Payroll Tax Reminders:
NYS Paid Sick Leave:
New York’s paid sick leave law requires employers to provide up to 56 hours (7 days) of paid sick leave to employees. This requirement is based on the employer’s number of employees and net income. For example, employers with 5 to 99 employees must provide up to 40 hours of paid sick leave per calendar year. Additional details available on the NYS website at: https://www.ny.gov/programs/new-york-paid-sick-leave
NYS Paid Family Leave:
In 2024, eligible employees can take up to 12 weeks of paid family leave (PFL). These benefits extend to domestic workers who were hired directly by private homeowners. These employees must be working 20 or more hours a week and have been employed by the private homeowner for 26 consecutive weeks. Employees taking paid family leave will receive 67% of their average weekly wage (AWW), up to a cap of 67% of the current New York State Average Weekly Wage (NYSAWW) of $1,718.15. The maximum weekly benefit for 2024 is $1,151.16. For 2025, the NYSAWW is $1,757.19, which means the maximum weekly benefit is $1,177.32.
In 2024, the contribution is 0.373% of an employee’s gross wages each pay period. The maximum annual contribution is $333.25. Employees earning less than the current NYSAWW of $1,718.15 will contribute less than the annual cap of $333.25, consistent with their actual wages.
For 2025, the contribution rate goes up to 0.388% of employees’ gross wages, capped at an annual maximum of $354.53. Employees earning less than the NYSAWW of $1,757.19 will contribute less than the annual cap of $354.53, consistent with their actual wages. Additional details available on the NYS website at: https://paidfamilyleave.ny.gov/2025.
Overtime Rules For Exempt Employees:
New York State salary thresholds for exempt employees are as follows: Administrative and executive employees, located outside of New York City and downstate counties, must earn $1,161.65 per week to be exempt from overtime pay, in 2025. The exempt salary provisions provide scheduled annual increases for New York employees. More information can be found at: https://dol.ny.gov/minimum-wage-frequently-asked-questions.
Due Dates for W-2s:
The due date for filing 2024 Forms W-2 and W-3 with the Social Security Administration (SSA) is January 31, 2025. This is the same date that W-2 forms are due to the employees. Extensions of time to file Form W-2 with the SSA, for a period of 30 days, can be obtained by filing Form 8809. However, the IRS will only grant this extension in extraordinary circumstances or catastrophe.
The IRS has also increased penalty amounts for failing to file and furnish correct W-2 forms by the due date. Instructions for Forms W-2 and W-3 are available on the IRS website at: www.irs.gov/pub/irs-pdf/iw2w3.pdf.
Additional Reminders:
- It is very important to not ignore any information received from your payroll processing company regarding year-end processing. This will help them to prepare complete and accurate W-2s for your employees. It is costly to prepare the W-2 and year-end reports
a second time. - When preparing 2024 W-2 forms or providing your payroll company with W-2 information, be sure to include all the taxable income and benefits an employee earns. Examples are:
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- Personal use of a company vehicle.
- Health insurance and dental and long-term care premiums paid on behalf of a greater than 2% S-corporation shareholder (exempt for FICA and FUTA).
- PS-58 cost for group term life insurance benefits in excess of $50,000.
- Dependent care benefits.
- Employee pension information.
- Be sure to include disability income (third-party sick pay) an employee earns. It is important to report this information to your payroll processing company before year-end to be included in fourth-quarter reports and W-2s.
- FICA (Social Security) withholding rates remain unchanged at 7.65%, comprised of 6.2% for Social Security and 1.45% for Medicare. The employer is required to contribute a matching amount when making the tax deposit. The self-employed rate also remains at 15.3%, comprised of 12.4% Social Security and 2.9% Medicare. The maximum amount of taxable annual earnings subject to the Social Security tax and self-employment tax is $168,600 for 2024, increasing to $176,100 for 2025. All earnings are subject to the Medicare tax.
- Additional Medicare Tax: Employees are also subject to a 0.9% additional Medicare tax on all wages and self-employment income in excess of $200,000 for single filers and $250,000 for joint filers.
- The minimum-wage rate for New York State employees, outside of NYC and Long Island, for 2024 is $15.00 per hour, increasing to $15.50 January 1, 2025.
- The minimum wage for tipped food-services workers is $10.00 per hour if they earn $5.00 per hour in tips.
