Expert Newswire

New AZ Withholding structure result in a 5.9% increase in SWT deductions

Tue, 13 Jul 2010 15:58:00 GMT

As all employers and most employees are now aware, effective July 1, 2010 the state of Arizona has changed how state withholding (SWT) taxes are calculated. For many years the SWT was based on a rate that each employee elected as a percentage of the employee’s Federal Withholding Tax (FWT). Employees could have elected a high percentage rate for SWT so that they did not come up short when they filed their annual tax return but if their FWT deduction was low (FWT is calculated using tables and is based on the gross pay amount, marital status, exemptions and pay frequency), they might have had little or no SWT deducted from their paycheck.   The new SWT calculation is based directly on Gross Wages not FWT, so employees that have elected a rate other than zero will now see State Withholding on their check where they may not have in the past.

The figures are based on a sampling of 225 AZ based companies of varying size and approximately 7,000 employees and 23,440 paychecks. They include non-exempt (hourly) and exempt (salaried) employees and both white and blue collar employees (professional law firms as well as manufacturing).
Here is what we found:

1.   Overall the paycheck SWT has increased by approximately 5.9%

2.   For employees with gross pay up to $500.00 the SWT rate went up 504% from 0.4% to 2.04% (most employees had no SWT under the old percentages and most had SWT under the new).

3.   For employees with gross pay from $500.01 to 1500.00 the SWT rate went up 106% from 1.31% to 2.69%

4.   For employees with gross pay from $1500.01 to 3000.00 the SWT rate went up 117% from 2.66% to 3.10%

5.   For employees with gross pay from 3000.01 – 10,000.00 the SWT rate went down 20% from 4.15% to 3.36%.

Conclusion: I wasn’t able to find the exact 2009 SWT figure but at an estimated $3bb the net increase would be $117mm. Those most impacted are low wage earnings, most of which had little or no SWT deducted under the old method almost all have some deductions under the new rule. The increases are lower as the wages go up until you see a slight decrease for the highest wage earners.
The overall increase against claims that the state will be issuing I.O.U’s for 2010 refunds paints an interesting picture?

Jason Roth, President, Payroll Experts LLC

Jobs Bill

Thu, 18 Mar 2010 22:06:00 GMT

NEW YORK (CNNMoney.com) -- Amid much fanfare at the White House, President Obama signed his first job creation bill Thursday.

The $17.6 billion measure calls for tax breaks for businesses and additional infrastructure spending with the hope of boosting employment.

This is the first jobs legislation to hit the president's desk since he trumpeted the need to spur hiring during January's State of the Union address. It took weeks to get the bill through Congress. However, it is viewed by some lawmakers, economists and business leaders as relatively small and ineffective.

The legislation will:

-- Exempt employers from Social Security payroll taxes on new hires who were unemployed.

-- Fund highway and transit programs through 2010.

-- Extend a tax break for business that spend money on capital investments, such as equipment purchases.

-- Expand the use of the Build America Bonds program, which helps states and municipalities fund capital construction projects.

The bill is a slimmed down version of an $85 billion bipartisan measure crafted by the Senate Finance Committee last month. Senate Majority Leader Harry Reid, D-Nev., stripped out these four measures and put them into a separate bill, saying he hoped lawmakers would approve it more quickly. It passed the Senate on Feb. 24.

However, it then had to go to the House, which added two provisions to pay for the infrastructure spending and corporate tax breaks. Its amendments require foreign financial institutions to give the Internal Revenue Service more information to help it catch tax cheats, and delays a tax break for foreign interest payments. The House sent it back to the Senate in early March.

Meanwhile, the House on Wednesday passed a bill that would extend the deadline to file for unemployment benefits by one month, through May 5, and several other expiring provisions through April 30.

Job creation focusWe do not currently know how the mechanics of the credits will work. The IRS will release the details about how to determine if an employee had been unemployed for the 2 month requirement and how exactly to take advantage of the credits. As soon as these details are released we will inform our community……

The president and lawmakers have vowed to push measures that will spur job creation, as the economy continues to lose jobs and the unemployment rate stubbornly remains at 9.7%.

"It is the first of what I hope will be a series of jobs packages that help to continue to put people back to work all across America," Obama said after the bill's passage.

But the initiatives are having a tough time getting through Congress. Wednesday's jobs measure has been criticized as having little bang for the buck.

