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In this issue:

  • CFS Payroll now supports the HIRE Act.
  • Arizona employers must make changes to calculate employee withholding effective July 1, 2010.
  • Form 5500-EZ released by the IRS
  • Earn vouchers and other discounts by renewing now

CFS Payroll now supports the HIRE Act.
Some of the changes and user requirements are highlighted below. For more complete information, see "HIRE Act" in the program help index.

1. Qualified employees must sign an affidavit. Form W-11 has been added to the General Forms section for this purpose.

2. Qualified employees must be marked on the Employee Information screen. Enter wages on the payroll grid. In order for FIRST quarter wages to be credited properly, they MUST be entered for the actual pay date. This is because only wages paid after March 19, 2010 qualify for the credit. If the user enters only a first quarter summary number on March 31, then the program cannot properly allocate the amounts paid before March 19 when importing to Form 941.

3. Form 941 (rev. 4-2010) has been updated for the second quarter. It includes fields to enter the social security wages of HIRE Act qualified employees. The second quarter return is also used to get credit for first quarter wages paid from March 19 through March 31. Those wages are used to calculate the credit on the form. Data can be imported to the form and social security wages of HIRE Act qualified employees will be imported to the appropriate fields. As explained above, first quarter wages must be entered on the actual pay date in order to receive proper credit for the period March 19 through March 31, 2010.

4. The 941/940 Summary Report has been modified to display the HIRE Act credit. A HIRE Act Employee List report has been added to the Custom Employer/Payee reports list.

Arizona employers must make changes to calculate employee withholding effective July 1, 2010.
Arizona withholding was previously calculated as a percentage of federal withholding. Effective 7/1/2010, Arizona withholding is to be calculated as a percentage of taxable wages. 

Users of Live Payroll and the Paycheck Withholding Calculator must remove the entry in the state withholding percentage of federal withholding field for each employee and make the appropriate entry in the state withholding percentage of pay field. 

See Arizona's website for further information.

Form 5500-EZ released by the IRS
Form 5500-EZ for 2009 was released by the IRS and has been updated in TaxTools 2010.  Form 5500-EZ is the only form in the 5500 series supported by CFS.  Unlike prior years, Form 5500-EZ no longer has a 2-D barcode containing form data and the form is not scannable.  All other forms in the 5500 series are part of the EFAST2 system and must be filed electronically.  Taxpayers needing to complete those forms can do so online at the Department of Labor's website.  The following information is from the DOL's frequently asked questions.
 
All pension and welfare plans and DFEs that are required to submit an annual return/report under Title I of ERISA (Form 5500 or Form 5500-SF) must do so electronically for plan years beginning on or after January 1, 2009. Beginning January 2010, an all-electronic system called EFAST2 will receive those electronic annual returns/reports. Once the EFAST2 electronic system is online and ready to receive filings, you must file the Form 5500 or Form 5500-SF electronically through EFAST2 for plan/reporting year 2009 and for subsequent plan/reporting years. Prior year delinquent or amended Form 5500 annual return/reports generally must be filed electronically through EFAST2.

The Form 5500-EZ cannot be submitted electronically. A “one-participant” plan (see the instructions for the Form 5500-SF) that is eligible to file Form 5500-EZ and is not required to file under Title I of ERISA may elect to file Form 5500-SF electronically with EFAST2 rather than filing a Form 5500-EZ on paper with the IRS. Such a “one-participant plan” that is not eligible to file Form 5500-SF must file Form 5500-EZ on paper with the IRS. For more information on filing the Form 5500-EZ, see the instructions for Form 5500-EZ, go to www.irs.gov, or call 1.877.829.5500.

Earn vouchers and other discounts by renewing now
If you renew your software and paper supplies by August 31st, we'll give you a $5 voucher for each program renewed and a 15 percent discount off of your supplies.

Vouchers can be applicable to next year's renewal notice. Tax return folders are available to ship now, and forms will be shipping this summer.  Renew now and save!

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