Thursday, May 6, 2010

Here a Change…There a Change or What’s New on the Form 941 This Week

We will be using Thursdays to explain, discuss, debate and even complain about reporting requirements. This is a broad topic I know but it seems like we are always reporting something somewhere in payroll. So why not devote a day a week to examine the requirements of reporting and to bi$&h when it gets to be a little crazy from time to time. This week I will be venting about reporting.

Of course it is part of the profession to deal with IRS and state forms. But I think the last two years have really gone far and above the call of duty when it comes to reporting. My point…how many Forms 941 do we have to have in one year…two years in a row?

I have been in payroll for over 30 years and as with the rest of the payroll profession I am accustomed to having a new form at the beginning of each year. Since 1990 I have been writing manuals on payroll. So every January I gleefully wait for the new forms, check for the minor or sometimes major changes and update my books and training courses by the end of January. And the changes are rarely a surprise because we always get the draft forms to examine in plenty of time to make any needed adjustments.

But between last year and this year I am about ready to scream. Last year I had everything updated, posted to my school websites for my students and submitted to my publisher for their subscribers and BLAM! Here comes the American Recovery and Reinvestment Act with COBRA premium assistance. So in the middle of February with students half way through courses I am scrambling to update sections so the info is current and they are not learning last year’s information or form. And it seemed like it would never end. Every few days the IRS was releasing new tables within temporary publications etc. By mid-April it stopped but boy what a struggle to keep up. My payroll friends were scrambling even faster trying to get all the changes into systems to meet deadlines and learn the new form before having to file it at the end of April.

So this year I assumed it would go back to the usual one form, check for minor changes since COBRA premium assistance had been extended and that would be it until COBRA assistance finally expired sometime in 2011. BUT NO! Along comes the HIRE Act and rebates on the employer portion of social security. So now we have to file one version of the Form 941 for the first quarter that matches 2009’s last version. And then we will have a new version for second quarter that will allow us to catch up what we need to for first quarter for the HIRE Act plus what we have in the second quarter. And just when we get that all dialed in remember…the COBRA premium assistance will expire this year at some point. So you know what that means. The 2011 Form 941 will have to be changed to reflect the discontinuation of the HIRE Act as of December 31, 2010. Then it will have to be adjusted to reflect the discontinuation of the COBRA premium assistance. Since COBRA assistance is 15 months from May 31, 2010 the last premium assistance will be in August 2011. So we will have at least two forms again next year.

The next time someone dares say to me that payroll taxes aren’t that tough, just fill in one form a quarter and send it in, I will punch ‘em right in the mouth. So much for my venting on reporting. What is your take?

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