The centerpiece of the legislation is a hiring tax credit crafted by Senators Chuck Schumer, D-N.Y., and Orrin Hatch, R-Utah. The bill spares businesses from paying Social Security taxes on new hires who had been unemployed for at least 60 days. This tax, which comes to 6.2%, could save companies a maximum of $6,621.

Companies who retain these new employees for a year can claim an additional credit of the lesser of $1,000 or 6.2 percent of the wages paid to the employee in 2010. The measure's estimated cost is $13 billion over 10 years.

Some economists say the credit will prompt the hiring of 300,000 workers, while others say it will only help at the margin because companies won't hire unless they see an increase in demand, regardless of tax incentives.

Additional initiatives being considered include giving more tax breaks to companies and funneling more money to the states, which are contemplating big spending cuts to balance their budgets. Others, however, are concerned that these measures will only add to the sky-high federal deficit. Democrats countered that the legislation is fully paid for.

Meanwhile, the deadline to apply for extended unemployment benefits runs out in coming weeks. The House has to consider a roughly $140 billion bill that would push back the deadline until year end, extend a bevy of expired tax measures and send the states $25 billion to help fund its Medicaid obligations.

In the House, several jobs bills are forming, while Senate Democratic leaders say their next jobs initiative will be targeted at small businesses.

"This is just the first, certainly not the last, piece of legislation we will put forward," Schumer said.

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We do not currently know how the mechanics of the credits will work. The IRS will release the details about how to determine if an employee had been unemployed for the 2 month requirement and how exactly to take advantage of the credits. As soon as these details are released we will inform our community…… Jason Roth, CPP - Payroll Experts

COBRA Subsidy Extension

Thu, 24 Dec 2009 15:18:00 GMT

The Congress passed legislation (H.R. 3326) extending the original federal COBRA subsidy created by the American Recovery and Reinvestment Act of 2009 (ARRA) and President Obama signed into law on Saturday, December 19, 2009.

BASIC COBRA Administration
Please note, more information will follow regarding how BASIC will administer this change. We are holding a webinar on January, 13, 2010 at 1-2 p.m. EST. You can register at http://www.basiconline.com/ or through this link.

Background
Under the ARRA, the federal government pays sixty-five (65%) percent of COBRA premiums for up to nine (9) months for employees who were involuntarily terminated between September 1, 2008, and December 31, 2009. This subsidy was set to expire at the end of this year and has already started to end for individuals who have been receiving this subsidy since March.

New Extension
Assistance-eligible individuals ("AEIs") involuntarily terminated from employment on or before February 28, 2010, can now receive the subsidy. The subsidy will remain at sixty-five 65% percent of the premium, but the maximum subsidy period will expand from nine (9) months to fifteen (15) months. Only those individuals losing health coverage due to involuntary employment termination will continue to qualify for the COBRA subsidy. The following is a summary of the new law:

New Extended Eligibility Period
AEIs involuntary terminated on or before February 28, 2010 will now be eligible for the subsidy, instead of December 31, 2009. The new law eliminates the requirement that COBRA coverage must commence before COBRA subsidy sunset date (December 31, 2009 before the new law is effective and February 28, 2010, after). Eligibility for the COBRA subsidy will only be conditioned on a qualifying event occurring on or before February 28, 2010, without regard to when the COBRA coverage period begins. This means that AEIs involuntarily terminated on or before December 31, 2009, who become eligible for COBRA coverage after December 31, 2009 will now be COBRA subsidy eligible. This new law reverses earlier guidance (IRS Notice 2009-27, Q/A-10).

Longer Subsidy Period
The maximum COBRA subsidy period has been extended from nine (9) months to fifteen (15) months. Please remember that the new law does not change the maximum COBRA period that an individual is entitled to under COBRA or state continuation.

Notices For Those Who Exhausted Their COBRA Subsidy
Any AEI who exhausted their original nine (9) month COBRA subsidy period before the new law takes effect can receive the COBRA subsidy for another six (6) months if they remain an AEI and their maximum COBRA period has not ended. AEIs who either dropped their COBRA coverage or kept their COBRA coverage but paid the full unsubsidized premiums must be notified that they may pay reduced premiums for retroactive coverage or receive credit for or reimbursement of overpayment. These notices must be provided within sixty (60) days of the AEI dropping or first overpaying for COBRA. Such AEI must pay for coverage no later than sixty (60) days after enactment (December 19, 2009) or February 17, 2010 (or if later, thirty (30) days after the notice was provided).

