Some Serious Payroll Changes for 2017

Posted by Sue on December 1, 2016 at 1:06 PM

There are quite a few Payroll changes coming in 2017 – and you need to know about two major ones right away. The first is a fairly major change to the due date for employers to file:

  • W-2’s and their accompanying W-3 forms, and
  • 1099’s and their accompanying 1096 forms
In previous years, the deadline has been January 31st for mailing the employee/vendor copy, and then the employer had until the end of March (if you were filing electronically) to file their copies with the Federal Government. The new due date for the employer to get their copies to the Federal Government is now January 31st – regardless of whether you’re filing electronically or not. The IRS has been proposing this change for years, and it actually does make sense. Many employees file their tax returns before the Federal Government can cross check the employee figures with the employer figures. Apparently, the historical two-month delay between the two due dates has resulted in tax fraud and identity theft.

The second major change applies specifically to Oregon employees. The Oregon Legislature passed a bill earlier this year that requires additional information to be on a check stub/direct deposit stub, beginning with any check/direct deposit issued in January, 2017. While most of these things already show on most employees' stubs, there are several new items that are not readily available in Sage 100. We’re using various fields in the system to accommodate the changes, and we can assist you in adding them. The new requirements are as follows, and I've highlighted the items not readily available that you might need our help to add:

  • The date of payment
  • The dates of work covered by the payment (including the beginning period of time and not just the period ending date)
  • The name of the employee
  • The employer’s name and business registry number or business identification number
  • The address and telephone number of the employer
  • The rate or rates of pay
  • Whether the employee is paid by the hour, shift, day, or week or on a salary, piece, or commission basis
  • The employee’s gross wages for the pay period
  • The employee’s net wages for the pay period
  • The amount and purpose of each deduction made during the respective period of service that the payment covers
  • Allowances, if any, claimed as part of minimum wage
  • For non-exempt employees: the regular hourly rate or rates of pay, the overtime rate or rates of pay, the number of regular hours worked and pay for those hours, and the number of overtime hours worked and pay for those hours
  • For employees paid on a piece rate: the applicable piece rate or rates of pay, the number of pieces completed at each piece rate, and the total pay for each rate

Additionally, the Bill creates new requirements to use Direct Deposit Stubs if you deliver them electronically (i.e. via email) to the employee. The employee must expressly agree to receive the statement in electronic format, and the employee must have a way to print the electronic stub. If you do send Direct Deposit Stubs to your employees via email, you will now need to have each employee sign a form that authorizes you to send the stubs electronically.

In other new deadlines, as announced in Notice 2016-70 by the IRS, the due date for furnishing to individuals the 2016 Form 1095-B (Health Coverage) and the 2016 Form 1095-C (Employer-Provided Health Insurance Offer and Coverage) has been extended from January 31, 2017 to March 2, 2017. The deadline for filing Forms 1094-B, 1095-B, 1094-C, and 1095-C with the IRS is February 28, 2017 if filing on paper, or March 31, 2017 if filing electronically. (Last year, the filing dates were extended through June in some cases.)

Finally, here are the new Payroll Tax Rate/Limit Changes for 2017:

  • FICA limit will increase to $127,200.
  • SUTA rates will increase to:
    • Washington – $45,000
    • Oregon – $38,400
  • State of Oregon Worker’s Benefit Fund decreased to $.0140 each per employee and employer (for a total of 2.8 cents) per hour worked.
  • Tri-Met Tax will increase to $.007437.
  • Lane County Transit District Tax will rise to $.0072.
  • Wilsonville Transit Tax remains the same at $.005.
  • 401k limit remains the same at $18,000, with the Catch-Up Contribution at $6,000.
  • FUTA Tax for Oregon and Washington will remain the same at .6% of the first $7,000 paid annually to each employee. Several other states could have a higher FUTA tax rate due to loans those states have with the Federal Government.

Let us know if you have questions, or if you need assistance adding the new information required on check stubs and direct deposit stubs.

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Topics: Sage 100 Payroll, Sue's Views

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