Payroll Support

UPDATED ON 5/8/2009

On February 17th, 2009, President Obama signed a $787 billion economic stimulus plan known as the American Recovery and Reinvestment Act of 2009.  This plan is designed to spur economic growth in the U.S. - with short term and long term impacts.  Click here to visit the IRS website for more details.

This economic stimulus plan means that changes are coming for your small business - changes that can impact your payroll and your taxes.  If you are a customer of an Intuit payroll service, we are here to help. 

The following 2 provisions impact small businesses:

1.  COBRA Premium Subsidy:

• Note: This section impacts you only if you have employees participating in a COBRA plan after the termination of their employment.
• Under the American Recovery and Reinvestment Act of 2009, certain individuals who are eligible for COBRA continuation health coverage, or similar coverage under State law, may receive a subsidy for 65 percent of the premium. These individuals are required to pay only 35 percent of the premium. The employer may recover the subsidy provided to assistance-eligible individuals by taking the subsidy amount as a credit on their quarterly employment tax return. The employer may provide the subsidy - and take the credit on their employment tax return - only after they have received the 35 percent premium payment from the individual.
• For all QuickBooks Payroll customers, 2 guides have been created to help you understand how to receive your COBRA premium assistance credit:
• For a printer-friendly version of this guide, click on the following link for the COBRA Premium Subsidy Guide for QuickBooks.
• For an interactive video tutorial with these steps (Adobe Flash Version 9 required), click here.
• The IRS website has a question & answer section for employers, and the United States Department of Labor website has a fact sheet about the COBRA premium reduction
• The U.S. Department of Labor created model notices to help small businesses comply with the requirement to notify certain current and former COBRA participants and beneficiaries about the premium reduction. Click here to see the notices created by the Department of Labor.
• For more information about the COBRA documentation requirements set by the IRS, click here. 

What do I need to do?

• NEW: Basic, Standard, Enhanced, and Assisted Customers:  Intuit released Payroll Update 20910 on 4/16/2009.  Click here for information about this update, including download instructions.
• UPDATED: For step-by-step instructions on how to report your COBRA premium assistance payments click on the following link:  COBRA Premium Subsidy Guide for QuickBooks.
• UPDATED: Disk Delivery customers, click here for more information about your next disk shipment.
• QuickBooks Online Payroll and Intuit Online Payroll customers, these changes have been made automatically - please check your home page for more information.
• All QuickBooks Payroll customers as well as Complete Payroll customers should have already received Payroll Update 20909 on 3/24/2009. That update also included the release of the new Form 941 to be used for all 1st quarter filings. 

2. Making Work Pay Tax Credits:

• Available for tax years 2009 and 2010, the Making Work Pay credit is 6.2% of taxpayer's earned income with a maximum credit of $800 for a married couple filing a joint return and $400 for other taxpayers, but it is phased out for higher income taxpayers.
• The new Making Work Pay tax credit is being issued through employer payroll taxes and requires a new IRS tax table that is to take effect no later than April 1, 2009.
• The IRS has issued a notice about these tax credits that you can share with your employees.  Click here and scroll to page 73 to see the IRS Notice to Employees.
• Your employees may have questions about their withholdings.  The IRS has the following tools that may be helpful for your employees to understand their withholdings and to make any necessary changes:
• The Tax Withholding Calculator posted on the IRS website reflects the new withholding tables and can help your employees ensure that the reduced withholding will not result in having too little income tax withheld.
• The Making Work Pay Credit Worksheet on page 22 of Publication 919, How Do I Adjust My Tax Withholding may help employees determine if they need to complete a new Form W-4 to adjust their federal withholding.
• If an employee decides to make adjustments to their withholdings, they will need to submit an updated Form W-4 to their employer. 

What do I need to do?

• Basic, Standard, Enhanced, Assisted and Complete Customers: Intuit released new tax tables on 3/12/2009, to be effective immediately.  If you have automatic updates turned on, you already have the latest update.  Click here for information about Payroll Update 20908, including instructions for downloading this update.
• Disk Delivery customers, click here for more information about your next disk shipment.
• QuickBooks Online Payroll and Intuit Online Payroll products have released these changes, and your tax tables have been updated automatically.

Intuit has been actively working with government agencies to understand how this law will impact small businesses and what effects it will have on payroll-related activities.  We will continue to keep you informed - check this page often to get up-to-date information about this sweeping legislation.

Next Steps:

If you use Basic, Standard, or Enhanced Payroll, there are two things that you can do now to make sure that we can keep you up to date with the latest information about your payroll service:

1.  Keep your payroll administrator email up to date.  At various times throughout the year, we send emails to your payroll administrator with important information that helps to keep your small business compliant with changing regulations.  Click here for instructions on how you can quickly update your payroll administrator's info in QuickBooks.

2.  Turn on Automatic Updates in QuickBooks to ensure that you have the latest tax information as soon as it is available. 

For all versions of QuickBooks:

The next time you log into QuickBooks and are online, you may be prompted to download updates.  When you are prompted, follow the instructions in your software to make sure you have all of the latest downloadable information.

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