Other Notice Requirements
Anyone eligible for the COBRA subsidy or terminated from employment (voluntarily or not) on or after October 31, 2009 must be provided with a notice describing the revised program within sixty (60) days of the law's enactment (December 19, 2009) or February 17, 2010 or, if later, the usual deadline for furnishing materials to individuals experiencing a COBRA qualifying event.

Year-End Reporting & Taxation of Fringe Benefits

Mon, 23 Nov 2009 23:45:00 GMT

Under IRC 61 gross income is defined as “…all income from whatever source derived, including (but not limited to) compensation for services, including fees, commissions, fringe benefits, and similar items…” IRS Regulations 1.61-1 further explains that “…gross income means all income from whatever source derived unless excluded by law. Gross income includes income realized in any form, whether in money, property or services. Income may be realized, therefore, in the form of services, meals, accommodations, stock, or other property, as well as cash.” These definitions mean that all employee compensation, provided in whatever form, is taxable unless the IRC has deemed the compensation to be not taxable. In general, the same guidelines apply to withholding income, social security, and Medicate taxes. IRS Publication 15-B has a complete discussion on taxation of fringe benefits:

o   Accident and Health Benefits: Contributions employer makes to an accident or health plan for an employee.

o   Achievement Awards: The value of any tangible personal property employer gives to an employee as an award for either length of service or safety achievement.

o   Adoption Assistance: It benefits employees who qualify under rules set up by employer, which do not favor highly compensated employees or their dependents. To determine whether your plan meets this test, refer to Publication 15-B.

o   Athletic Facilities.

o   De Minimis (Minimal) Benefits.

o   Dependent Care Assistance

o   Educational Assistance.

o   Employee Discounts

o   Employee Stock Options

o   Group-Term Life Insurance Coverage.

o   Health Savings Accounts

o   Lodging on Your Business Premises

o   Meals

o   Moving Expenses Reimbursements

o   Retirement Planning Services

o   Transportation (Commuting) Benefits.

o   Tuition Reduction.

o   Volunteer Firefighter and Emergency Medical Responder Benefits.

o   Working Condition Benefits

Supplemental Wage Payments

Some employers pay special payments throughout the year that are not part of their employee’s regular wages. If these wages are combined with the regular wages, the federal income tax required to be withheld as “supplemental wages” could be higher than the standard amount. So, the IRS defines these wages. They may be paid at the same time as regular wages or at any other time. The IRS issued final regulations in July 2006 to determine the method and amount of income tax withholding on supplemental wages including the new, higher flat rate applied to supplemental wages exceeding $1 million in a calendar year. These final regulations apply to payments made on or after January 1, 2007. Examples of Supplemental Wages: Commissions Paid at Fixed Intervals with no Regular Wages Paid to the employee, Commissions Paid at Fixed Intervals in Addition to Regular Wages Paid at Different Intervals, Draws Paid in Connection with Commissions, Commissions Paid to the Employee Only When the Employee’s Accumulated Commission Credit Reaches a Specific Numerical Threshold, Signing Bonus Paid to the Commenced of Employment, Severance Pay Paid After the Termination of Employment, Lump Sum Payment of Accumulated Annual Leave, Annual Payments of Vacation and Sick Leave, Sick Pay Paid at a Different Rate than Regular Pay.

Qualified Moving Expense Reimbursements.

Employer reimbursements for an employee’s moving expenses are treated as fringe benefit excludable from the employee’s gross income and wages if: the expenses would be deductable by the employee if he or she had directly paid or incurred the expenses, and the employee did not deduct the expenses in a prior year. In addition, the reimbursements should be made under rules similar to those relating to an accountable plan. If the plan does not meet the accountable plan rules for business travel expense, then all reimbursements must be included in the employee’s income.

Personal Use of Company Cars

Although the business use of a company-owned vehicle is excluded from taxable income (based on the employee’s documentation of the business use), the personal use of the company vehicle is taxable compensation. The employer may elect not to withhold federal income tax on the personal use of the vehicle, but federal wages must be reported and social security and Medicare taxes must be withheld on the value of personal use.

Group Term Life Insurance/Imputed Income.

