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EY's Employment Tax Advisory Services
This document provides an overview of employment tax advisory services. It discusses employer and employee obligations related to payroll taxes including registering with tax agencies, paying withheld taxes, filing returns, and responding to notices. It also outlines how the services can help with determining tax status, completing registrations, identifying required documents and due dates, preparing returns, and responding to tax agency notices. The services include assistance with unemployment insurance, process improvement reviews, audit defense, complex advisories, short-term business traveler compliance, transactions, and look-back reviews.
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EY's Employment Tax Advisory Services
- 1. Employment Tax Advisory Services Resourcesyou need when you need them
- 3. Page 3 US payrolltaxes Employer obligations Register with tax agency May apply to all taxing authorities where the employer has a business operation, and generally, in each employee work location Covered employer as defined by each applicable taxing jurisdiction Pay withheld tax File returns Collect employee documents Pay employer taxes Respond to agency notices Participate in agency audits Workforce Services |Working together with you in meeting your Affordable Care Act, employment tax and tax credits requirements
- 4. Page 4 Employer obligations Howcan we help? Where is assistance needed ?► Determine covered employer status ► Assist with tax agency registrations ► Assist with business status change reporting ► Identify tax documents required of employees and when ► Provide withholding tax deposit frequencies ► Identify returns required and their due date ► Identify employee information statements required and their due dates ► Prepare returns and information statements ► Identify the rates and limits that apply to federal FICA taxes and federal/state unemployment insurance ► Confirm that state unemployment insurance rates are accurately determined ► Identify options that may reduce state unemployment insurance rates ► Respond to agency notices concerning unemployment insurance claims ► Respond to all other tax agency notices ► Protest agency assessments ► Assist in tax agency audits ► Due diligence pursuant to mergers/acquisitions ► Look-back review subsequent to transactions Workforce Services |Working together with you in meeting your Affordable Care Act, employment tax and tax credits requirements
- 5. Page 5 Employee’s coveredwages as defined by each of these taxing jurisdictions US payroll taxes Employee withholding tax variables Unemployment, other social Insurance Income tax Income tax Head tax and otherUnemployment insurance Social Security, Medicare (FICA) Income tax State Federal Local Applies generally to all US employees Applies generally anywhere the employee works Applies generally to the primary work state Workforce Services |Working together with you in meeting your Affordable Care Act, employment tax and tax credits requirements
- 6. Page 6 Employee withholdingtaxes How can we help? Where is assistance needed ?► Identify the state and local withholding taxes that apply to the employee based on resident and work location ► For each applicable tax, define covered employment ► For each applicable tax, define covered wages ► What are the income tax withholding rates and methods of withholding allowed (e.g., supplemental withholding rate) ► Confirm exemptions to the nonresident income tax withholding requirements, if any, for short-term job assignments ► For employees working in more than one location, compute the allocation of taxable wages ► Calculate the employee withholding taxes owed Workforce Services | Working together with you for Affordable Care Act and employment tax compliance and tax credits
- 7. Page 7 EmploymentTax Advisory Services Employment Tax Advisory Services Resources you need when you need them Unemployment insurance ► Conduct a tax rate review and evaluate statutory elections ► Assist in providing complete and timely response to state separation notices ► Review unemployment insurance benefit statements and protest incorrect changes ► Provide customized benchmark reports Process improvement ► Analyze system tax and reporting configurations using our TaxAbility™ tool ► Rapid assessment tool for measuring performance and compliance, and identifying areas of focus ► Co-develop plan for future improvements ► Provide experienced resources for payroll tax system design, implementation and testing ► Complement internal audit efforts focused on employment tax operations and risk Audit defense ► Conduct an audit exposure risk assessment ► Assist with voluntary disclosure and settlement agreements including agency relations and adjust return preparation ► Provide representation in audit examinations, appeals and hearings ► Respond to agency information requests Complex advisory ► Form 1099 state and local reporting and withholding requirements by pay type ► Bankruptcy withholding and tax filing requirements ► Federal, state and local employment tax research ► One-off employment tax questions and tax opinions ► EY Payroll Newsflash™ service Short-term business traveler (STBT) ► Voluntary disclosure facilitation ► Shadow payroll services for US foreign businesses with employees working in the US ► Compliance, including employment tax return filing and tax payment services ► Identify nonresident withholding exposure, assist with implementation of policy and procedures to track the tax locations of US business travelers, perform wage and tax allocations and income tax withholding calculations Complex advisory Short-term business traveler (domestic, foreign) Information reporting Process review Audit defense Unemployment insurance Transactions ► Assist in pre-merger due diligence and tax planning ► Perform post-merger risk and look- back refund opportunity review ► Prepare registrations and business account closuresTransactions ► Evaluate unemployment insurance rate assignments under the latest state rules ► Bankruptcy compliance services Click on the puzzle shapes for more details Information reporting ► State filing and requirements for the full 1099 series
