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IRS Releases New Tables for Employee Income Tax Withholding

January 12, 2018 by Anthony E. Antognoli

On January 11, 2018, the IRS issued its new withholding tables to assist employers with processing payrolls and withholding federal income tax under the new Tax Reform Act signed into law late last year (the “Act”).  IRS Notice 1036 establishes the percentage method tables for 2018 income tax withholding with respect to employee wages.  More ›

The Dangers of Reimbursing Employees for Individual Health Insurance Premiums — and the Limited Relief for Small Employers

March 3, 2015 by Anthony E. Antognoli

Prior to the passage of the Affordable Care Act ("ACA") in 2010, employers were able to reimburse their employees for the premiums those employees paid for individual health insurance. This long-standing practice was changed beginning in 2014 with the issuance of new guidance from the Internal Revenue Service and Department of Labor. Under that guidance, such "employer payment plans" are deemed to be noncompliant with the market reforms implemented under the ACA. The penalties for failure to comply with the market reforms can be severe — as much as $100 per employee, per day. More ›

Eighth Circuit Rules Employer paid Disability Payments Constitute Earnings for Purposes of Wage Garnishment

October 22, 2013 by Hinshaw & Culbertson LLP

An employee was injured on the job and as a result could no longer work for her employer and began receiving payments under a disability insurance program paid for by the employer. Sometime after the employee began receiving disability payments, the employee was incarcerated and upon her release, was forced to pay restitution. The Internal Revenue Service sought to garnish these disability payments pursuant to her restitution sentence. The employee challenged this garnishment claiming that the disability payments constituted earnings under the Consumer Credit Protection Act (“Act”) and thus were subject to the limitations that the Act places on the amount of earnings subject to garnishment. More ›

Tax Court Finds Masonry Contractors to be “Employees”

October 29, 2012 by Hinshaw & Culbertson LLP

In this case, the employer, an S corporation that operated a masonry subcontracting business, treated its workers as independent contractors and not employees. The workers were hired on a per-job basis, brought their own tools to the jobs, were free to work for other employers and were paid on a piecework basis in cash. The payments made to the workers were often not adequately recorded and minimal documentation existed. The employer was then selected for an employment tax audit through which the Internal Revenue Service (IRS) determined the workers should have been categorized as employees. As a result it determined the employer owed employment taxes it should have originally withheld, along with penalties and interest on these amounts and penalties for the failure to file returns and remit these amounts. More ›

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