Employer-provided group-term life insurance coverage with a value of $50,000 or less is a tax-free benefit to the employee if it is provided in a nondiscriminatory fashion. The value of the coverage in excess of $50,000, less any employee after-tax payroll deductions, is taxable income. The employer is not required to withhold federal income tax on the taxable group-term life insurance, but the value is subject to federal taxation and must be reported on the employee’s Form W-2 as “other compensation”. The amount of benefit to be taxed is based on the amount of insurance and the employees age.

Age	Monthly rate/thousand	Annual rate/thousand
25-	0.05	0.60
25-29	0.06	0.72
30-34	0.08	0.96
35-39	0.09	1.08
40-44	0.10	1.20
45-49	0.15	1.80
50-54	0.23	2.76
55-59	0.43	5.16
60-64	0.66	7.92
65-69	1.27	15.24
70+	2.06	24.72
*Rates should be calculated by the amount of total insurance coverage in excess of $50,000 per year*

Congratulations Payroll Experts, 2009 Sterling Award Finalist!

Wed, 21 Oct 2009 22:26:00 GMT

Payroll Experts is thrilled to announce that we have been named a finalist for the prestigious 2009 Sterling Award in the category of Small Business. In its 24th year, the Sterling Awards continue to honor our city’s best corporate neighbors and brightest rising stars. The Sterling Award, Small Business category recognizes a company that demonstrates success through product or service innovation, quality and professionalism, and has made contributions to community-oriented projects. We are extremely honored to be named as a finalist, as the process for being selected began with a rigorous application, which was reviewed along with all other Small Business category applications, by a panel of four judges who narrowed our field down to the three finalists. The judging team then visited Payroll Experts and the two remaining finalists to conduct a personal interview and get a behind-the-scenes look at our operations. With that step complete, each judge will independently cast a set of points for the finalists based on our embodiment of the award criteria. The winner will be announced at the Sterling Awards Banquet Thursday, November 12th. We would like to extend a special thanks to our clients who graciously offered up their kind words to be used in our presentation. Your testimonials definitely wowed the judges and brought a smile to all of our faces. Thank you all for your support and for being a part of the Payroll Experts' family!

2010 Social Security Wage Base and FICA Tax Rate

Wed, 21 Oct 2009 22:27:00 GMT

AMERICAN PAYROLL ASSOCIATION
Compliance Update

Social Security Wage Base Remains at $106,800 in 2010 The Social Security Administration (SSA) announced on Thursday, October 15, 2009, that the 2010 social security wage base will be $106,800, unchanged from 2009. As in prior years, there is no limit to the wages subject to the Medicare tax; therefore all covered wages are still subject to the 1.45% tax.

The FICA tax rate, which is the combined social security tax rate of 6.2% and the Medicare tax rate of 1.45%, remains at 7.65% for 2010. The maximum social security tax employees and employers will each pay in 2010 is $6,621.60. This is unchanged from the 2009 maximum.

The social security wage base for self-employed individuals in 2010 will also be $106,800. There is no limit on covered self-employment income that will be subject to the Medicare tax. The self-employment tax rate remains 15.3% (combined social security tax rate of 12.4% and Medicare tax rate of 2.9%). In 2010, the maximum social security tax for a self-employed individual will be $13,243.20. This is unchanged from the 2009 maximum.

FICA coverage threshold unchanged for domestic, election workers The threshold for coverage under social security and Medicare for domestic employees will be $1,700 in 2010, unchanged from 2009; the coverage threshold for election workers will be $1,500 in 2010, also unchanged from 2009.

E-Verify Changes

Fri, 07 Aug 2009 17:38:00 GMT

No More Federal Contracts Without E-Verify

The Secretary announced that federal contracts will be awarded only to employers who use E-Verify to check employee work authorization. “Requiring those who seek federal contracts to use this system will create a more reliable and legal workforce,” Napolitano said in a press release. Full implementation of the rule will apply to federal solicitations and contract awards Government –wide beginning September 8, 2009.

About E-Verify

E-Verify, which compares information from the Employment Eligibility Verification Form (I-9) against federal government databases to verify workers' employment eligibility, is a free web-based system operated by DHS in partnership with the Social Security Administration (SSA). The system facilitates compliance with federal immigration laws and helps to deter unauthorized individuals from attempting to work and also helps employers avoid employing unauthorized aliens.