- 8. Page 8 EmploymentTax Advisory Services Short-Term Business Traveler Services (STBT) Domestic overview ► Holistic approach to determine potential exposure, policy and procedures, and assist compliance procedures to track the work locations and duration of time spent in nonresident work locations to compute the nonresident income tax withholding owed using the latest state and local rules concerning the allocation of wages and de minimis exclusions ► Facilitate the collection of documentation required to support wage allocations and income tax withholding calculations ► Collaborate on the design and implementation of short-term business traveler policies taking into account business culture and benchmark data ► Perform a risk assessment in the current compliance environment and assist in developing and acting upon a remediation plan ► Conduct annual end-to-end compliance review and assist with annual returns and information statements Download the STBT brochure here. Financial services (insurance) employer Compliance assistance for Bermuda residents on short-term assignment in the US Compliance program expanded to other countries and across US state boundaries How we made a difference For illustration purposes only. Actual tax benefits will vary depending on the taxpayer’s specific facts and circumstances. Return to the home page here. Foreign overview ► Compile requirements for federal, state and local withholding, employment tax payment and filing requirements for US foreign employees working in the US or the Outer Continental Shelf (federal only) ► Provide federal, state and local taxability requirements for each element of compensation and perform tax calculations necessary for withholding and employment tax purposes (e.g., income tax, Social Security, Medicare and unemployment insurance) ► Assist with federal, state and local income tax withholding and unemployment tax registrations and other business notification requirements ► Prepare all periodic, monthly and quarterly employment tax returns and facilitate electronic tax payment and filing requirements (e.g., Form 941 and state equivalents) ► Reconcile wage payments and tax deposits across jurisdictions and prepare annual returns and information statements including Forms 940, W-2 and 1042-S Download the foreign services brochure here.
- 9. Page 9 EmploymentTax Advisory Services Transaction and Look-Back Review Services Overview ► Prior to a merger or acquisition, assist the due diligence team in the evaluation of risk and exposure in connection with payroll tax obligations such as withholding, payment of employment taxes and the filing of federal, state and local returns ► Subsequent to a merger or acquisition, analyze employment taxes such as Social Security, Medicare and unemployment insurance to identify risks or refund opportunities. Assist with registrations and/or business account closures ► Evaluate unemployment insurance tax rates to determine if they were computed correctly by the states and identify opportunities to potentially lower contributions through statutory elections such as voluntary contributions, joint accounts and other similar provisions ► Review payroll tax records for any other risks and opportunities such as business expense policies, taxation and reporting of fringe benefits and other areas of key concern subsequent to a merger or acquisition. Assist in developing and acting upon a remediation plan Download the brochure here. Energy sector employer Employment tax refund study Tax refund to employer of $8 million and $30 million to employees Return to the home page here. How we made a difference For illustration purposes only. Actual tax benefits will vary depending on the taxpayer’s specific facts and circumstances.
- 10. Page 10 EmploymentTax Advisory Services Audit Defense Services Overview ► Perform an employment tax audit risk assessment for federal, state and local taxing authorities including wage and tax reporting, worker classification, proper sourcing of trailing compensation and other areas of focus by taxing authorities ► Assist with voluntary disclosure and settlement agreements, including agency relations and adjustment return preparation ► Provide representation in audit examinations, appeals and hearings ► Support pre- and post-audit employee communications and provide individual tax consultation and return preparation assistance ► Coordinate employment tax audits and assist in responding to information requests and preparation of electronic data processing files Download the brochure here. Health care industry employer Respond to Wilmington, DE, local payroll tax audit Reduced audit assessment from $1.2 million to $100,000 Return to the home page here. How we made a difference For illustration purposes only. Actual tax benefits will vary depending on the taxpayer’s specific facts and circumstances. :Learn about New York audits here.
- 11. Page 11 EmploymentTax Advisory Services Information reporting Overview ► State backup and withholding requirements for nonemployee compensation ► Withholding allowance certificate requirements for qualified retirement plan distributions (e.g., Form W-4P state equivalents) ► State reporting and filing requirements for the full Form 1099 series ► Preparation and filing of the full Form 1099 series ► Risk and controversy services for the full Form 1099 series Brochure is coming soon. Retail employer State Form 1099 filing Feed in excess of $300,000 Return to the home page here. How we made a difference For illustration purposes only. Actual tax benefits will vary depending on the taxpayer’s specific facts and circumstances.
