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Retirement Plan required for CA Employers
Any employer with at least five employees that doesn’t already offer a workplace retirement savings vehicle will be required to either begin offering one via the private market or provide their employees access to CalSavers.
|Size of business||Deadline|
|100< employees||June 30, 2020|
|50< employees||June 30, 2021|
|5+ employees||June 30, 2022|
The CalSavers account is a Roth IRA. The default savings rate is 5% of gross pay, and employees can change their rate at any time. Employees will be auto-enrolled after 30 days and will begin saving through payroll contributions. They can opt out at any time.
Employers serve a limited role: facilitate the program and submit participating employees’ contributions via simple payroll deduction. Employees are responsible for their investment choices. Employers cannot make contributions. There are no fees for employers to facilitate the program.
DOL (Department of Labor) SIMPLE IRA Plans for small business publication:
Most of the information is the same as the IRS, however we noticed this more stringent salary deferral deposit requirement:
For plans with fewer than 100 participants employers can deposit salary eduction contributions with the plan no later than the 7th business day after withholding it to be considered in compliance with the law.
The DOL is the same as described in the IRS publications for employer contributions:
You must make your employer contributions by the due date for filing your business’s Federal income tax return for the year (including extensions, if applicable).
2019 Retirement Plan Limitation highlights:
The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $6,000.
The compensation amount under Section 408(k)(2)(C) regarding simplified employee pensions (SEPs) remains unchanged at $600.
The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts is increased from $12,500 to $13,000. If permitted by the SIMPLE IRA plan, participants who are age 50 or over at the end of the calendar year can also make catch-up contributions. The catch-up contribution limit for SIMPLE IRA plans is $3,000 in 2015 – 2019.
The limit on annual contributions to an IRA, which last increased in 2013, is increased from $5,500 to $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
Year End Center: QuickBooks Online Payroll Full Service
A SIMPLE IRA plan (Savings Incentive Match PLan for Employees) allows employees and employers to contribute to traditional IRAs set up for employees. It is ideally suited as a start-up retirement savings plan for small employers not currently sponsoring a retirement plan.
Giving is a sign of gratitude and appreciation. It’s a common saying that “giving is better than receiving”.
The giver has the benefit of feeling good about blessing someone else, and the recipient has both the benefit of feeling good that giver cares, and also that of the actual gift. Additionally, the recipient may be more helpful to the giver in the future as a result.
It’s a win-win, right? What could go wrong?
Turns out, there’s quite a few landmines and considerations that should be made, especially if you are empowering your team to distribute gifts on behalf of your company.
While we believe the information within is accurate, this is not intended to be specific legal, tax, or accounting advice, or an all-inclusive discussion of issues to consider. We think it’s simply a good starting place to have a further discussion with your attorney and/or your accountant about your specific circumstances.
The high level considerations that come to mind:
A properly written policy that describes the nature and type of acceptable gifts, payments, travel and entertainment, as well as who is authorized to give on behalf of the company, an approval process, and the procedures for recording/reporting is vital. Employees should acknowledge by their signature.
WHO ARE THE GIFTS BEING GIVEN TO?
The legality of giving gifts and any regulations surrounding it should be the primary consideration. The act of giving someone a gift, such as to a government employee (gov’t contractor or someone regulated by the gov’t), may require certain reporting or have limitations depending on gift type type, value, and other factors. It may be illegal to give, and possibly could be considered a bribe to secure favorable treatment, which is a crime.
While possibility not a matter of legality, some organizations’ policies (both public and private ones) may prohibit their employees from receiving certain types of gifts or gifts all-together. Receiving one may be cause for the recipient to loose their job or to be disciplined.
The rules for tax compliance by the giver vary depending on if the recipient of the gift is a customer, vendor, or an employee.
WHAT TYPES OF GIFTS ARE BEING MADE?
Different types of gifts have different tax-deductability and reporting requirements. We relied on 2017 IRS Publication 463 for this next information.
Some gifts are considered an entertainment expense and are subject to those limitations. For tax year 2018, entertainment expenses are not tax-deductible.
Any item that might be considered either a gift or entertainment generally will be considered entertainment. However, if you give a customer packaged food or beverages you intend the customer to use at a later date, treat it as a gift. A meal that is purchased for the customer when the payer is not present is not considered a tax-deductable meals expense, but may be considered a gift or entertainment depending on the circumstances.
Gifts that are not considered an entertainment expense, the tax-deductability is limited to $25 per recipient during the giver’s tax year as a Gift expense deduction. There are specific guidelines about who’s considered a recipient. There are also a few exceptions to note.
Gifts to employees have additional considerations. We relied upon 2018 IRS Publication 15-B for these considerations. There are lots of rules here. But the main theme is: Any fringe benefit you provide is taxable and must be included in the recipient’s pay unless the law specifically excludes it.
There are a number of exclusion rules that exclude all or part of the value of certain benefit from recipient’s pay. Cash, cash equivalents, gift cards, gift certificates, and the like are generally are not excluded and must be included in the recipient’s pay.
The exclusions from pay that are closely related to our topic of gifts:
HOW ARE THE TRANSACTIONS BEING RECORDED?
It’s very important that a set of systems, processes, and procedures be thoughtfully created so that the giver records all of the relevant information about the gifts given and provides that to the person responsible for compliance, accounting, and oversight purposes.
I have news to share regarding the issues we’re seeing out of those bank connections. Wells Fargo has reported that users are currently unable to download CSV transaction files from their website if the person is aSecondary(orDelegate) user. Any files obtained are blank and contain no transactions. At this time, only thePrimary user on the bank’s website can download transnational data with success.
This might help explain the issues certain QuickBooks Desktop users are still facing. TheWebConnectprocess utilizes a set of bank credentials to obtain transactions directly from the bank’s website via CSV file. If the Primary contact isn’t used for this, no transactions can be downloaded.
For QuickBooks OnlineandSelf-Employedusers, this will result in anError 102when trying to update the bank connection. Our Engineering team is actively working with Wells Fargo to resolve the issue. They’ve provideda status pagewhere you can find more information about the error as well as a time frame for a solution. Updates will be posted directly at the link in addition to here in the thread as they become available.
What should I do in the meantime?
Is this issue related to the Error 105/Reversed transactions I was receiving last week?
To those affected by the error, I know this time is important and we’re working tirelessly to get you back to business without any further delay. I greatly appreciate each of you that have taken time to share your concerns with the Community. Thanks everyone, stay tuned for further information.