Government News
2021 Federal Rates
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SSA wage base $142,800
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Employee SS rate 6.2%
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Employer SS rate unchanged 6.2%
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Medicare rate 1.45%
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Medicare rate for wages greater than $200,000 2.35%
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Standard business mileage rate 56 cents per mile
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Medical or Moving mileage rate 16 cents per mile
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Service of charitable organizations mileage rate 14 cents per mile
2021 RevenuE Fringe Benefit
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Adoption credit-$14,440
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The amount excludable from an employee’s gross income begins to phase out for taxpayers with an adjusted gross income of $216,660) and is completely phased out for taxpayers with an adjusted gross income of $256,660.
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Health FSA Limit- $2,750 (Max carryover amount is $550.00)
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Parking- $270.00
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Commuter Highway vehicle & Transit Passes-$270.00
- Medical Savings Accounts
- High Deductible
- Individual-$2,400-$3,600
- Family-$4,800-$7,150
- Maximum Out-of-Pocket
- Individual coverage-$4,800
- Family- $8,750
- High Deductible
- Long-term care insurance benefits
- Amount excluded from income capped at $400 per day
- Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) -For 2021, a qualified small employer health reimbursement arrangement (QSEHRA) is an arrangement that, among other requirements, makes payments and reimbursements for qualifying medical care expenses or family members
- Do not exceed $5.300 Eligible employee
- $10700 for family members of the employee
Pension Plan, Deferral Limits Announced for 2021
IRS announced the 2021 Pension Limits. See the list below.
Traditional and Roth IRA contributions-$6,000
Traditional and Roth IRA catch-up contributions-$1,000
Annual additions under IRC Sec. 415(c)(1)(A) for defined contribution plans: $58,000
Annual additions under IRC Sec. 415(b)(1)(A) for defined benefit pension plans: $230,000
Annual IRC Sec. 402(g) deferral limit for 401(k), 403(b) and 457(b) plans: $19,500
Catch-up contributions to 401(k), 403(b) and 457(b) plans: $6,500
Annual deferral limit for SIMPLE IRA and SIMPLE 401(k) plans: $13,500
Catch-up contributions for SIMPLE IRA and SIMPLE 401(k) plans: $3,000
Annual IRC Sec. 408(k)(2)(C) deferral limit for SEPs plans $650
IRC Sec. 401(a)(17) compensation cap: $290,000
Highly compensated employee definition income threshold: $1305,000
Top-heavy determination key employee definition income threshold: $185,000
SEP plan employee income threshold for benefit eligibility: $650
For more information please visit the IRS [Notice 2020-79, 10-26-20].
2020 FUTA Credit Reduction States
On November 10, 2020, the U.S. Department of Labor (DOL) announced Virgin Islands is the only state/territory subject to the FUTA credit reduction for 2020. This means the employers in these states will be required to pay additional FUTA taxes in the 4th quarter FUTA tax deposit due no later than January 31, 2021.
The reasons why the employers are subject to this tax are due to Virgin Island unable to pay back the outstanding federal unemployment loans by November 10, 2020. Below is the Virgin Islands Futa credit reduction rate along with their FUTA rate for 2020.
|
State/Territory |
2020 Credit Reduction |
2020 FUTA Rate |
|
Virgin Islands |
3.0% |
3.6% |
State Updates
The following states below have announced their 2021 Wage Base Limits. ( AS OF 12/22/2020)
| State | 2021 Wage Base | State | 2021 Wage Base | |
| ALABAMA | 8,000 | MISSISSIPPI | 14,000 | |
| ALASKA | 43,600 | MISSOURI | 11,000 | |
| ARIZONA | 7,000 | MONTANA | 35,300 | |
| ARKANSAS | 10,000 | NEBRASKA | 9,000* | |
| CALIFORNIA | 7,000 | NEVADA | 33,400 | |
| COLORADO | 13,600 | NEW HAMPSHIRE | 14,000 | |
| CONNECTICUT | 15,000 | NEW JERSEY | 36,200 | |
| DELAWARE | NEW MEXICO | 27,000 | ||
| DISTRICT OF COLUMBIA | 9,000 | NEW YORK | 11,800 | |
| FLORIDA | 7,000 | NORTH CAROLINA | 26,000 | |
| GEROGIA | 9,500 | NORTH DAKOTA | ||
| HAWAII | 47,400 | OHIO | 9,000 | |
| IDAHO | 43,000 | OKLAHOMA | 24,000 | |
| ILLINOIS | 12,960 | OREGON | 43,800 | |
| INDIANA | 9,500 | PENNSYLVANIA | 10,000 | |
| IOWA | 32,400 | RHODE ISLAND | 24,600** | |
| KANSAS | 14,000 | SOUTH CAROLINA | 14,000 | |
| KENTUCKY | 11,100 | SOUTH DAKOTA | 15,000 | |
| LOUISIANA | 7,700 | TENNESSEE | ||
| MAINE | 12,000 | TEXAS | 9,000 | |
| MARYLAND | 8,500 | UTAH | 38,900 | |
| MASSACHUSETTS | 15,000 | VERMONT | 14,100 | |
| MICHIGAN | VIRGINIA | 8,000 | ||
| MINNESOTA | WASHINGTON | 56,500 | ||
| MASSACHUSETTS | 15,000 | WEST VIRGINIA | 12,000 | |
| MICHIGAN | WISCONSIN | 14,000 | ||
| MINNESOTA | WYOMING | 27,300 |
*Nebraska – new for 2020, $24,000 for employers assigned to rate category 20.
**Rhode Island – $26,100 for employers in the highest UI tax rate group.
Forms & Publications
Publication 15 (Circular E), Employer's Tax Guide
Publication 15-A Employer's Supplemental Tax Guide
Publication 15-B Employer's Tax Guide to Fringe Benefits
Publication 15-T Federal Income Tax Withholding Methods
Resource Links
American Payroll Association (APA)
Federal Office of Child Support Enforcement
National Archive & Records Administration
Society for Human Resource Management (SHRM)
State New Hire Reporting Websites
VA-4 Employee's Withholding Exemption Certificate
Virginia Statewide Payroll Conference
US Dept of Health & Human Services
Resource Material
Wolters Kluwer CCH Payroll Management Guide
Virginia Statewide Payroll conference Affiliated APA Chapters
Southwest Virginia Chapter of the APA
Charles Town West Virginia Chapter