- 12. Page 12 EmploymentTax Advisory Services Complex Advisory Services Overview ► Assist businesses in ascertaining their federal state 1099 withholding and reporting requirements ► Help businesses in bankruptcy determine their applicable unique withholding and employment tax requirements ► Conduct federal, state and local research pursuant to payroll tax and reporting requirements ► Prepare and file original and amended tax returns (W-2, 1099, 941, 940, etc.) and other returns and information statements ► Respond to one-off payroll and employment tax questions and provide tax opinions ► Deliver timely notices of key employment tax developments through our EY Payroll NewsFlash™ service and insights in our monthly newsletter, Payroll Perspectives Download the brochure here. Financial services industry employer Research 1099 withholding and reporting requirements for multiple payment streams Improved compliance and customer satisfaction Return to the home page here. How we made a difference For illustration purposes only. Actual tax benefits will vary depending on the taxpayer’s specific facts and circumstances.
- 13. Page 13 EmploymentTax Advisory Services Employment Tax Process Improvement Services Overview ► Facilitate the assessment of an organization’s employment tax performance via our secure web-based portal or via a live meeting to identify areas of risk and improvement and co-develop a plan for future operations ► Provide experienced resources to assist with employment tax system design and specifications, data migration, software installations and testing ► Provide experienced resources for special projects, year- end deadlines, training or to respond to complex one-off questions ► Compliment internal audit efforts focused on employment tax operations and risk analysis ► Analyze payroll system tax configurations for gaps in tax and reporting setups for federal, state and local taxing jurisdictions via our TaxAbility™ diagnostic tool Download the brochure here. Chemical and agricultural manufacturing employer Incorrect taxation and reporting of fringe benefits Business cost reduction of $5 million Return to the home page here. How we made a difference For illustration purposes only. Actual tax benefits will vary depending on the taxpayer’s specific facts and circumstances. Learn about TaxAbility here.
- 14. Page 14 EmploymentTax Advisory Services Unemployment Insurance Management Services Overview ► Assist in the complete and timely response to state unemployment insurance separation notices through our technology and service teams ► Review state unemployment insurance benefit statements for accuracy, protest inappropriate charges and work to resolve errors that have an adverse impact on the organization’s state unemployment insurance rates ► Provide customized reports that measure key performance areas such as responses to separation notices, successful and unsuccessful claim protests and other areas where the business can improve ► Confirm the accuracy of assigned unemployment insurance rates and surcharges, protest incorrect rate assignments and evaluate statutory elections such as voluntary contributions and joint accounts ► Assist in preparing for unemployment insurance claims hearings Download the brochure here. Fortune 5 company with diverse businesses Claims administration and tax advisory $13 million in employer tax benefits over 2 years Return to the home page here. How we made a difference For illustration purposes only. Actual tax benefits will vary depending on the taxpayer’s specific facts and circumstances.
- 15. Page 15 EmploymentTax Advisory Services Download the brochure here. Return to the home page here. Today’s global workforce is subject to increasingly complex laws in the areas of immigration, labor/employment and tax, potentially exposing businesses to significant monetary and reputational risk. For this reason, human resources and tax professionals are often anxious to see if their policies, processes and systems are efficiently meeting workforce management and tax performance standards. We have access to experienced professionals in tax and human capital from member firms in more than 100 countries and localities, adding continuity and efficiency to our suite of workforce services. Watch the video here. Workforce Advisory Services Working together with you in meeting your Affordable Care Act, employment tax and tax credits requirements
- 16. Gregory Carver gregory.carver@ey.com +1 214969 8377 Bryan De la Bruyere bryan.delabruyere@ey.com +1 404 817 4384 Clayton Gammill clayton.gammill@ey.com +1 214 756 1350 Julie Gilroy julie.gilroy@ey.com +1 312 879 3413 Ken Hausser kenneth.hausser@ey.com +1 732 516 4558 Kristie Lowery kristie.lowery@ey.com +1 704 331 1884 Ali Master ali.master@ey.com +1 214 756 1031 Chris Peters christina.peters@ey.com +1 614 232 7112 Debera Salam debera.salam@ey.com +1 713 750 1591 Debbie Spyker deborah.spyker@ey.com +1 720 931 4321 Stephanie Swann stephanie.swann@ey.com +1 404 817 5591 Contact us for more information
- 17. Connect with usEY | Assurance | Tax | Transactions | Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US. © 2016 Ernst & Young LLP. All Rights Reserved. SCORE 05042016 ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. ey.com Learn more about business traveler tax compliance See our year-end checklist and download our special reports Join us on LinkedIn: Payroll Perspectives Form EY Follow us on Twitter