2023 Year End Reminders and 2024 Payroll Tax Updates
By Rebecca Clemmer, Payroll Specialist
2023 Year End Reminders
Social Security Verification
The Social Security Administration (SSA) continues to send its Educational Correspondence (EDCOR) notices to employers containing name and social security number (SSN) mismatches. Mismatched names and social security numbers will prevent credit earnings to a worker’s record and possibly disqualify workers for Social Security benefits.
Employers with 250+ employees
If at any time since 2015 an employer filed over 250 W-2s in one year, reporting requirements to include the cost of Employer Sponsored Health Coverage on the W-2 in box 12 with code DD, remain in effect. The following is a list of the items that need to be included:
• Major Medical
• Hospital Indemnity or specific illness paid pretax basis or by employer
• Domestic Partner coverage included in gross income
There are several types of insurance that are optional for reporting.
Applicable Large Employers (employer with 50+ full time equivalent employees)
Reporting requirements, using Form 1094-C and Form 1095-C, remain in effect. Additional reporting requirements, using Form 1095-B apply to employers with self-insured coverage, even if not an applicable large employer.
Reporting of Fringe Benefits
If you have any fringe benefits that you’ve given your employees in 2023, they need to be included on their W-2’s. There are several items that qualify as fringe benefits. Below is a list of common items that you need to report, however this list is not all inclusive:
• Health Insurance premiums you paid on behalf of a greater than 2% shareholder if you are an S Corporation
• Personal Use of Company Car
• Value of Group Term Life Insurance in excess of $50,000
• Employer Health Savings Account Contributions
• List of Retirement Plan Participants including Employer only contributions
• Cash and Non-cash gifts given to employees, regardless of amount
These are only a few of the items that need to be included on the W-2’s.
Changes for 2024
2024 FICA Changes
The Social Security Wage Base is increasing to $168,600, therefore the maximum Social Security tax employees and employers will contribute is $10,453.20 each. Medicare continues to have no wage base limit. However, when an employee earns over $200,000, they will be subject to an extra .09% Medicare Tax. The employers do not match this portion of the Medicare tax.
Retirement Contribution Limits for 2024
Catch-up Contributions for over 50 years old $7,500
Simple IRA or 401(k) $16,000
Catch-up Contributions for over 50 years old $3,500
Health Savings Account Limits for 2024
Self-only Coverage $4,150
Family Coverage $8,300
Catch-up Contributions for over 55 years old $1,000
Health Flexible Spending Accounts $3,200
PA SUTA Wage Base
The taxable wage base for employers remains at $10,000. The employee portion remains at 0.07 percent with no wage limit.
We hope this information will help you prepare for a productive and prosperous 2024. As always, you can contact DH Payroll at firstname.lastname@example.org for all of your payroll related issues.