The following is an overview of E-Verify usage:

· More than 134,000 employers currently use E-Verify, according to DHS;

· Since October 1, 2008, E-Verify processed more than 6,000,000 queries;

· The majority of users are satisfied with it, based on an April 2009 American Customer Satisfaction Index Survey.

· One reason employers like E-Verify may be its speed and efficiency. Independent research indicates that nearly 97% of the queries processed by the system are confirmed as work-authorized within 24 hours.

Improvements to E-Verify Continue

In addition to expanding participation, DHS continues to enhance E-Verify in order to guard against errors, enforce compliance, promote proper usage, and enhance security.

· E-Verify recently incorporated new processes to reduce typographical errors, and new features to reduce initial mismatches;

· In May 2008, DHS added access to naturalization database records, increasing the program's ability to automatically verify the status of naturalized citizens. The result was a reduction in citizenship-related mismatches of 39%;

· Department of State passport data was incorporated in February 2009, in an effort to reduce mismatches among citizens born outside the U.S.;

· Further initiatives designed to improve the accuracy of the Federal database are under way

o new tools to guard against fraud, misuse and discrimination:

o strengthening of training, monitoring and compliance; and

o enhancements in privacy protections.

Employers are square in the crosshairs of the government

Mon, 22 Jun 2009 19:14:00 GMT

The Department of Homeland Security Ramps up I-9 Audits

In an April 30, 2009 news release, Secretary Napolitano issued guidance outlining the “focus of its resources on worksite enforcement”. Administrative and criminal arrests from Audits have risen nearly 750% between 2005 and 2008. Penalties for a single incorrect I-9 can range from $250 to $1100. That means that small businesses with just 10 employees could be faced with tens of thousands of dollars in penalties if they do not have properly completed I-9’s on file.

Make no mistake, employers are square in the crosshairs of the government's drive toward more thorough immigration enforcement, regardless of whether they knowingly employ ineligible workers or not. And no industry or business sector is immune.

Why Do I Have to Perform Document Checks?

Section 274A of the Immigration and Nationality Act requires employers to verify that all employees are authorized to work and have established their identities using the Form I-9.

What Happens If I Correctly Complete an I-9 Form and Perform the E-Verify Query and ICE Subsequently Determines the Individual to Be Unauthorized to Work in the U.S.?

If the employee presented the employer with documents that reasonably appeared to be genuine and relate to the employee presenting them, you cannot be charged with a verification violation. This type of circumstance underscores the importance of why ICE is advocating participation in E-Verify for all employers.

Is the Form I-9 important to small business owners like myself?

Yes! Every U.S. employer must complete a Form I-9 for each and every employee they hire, no matter how many employees they hire.

What are the chances I'll be targeted for a Form I-9 audit?

You may think only the big guys get targeted for Audits. The truth is, “ICE” has significantly increased its reach and increased the scope of investigations of the enforcement arm, or in other words, increase audits.

Your responsibilities:

The latest I-9 form (revised 2/2/2009) can be downloaded for free at http://www.uscis.gov/i-9

Rev. 02/02/09. The revision date can be found on the lower right hand corner of the form. No previous editions accepted.

When should an I-9 be used:

All employees, citizens, and noncitizens hired after November 6, 1986, and working in the united states must complete Form I-9.

Where to File:

Do not file Form I-9 with U.S. Immigrations and Customs Enforcement (ICE) or USCIS. Form I-9 must be kept by the employer either for three years after the date of hire or for one year after employment is terminated, whichever is later. The form must be available for inspection by authorized U.S. Government officials (e.g., Department of Homeland Security, Department of Labor, or Office of Special Counsel).

Important Highlights:

Employees must provide non-expired original documents

Employers cannot specify which document(s) from the list they will accept from an employee

Employers must record in section 2:

1. Document title

2. Issuing authority

3. Document number

4. Expiration date, if any and

5. The date the employment begins

Employers may, but are not required to, photocopy the document(s) presented, If photocopies are made, they must be made for all new hires.

Expert Bucks! Referral Rewards

Mon, 15 Jun 2009 17:16:00 GMT

Did you know that you could be earning hundreds of dollars in processing credits or gift cards to Target, Starbucks or Chevron? It's easy and there's no limit to the amount of rewards you can receive! Just tell us, do you know someone who could benefit from having their own Payroll Expert?

Whether it's a friend who owns a business, or the company next door, we'd appreciate the opportunity to provide them with a free analysis of their current payroll solution along with a pricing comparison.

