January 23, 2018 Minnesota 2018 income tax withholding guide, tables and computer formula released, 2017 Forms W-2 and 1099 filing reminders The Minnesota Department of Revenue has released the 2018 withholding tax guide, computer formula and wage-bracket withholding tables to its website. The annual computer formula in effect for wages paid on and after January 1, 2018 is shown on page 2. As we reported earlier this year, HF1 changed the deadline for employers to submit Forms W-2 to the state Department of Revenue to January 31, effective with calendar year 2017 Forms W-2 due in 2018. As a result, the deadline to file 2017 Forms W-2 with the Department is January 31, 2018. Supplemental withholding rate for 2018 The supplemental rate of income tax withholding is unchanged at 6.25% (.0625). Overtime, commissions, bonuses and other supplemental payments. Supplemental payments made to an employee separately from regular wages are subject to the 6.25% Minnesota withholding regardless of the number of withholding allowances the employee claimed. Multiply the supplemental payment by 6.25% (.0625) to calculate the Minnesota withholding. If you make supplemental payments to an employee at the same time you pay regular wages and you list the two payments separately on the employee's payroll records (regardless of whether you list the amounts separately on the paycheck), choose one of the following methods to determine how much to withhold: Method 1. Add the regular wages to the supplemental payment and use the tax tables to find how much to withhold from the total. Method 2. Use the tax tables to determine how much to withhold from the regular wages alone. Multiply the supplemental payment by 6.25% (.0625) to determine how much to withhold from that payment. If you do not list the regular wages and the supplemental payment separately on the employee's payroll records, you must use Method 1. Backup withholding Minnesota follows the federal provisions for backup withholding on nonwage payments for personal services. Personal services include work performed for your business by a person who is not your employee. If the person performing services for you does not provide a Social Security or tax ID number or if the number is incorrect, you must withhold tax equal to 9.85% (.0985) of the payment(s). If you do not, you may be assessed the amount you should have withheld. The assessment is subject to penalty and interest. Minnesota income tax withholding computer formula Effective January 1, 2018
Recently enacted legislation makes changes to certain filing deadlines In addition to accelerating the Form W-2 deadline to January 31, HF1 also repealed the statutory requirement to submit Forms W-2 electronically if submitting 10 or more forms and instead authorizes the commissioner to determine the content, format, and manner in which employers submit Forms W-2. However, the threshold remains at 10 or more forms for calendar year 2017, due January 31, 2018. The due date for Form ETA, Nonresident Entertainer Tax Promoter's Annual Reconciliation, is also now January 31. Effective with returns filed after December 31, 2017, the law eliminates the requirement that employers submit an annual withholding tax reconciliation because the Department is able to electronically identify discrepancies in withholding accounts without the need for a separate return. Effective with returns filed after December 31, 2016, employers may file withholding tax returns on an annual basis, rather than quarterly, if the employer's annual withholding liability is $500 or less or if a newly eligible employer is projected to remit $500 or less on an annual basis. The annual withholding return for calendar year 2017 is due on January 31, 2018. Electronic filing of Forms W-2 for calendar year 2017 For the filing of Forms W-2 and 1099 with Minnesota withholding for calendar year 2017, employers filing 10 or more Forms W-2/1099 are required to file electronically by January 31, 2018. Fact Sheet 2 for Form W-2 filing is available here. Fact Sheet 2a for Form 1099 with Minnesota withholding filing is available here. Also, the Department only requires that Forms 1099 be filed if the form shows Minnesota withholding. The Department is not following the federal requirement that Forms 1099-MISC showing nonemployee compensation in box 7 be filed. For more information on Minnesota withholding tax, see the Department's website. ———————————————
——————————————— EY Payroll News Flash
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