changes to Duties Test
 Executive
 Administrative
 Professional
 Teachers & Law & Medicine
 Highly compensated
• Computer professionals
• US territories
• Motion picture industry
• State rules

55. Making the determination:
• Common Law Test
• Reasonable Basis Test
• Consequences of misclassification
• Safe Harbor Section 530
• Uber Lyft (CA)
Employee vs.
Independent Contractor

56. • 1094 & 1095 (employee statements) required TY 2020
• Employer Returns Due Dates:
• 1095-B & 1095-C- March 2, 2021
• Employer Filing:
• Paper- March 1, 2021
• Electronic- March 31, 2021
• States requiring 1095 reporting
• 2020 - NJ (3/31) & DC (6/30)
• TY 2020 - (dates to come) CA, RI, VT
• Pending Legislation:
• Ability to choose spending on FSAs, HSAs, and other
similar tax preferred health accounts by restoring access
to over-the-counter medications
ACA

57. Reporting Requirements
• Any fringe benefit is taxable when….
• Unless the IRS code specifically excludes
Common Reporting Errors
• Moving expenses
• Car allowances
• Parking (excess)
• Commuting (excess)
• Gifts (cash and cash equivalents) – always taxable
Fringe benefit changes

58. Fringe benefit changes
Employee Achievement Awards
• Employee length-of-service/achievement qualify for income exclusion
• Under new definition; cash, cash equivalents, gift cards, gift coupons, or
gift certificates or vacations, meals, lodging, tickets to theater or sporting
events, stocks, bonds, other securities, and other similar items do not
qualify as tangible personal property
Miscellaneous Expenses
• All now taxable: Including unreimbursed business expenses (work use
of personal car)
• TCJA suspends all miscellaneous itemized deductions that are subject to
the 2 percent of adjusted gross income floor
• This change affects un-reimbursed employee expenses such as
uniforms, union dues and the deduction for business-related meals,
entertainment and travel

59. Fringe benefit changes
• Taxpayers can treat membership fees at a fitness facility and gym
classes as medical expenses.
• Personal Health Investment Today Act adds qualified sports and
fitness expenses to qualified medical expenses, including a self-
directed program.
• The amount can’t exceed $500 for an individual taxpayer, or $1,000
for a joint return or head of household.
• Limitations on qualified expenses: Golf, hunting, sailing and riding
wouldn’t be treated as a physical exercise or physical activity.
Qualified sports and fitness expenses don’t include videos, books
or similar materials
Fitness Qualified Medical Expenses

60. Thank you For Attending!!
• Reminder: Updated
slides are on
jimpaille.com.
This Photo by Unknown Author is licensed under CC BY-NC

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Questions?

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How Ascentis Payroll Can Help
Ascentis aims to be our clients HCM partner and provide relevant
information organizations need to be thinking about in order to ensure their
own processes remain current and give our users the power to be the
leaders in their organizations.
With Ascentis Payroll You Can:
• Correctly classify and report all values for both the 941 quarterly &
annual deadlines
• Correctly classify, report, and distribute data on form W2
• Efficiently and effectively complete your payroll process from one
screen
• Customize your payroll system the way your team wants in order
to stay on top of reporting
Recruiting &
Onboarding
Talent
Management
HR &
Benefits
Payroll
Time &
Attendance
Ascentis

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63
Contact Us
info@ascentis.com
www.ascentis.com
800.229.2713