It takes only 15 minutes and we may just uncover a huge savings for them! They are sure to thank you, and we will too! For each friend who joins our family, you'll receive a $50 gift card to Target, or Starbucks, a $50 Chevron gas card, or $50 in processing credits! Jot down their names and numbers and fax it to us at 480.383.6297. Your original Consultation Expert, Alexia, Crystal or Casey, will give them a call to set up a meeting right away!

Payroll Experts offers same specials to current clients and new clients!

Mon, 08 Jun 2009 03:00:00 GMT

At Payroll Experts, we've noticed that many companies seem to only reward new clients with increasingly better offers and specials as time goes on, leaving tenured clients wondering why they are paying more and getting less than the new kids on the block. Unfortunately, many incentive programs out there are designed to reward new converts rather than the loyal customer base, offending their current clients, their most valuable asset. At Payroll Experts, we do things differently. It's called Loyalty Rewards and we’ve added it to our Client Service Commitments. It reads: "Loyalty Rewards - Rather than only rewarding new clients with special offers and promotions, we feel that it is important to thank our current clients too! We will always extend the same promotions to you as we do to our new clients."

Plus, if a special offer is announced on a certain product or service that you're already taking advantage of, don't worry! You'll automatically be enrolled in the promotion without having to lift a finger! It's our way of saying "Thank You" and reminding you that you are a valued part of our family and we look forward to a longstanding partnership.

Green and Secure - Paperless Options

Thu, 23 Jul 2009 20:33:00 GMT

Our truly paperless options allow you to help the environment and keep your sensitive payroll information more secure than ever before.

E-Courier

With our E-Courier, you can have your reports emailed to you immediately upon processing.
No waiting for a courier to deliver your payroll package the next day. Now you have instant access to your important payroll figures.
Plus, any combination of reports can be emailed to anyone you choose so everyone has the information they need right away. No more making copies of reports to hand around the office.
Reports are password protected to ensure only the right people are viewing them.
Now you have a secure, incredibly timely method to receive your data.
You even have the ability to email your employees a protected direct deposit voucher when using our “Remote-Client” solution.

Employee Self Serve

With our Employee Self Serve solution, your employees now have a secure online portal to access all of their payroll data.
Employees enroll themselves easily with information from their last pay stub
  - Securely access pay history, including reprinting previous check stubs
  - See current and previous W-2’s; even reprint them
  - View Demographic data
  - PTO balances if applicable
With access to all this, they no longer have to bother you for these items, freeing up your time.
With the option to suppress printing of paper vouchers altogether, you can save the time and hassle of distribution and offer your employees a more timely, discreet and secure solution.

Call your Payroll Expert today and ask for the Go Green Trial to try these solutions free for three months or refer to your recent payroll package for a “Go Green” Flyer with more information.

The Making Work Pay Tax Credit

Mon, 15 Jun 2009 17:18:00 GMT

Attention Employers: The IRS has issued updated withholding tables to help you implement the withholding adjustments required by the new economic stimulus law. As a Payroll Experts client you do not need to make any modifications to your current payroll process. Our tables were updated accordingly immediately upon the release of the updated information.

News release 2009-13 Includes information about these tables. More details about the Making Work Pay Tax Credit are available in Publication 15-T, New Wage Withholding and Advance Earned Income Credit Payment Tables (For Wages Paid Through 2009), which is available to view here. General Information For 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act will provide a refundable tax credit of up to $400 for working individuals and $800 for married taxpayers filing joint returns. This tax credit will be calculated at a rate of 6.2 percent of earned income and will phase out for taxpayers with adjusted gross income in excess of $75,000, or $150,000 for married couples filing jointly. For people who receive a paycheck and are subject to withholding, the credit will typically be handled by their employers through automated withholding changes in early spring. These changes may result in an increase in take-home pay. The amount of the credit must be reported on the employee's 2009 income tax return filed in 2010. Taxpayers who do not have taxes withheld by an employer during the year can also claim the credit on their 2009 tax return. It is not necessary to submit a Form W-4 to get the automatic withholding change. However, an employee with multiple jobs or married couples whose combined incomes place them in a higher tax bracket may elect to submit a revised W-4 to ensure enough withholding is held to cover the tax for his or her combined income. Publication 919 provides additional guidance for tax withholding.

For more information or to see the IRS posting, click here.