HR pros have two important items to add to their to-do lists this week:
- Ensure that this week’s payroll reflects more generous federal income tax withholding levels mandated by the economic stimulus law enacted in February.
- Start using the new Form I-9 on Friday, April 3.
New withholding tables
The Making Work Pay tax credit is the tax-reduction centerpiece of the stimulus package, officially known as the American Recovery and Reinvestment Act of 2009 (ARRA).
The law provides tax breaks that vary depending on workers’ income and tax filing status. Generally, single taxpayers will get an additional $400 per year in the 2009 and 2010 tax years. Married couples that file jointly will get $800 per year.
Unlike past stimulus initiatives, in which the government sent checks to taxpayers, the ARRA provides more take-home pay by reducing the amount of federal income tax withheld from paychecks.
Employers should begin withholding at the new rates on April 1. The legislation keeps the tax breaks on the books until the end of 2010.
You can download the new withholding tables from the IRS web site.
Note: Your accounting staff or payroll provider should have been on top of this change already. Double-check anyway. Due to heavy news coverage, many employees will expect to see larger paychecks starting this week.
Find more information on the Making Work Pay tax credit (and links to more IRS resources) on our special stimulus page at www.theHRSpecialist.com/stimulus.
Start using new I-9 forms
Unless the Obama administration reverses course in the next couple of days, employers must begin using the new Form I-9 on Friday, April 3. If you're using old paper I-9 forms, reach into your file right now, tear them up and throw them away.
Download the new form here.
Employers were originally told to begin using a new form beginning on Feb. 2, 2009. But then the U.S. Citizenship and Immigration Services (USCIS) announced a two-month delay in order to collect more feedback from employers.
Since 1986, employers have been required to fill out an Employment Eligibility Verification (I-9) form within three days after hiring each new employee. The USCIS issued a revised I-9 in December 2008 and told employers to begin using it on Feb. 2. But when President Obama took office, he put a halt to pending regulations held over from the Bush administration.
What’s new on the new form? First, the revised I-9 makes clear that employees can’t show expired documents as identification.
“The biggest difference in the revised Form I-9 is that all documents presented during the verification process must be unexpired,” says the USCIS. Expired documents, the agency says, are more prone to tampering and fraudulent use.
Plus, the new I-9 again reduces the number of acceptable documents that employees can show for identification and work-authorization purposes. “An expansive document list makes it more difficult for employers to verify valid and acceptable forms and single out false documents compromising the effectiveness and security of the Form I-9 process,” says the USCIS.
U.S. employers must begin using the revised I-9 form—for new hires and to reverify employees with expiring documents—starting no later than April 3. Employers that continue to use the current edition of the I-9 form (dated 06/05/2007) on or after that date may be subject to civil money penalties.
Specifics on the I-9 revisions: The new rule eliminates three documents from the list of approved documents that employees can present to verify both their identity and employment (List A): Forms I-688, I-688A and I-688B (Temporary Resident Card and older versions of the Employment Authorization Card/Document). USCIS no longer issues these cards, and all that were in circulation have expired.
The revised Form I-9 includes additional changes, such as revisions to the employee attestation section, and the addition of the new U.S. Passport Card to List A. The rule also adds to List A foreign passports containing specially marked machine-readable visas and documentation for certain citizens of the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI).
Note: The USCIS Handbook for Employers, Instructions for Completing the Form I-9 (M-274) will be updated to reflect these changes.
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