We have prepared this list of year-end reminders for you. If you would like us to prepare 4th quarter payroll reports, reconciliations & W-2s, please provide the wage information no later than January 9, 2023. This will ensure all W-2’s are provided to your employees by the January 31, 2023 deadline.
W-2’s and Wages
- For 2022 W-2’s issued, employer sponsored health care benefit reporting is optional for employers with less than 250 employees. If you have more than 250 employees, you are required to include the aggregate value of employer sponsored health care coverage benefits on all applicable W-2 forms. For those employers required to report this, you should include this in Box 12 with code DD.
- Effective January 1, 2023 the Ohio minimum wage will increase to $10.10 per hour for non-tipped employees and $5.05 per hour for tipped employees. Federal minimum wage is currently $7.25 applicable for Ohio employers who have gross receipts under $372,000.
- Personal use of company vehicles by employees is required to be included in W-2 reporting. Vehicle use reports will be sent separately. If you didn’t receive one, please contact us.
Insurance Premiums and HSA Accounts
- Premiums on group-term life insurance must be included in employee’s wages for the coverage that exceeds $50,000 on any employee. If you need assistance with this calculation, please contact either one of our offices.
- Health insurance premiums paid during 2022 for shareholders in an S corporation MUST be included in wages of shareholders who own more than 2% of the corporation. This is a target area of enforcement for the IRS.
- The 2023 HSA account limits have increased. The single coverage contribution limit is $3,850 and the family coverage limit is $7,750 for 2023. For those individuals that are 55 years or older, the additional catch up contribution is $1,000.
Medicare Wages and Taxes
For 2023, the social security wage base increases to $160,200. Medicare wages continue to have no ceiling. The employee’s social security tax rate for 2023 remains at 6.2% and the Medicare tax rate remains at 1.45%. The employer’s social security rate and Medicare rate remain at 6.2% and 1.45%, respectively. Employers are responsible for withholding an additional .9% of Medicare tax on an employee’s compensation in excess of $200,000 in a calendar year.
- Federal unemployment taxes (FUTA) must be paid quarterly when your liability exceeds $500. The wage base remains at $7,000 for 2023. The net FUTA tax rate for Ohio employers is .6% (.006%) for 2023. (The gross rate is 6.0% but Ohio employers receive a credit reduction of 5.4% so the net FUTA tax rate for 2022 is .6%.) This credit is only available to employers who pay their STATE unemployment taxes on a timely basis.
- The 2023 Ohio unemployment taxable wage base remains the same at $9,000 per employee.
Remember to report all newly hired employees to Ohio New Hire Reporting Center @ www.oh-newhire.com. The definition of a new hire includes some independent contractors. If you are not sure who to include, please call us. There is a $25 fine for each failure to provide this information.
The federal mileage rate for 2023 has not been released yet. You can find the rate at https://www.irs.gov/tax-professionals/standard-mileage-rates.
If you would like help reviewing workers’ compensation programs and groups, please call us. We have a staff expert in group rating of workers’ compensation rates.
This is an overview of items we feel are important as you start 2023. If you have questions or need more information on these or any other payroll topics, please contact us and we can provide more detailed information.
Treasury Circular 230 Disclosure
Unless expressly stated otherwise, any federal tax advice contained in this communication is not intended or written to be used, and cannot be used or relied upon, for the purpose of avoiding penalties under the Internal Revenue Code, or for promoting, marketing, or recommending any transaction or matter addressed herein.