Knowledge Resources
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Tax Updates
State Tax Conformity to IRC
As of February 2018, there are 20 US states that do not follow – or conform to – recent changes to the Federal Internal Revenue Code (IRC). Two states do not reference the IRC and the remainder follow the IRC as of a date prior to the recent Tax Cuts and Jobs Act of 2017, thus treating qualified moving expenses paid in 2018 as excluded from compensation reporting or deductible by the employee. Those states are: Arizona, Arkansas, California, Georgia, Hawaii, Idaho, Indiana, Iowa, Kentucky, Maine, Massachusetts, Minnesota, Mississippi, New Jersey, North Carolina, Oregon, South Carolina, Virginia, West Virginia, and Wisconsin.
2018 Supplemental Rate
The IRS released today the updated 2018 withholding tables which include a decrease in the 2018 supplemental rate from 25% to 22%. The withholding tables must be implemented by February 15, 2018, however, employers are encouraged to start using them as soon as possible. Employees will begin to see the effects of the new tax laws in their paychecks in February.
See Our Complete List of Tax Updates
State Tax Conformity to IRC
As of February 2018, there are 20 US states that do not follow – or conform to – recent changes to the Federal Internal Revenue Code (IRC). Two states do not reference the IRC and the remainder follow the IRC as of a date prior to the recent Tax Cuts and Jobs Act of 2017, thus treating qualified moving expenses paid in 2018 as excluded from compensation reporting or deductible by the employee. Those states are: Arizona, Arkansas, California, Georgia, Hawaii, Idaho, Indiana, Iowa, Kentucky, Maine, Massachusetts, Minnesota, Mississippi, New Jersey, North Carolina, Oregon, South Carolina, Virginia, West Virginia, and Wisconsin.
2018 Supplemental Rate
The IRS released today the updated 2018 withholding tables which include a decrease in the 2018 supplemental rate from 25% to 22%. The withholding tables must be implemented by February 15, 2018, however, employers are encouraged to start using them as soon as possible. Employees will begin to see the effects of the new tax laws in their paychecks in February.
Subject Matters
The Virtues of Cost Estimates – Reducing the Unexpected
International and domestic assignments and transfers can result in unexpected financial pitfalls to the corporate employer with a mobile workforce. A prime example is a tax incurred by the employee, possibly even after an assignment has been concluded. Such unexpected outcomes confront a company with difficult decisions. Does the employer or the employee absorb the cost? If the employer, which entity – host or home – is responsible? Is the host entity still in existence to pay the tax invoice or will the home entity be saddled with the expense? These decisions have real ramifications, including negative impact on a company’s fiscal year profit, a large reduction in the employee’s expected compensation, and reputational damage to the assignment program – the ultimate talent management nightmare.
The Virtues of Cost Estimates – Reducing the Unexpected
International and domestic assignments and transfers can result in unexpected financial pitfalls to the corporate employer with a mobile workforce. A prime example is a tax incurred by the employee, possibly even after an assignment has been concluded. Such unexpected outcomes confront a company with difficult decisions. Does the employer or the employee absorb the cost? If the employer, which entity – host or home – is responsible? Is the host entity still in existence to pay the tax invoice or will the home entity be saddled with the expense? These decisions have real ramifications, including negative impact on a company’s fiscal year profit, a large reduction in the employee’s expected compensation, and reputational damage to the assignment program – the ultimate talent management nightmare.