IRS Mileage Rate Increase June 2011

Info listed below from the AMERICAN PAYROLL ASSOCIATION 

IRS Announces Mid-Year Mileage Rate Increase of 4.5 Cents
The IRS has announced an increase in the optional standard mileage rates for the final six months of 2011.  Citing "recent gasoline price increases," the IRS has increased the standard business mileage rate from 51 cents to 55.5 cents a mile for all business miles driven from July 1 through December 31, 2011. The rate for deductible medical or moving expenses is increased from 19 cents to 23.5 cents a mile. Note: The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.
The mileage rate may be used to compute the deductible cost of operating a passenger car (also vans, pickups, or panel trucks) for business purposes. It may also be used by employers to reimburse employees for business use of their personal vehicles and to determine the amount that needs to be imputed to an employee's income for personal use of certain company-owned or leased nonluxury vehicles.

Mileage Rate Changes


Purpose              Rates 1/1 to  6/30/11       Rates 7/1 to   12/31/11

Business                               51                                         55.5

Medical/Moving                19                                         23.5

Charitable                            14                                         14

FLORIDA'S MINIMUM WAGE

This article is from Florida's Agency for Workforce Innovation

The Florida minimum wage is $7.31 per hour, effective June 1, 2011. Florida law requires the Agency for Workforce Innovation to calculate an adjusted minimum wage rate each year. The annual calculation is based on the percentage change in the federal Consumer Price Index for urban wage earners and clerical workers in the South Region for the 12-month period prior to September 1, 2010.

On November 2, 2004, Florida voters approved a constitutional amendment which created Florida's minimum wage. The minimum wage applies to all employees in the state who are covered by the federal minimum wage.

Employers must pay their employees the hourly state minimum wage for all hours worked in Florida. The definitions of "employer", "employee", and "wage" for state purposes are the same as those established under the federal Fair Labor Standards Act (FLSA). Employers of "tipped employees" who meet eligibility requirements for the tip credit under the FLSA, may count tips actually received as wages under the Florida minimum wage. However, the employer must pay "tipped employees" a direct wage. The direct wage is calculated as equal to the minimum wage ($7.31) minus the 2003 tip credit ($3.02), or a direct hourly wage of $4.29 as of June 1, 2011.

Florida Statutes require employers who must pay their employees the Florida minimum wage to post a minimum wage notice in a conspicuous and accessible place in each establishment where these employees work. This poster requirement is in addition to the federal requirement to post a notice of the federal minimum wage.

PER WILL BE SENDING ALL CLIENTS IN FLORIDA AN UPDATE TO THEIR LABOR LAW POSTER. PLEASE LOOK FOR THIS UPDATE IN YOUR PAYROLL ENVELOPE.

What's New in 2011?

ADVANCE PAYMENTS OF EARNED INCOME TAX CREDIT ELIMINATED:
Effective 1-1-11
The Education Jobs Act eliminated advance payments of the EITC in 2011, which means there is no w-5 form to file for advance payments. EITC still exists, however, you must wait to claim this credit until your year end tax filing.


SOCIAL SECURITY TAX LOWERED (EMPLOYEE ONLY)
Effective your first check in January 2011, Social Security taxes will drop to 4.2% from 6.2%. If you have a job--and are paid correctly in regards to your pay being reported to the government,-- this provision will increase your take-home pay by 2% of your gross wages!
This withholding will have no effect on employee's future Social Security Benefits.

Refer to http://www.irs.gov/ for more information on the social security tax changes.

H.I.R.E. Act

Two new tax benefits are now available to employers hiring workers who were previously unemployed or working less than 40 hours. These provisions are part of the Hiring Incentives to Restore Employment (HIRE) Act.

Does this apply to you as a PER client? YES it does!

SUMMARY: This legislation is an incentive for businesses to hire people who are currently unemployed. In return, employers will receive a credit for the employer portion of Social Security taxes (6.2%). In addition, employers’ may receive an additional credit on their next years tax return if the employee stays 52 or more weeks.

DETAILS: Employers who hire unemployed workers this year after February 3, 2010 and before
January 1, 2011 may qualify for a 6.2 % payroll tax incentive. This means employers will be relieved from paying the employer’s share of social security taxes on wages paid to these workers beginning April 1, 2010). Following are additional facts to be considered in defining a qualified employee:

Employee must have worked LESS than 40 hrs during the 60 days prior to hire date
Employee must not replace a current employee (unless that employee was separated from employment voluntarily or for cause.)
Employee must not be related to the employer or directly or indirectly own more than 50% of the business
Employee may be previously laid-off employee

On the back of this notice you will find a sample of the new Federal Form W-11 provided by the IRS. In order for you to claim HIRE Act benefits, you must verify that the new hire is a “qualified employee”, and have them complete and sign the Form W-11. PER will provide you with a supply of these forms through payroll delivery. Include the completed Form W-11 with current new hire paperwork and forward to PER through standard new hire procedures.

If you have a qualified employee or employees that you will receive the employer credit on Social Security taxes (6.2%), you will simply NOT be billed the employer social security portion when payroll is processed.

Please feel free to call our offices if you would like more information regarding the HIRE Act, or have any additional questions at 407-599-4990