- Overtime for tipped workers is calculated at time-and-one-half the minimum wage rate, less the applicable tip credit. For example, the overtime rate for tipped food services workers is $17.50 [($15.00 x 1.5) – $5.00] per hour.
- Currently minimum wage for fast-food employees in NYS is $15.00 per hour. Increasing to $15.50 per hour in January 1, 2025.
- For 2024, minimum wage for home care aide employees, outside of New York City, is $17.55 per hour ($2.55 above basic minimum wage). This will increase to $18.10 on January 1, 2025.
- More information on New York minimum wage rates can be found at: https://dol.ny.gov/minimum-wage-0.
- The amount that can be deducted per week for disability insurance remains at .005% of gross wages with a maximum of $.60 per week.
- The Federal unemployment base wage will remain at $7,000 for taxable wages. The federal unemployment tax rate is 6%.
- The New York State unemployment wage base is $12,500 and $12,800 for 2024 and 2025, respectively. New York will be notifying you of your 2025 unemployment rate around February 1, 2025. If you use a payroll service such as ADP or Paychex, be sure to send them this notification.
- All new employees will need to complete and return to you:
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- W-4form for federal withholdings.
- IT-2104 form for New York state withholdings.
- Form I-9 –Employment Eligibility Verification. Be sure that you are using the current revision of this form with an expiration date of May 31, 2027. Current versions can be obtained at https://www.uscis.gov/i-9.
- You are also required to provide all new employees with the New York State Notice and Acknowledgement of Pay Rate and Payday.
Federal tax deposits: If you are NOT using a payroll service for payroll tax deposits, you will need to enroll your business and make payments electronically. Information on Electronic Federal Tax Payment System (EFTPS), including how to enroll, can be found at https://www.eftps.gov/eftps or by calling EFTPS Customer Service at 1‑800‑555‑4477.
Form 1099 Updates & Reminders
E-filing threshold for information returns:
As per regulations that the IRS released on February 23, 2023, the e-file threshold for certain information returns is 10 returns. The threshold was 250 returns before this regulation was established.
The new regulations eliminated the non-aggregation rule for the e-file threshold. Prior to calendar year 2023, the 250-return threshold was based on 1099 form type (i.e., 1099-INT, 1099-DIV). For the calendar year 2024, the 10-return e-file threshold is met when filing 10 or more information returns in total, regardless of the number of each specific form type filed.
1099-K Requirements:
Payments of more than $5,000, made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099‑K by the payment settlement entity. Note that these payments are not subject to reporting on Form 1099‑MISC.
Money received through third-party payment applications from friends and relatives as personal gifts or reimbursements for personal expenses are not taxable.
Due dates:
Form 1099-NEC must be filed with the IRS on or before January 31, 2025, using either paper or electronic filing procedures. Form 1099-MISC should be filed with the IRS by February 28, 2025, if paper filed, or March 31, 2025, if filed electronically.
Note: All 1099s are due to the recipients by January 31, 2025.
Additional Reminders:
The Internal Revenue Service requires anyone engaged in trade or business to file Form 1099.
Please confirm that all ID numbers and Social Security numbers are accurate before completing your 1099s.
The IRS can charge a penalty from $60 to $310 per form, depending on the time period past the deadline for issuing the form. If the non-filing or incorrect filing is intentional, the IRS can levy a minimum penalty of $630 per form or up to 10% of the income reported on the form.
You must file Form 1099 for each person, to whom you have paid during the year:
- At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
- At least $600 in rents, prizes and awards, other income payments, medical and health care payments, crop insurance proceeds, section 409A deferrals, non-qualified deferral compensation, and generally, the cash paid from a notional principal contract to an individual, partnership or estate.
- Any fishing boat proceeds.
- Gross proceeds of $600 or more paid to an attorney; or
- Reportable Payments to Corporations – In general, payments to corporations do not need to be reported on a 1099. However, the following payments made to corporations generally must be reported:
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- Cash payments for the purchase of fish for resale;
- Medical and health care payments;
- Gross proceeds paid to an attorney; and
- Substitute payments in lieu of dividends or tax-exempt interest;
Tronconi Segarra & Associates offers E-file services for Form 1099s. Let us know if you would like us to E‑file your Form 1099s.
As always, we are available to answer any questions you may have. Please do not hesitate to contact us.
