Payroll Support

UPDATED ON 12/23/2009

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 contains 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 (Form 941). 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.
• NEW!:  On 12/21/2009, the President signed the Fiscal Year 2010 Defense Appropriations Act (H.R. 3326).  Included in the act (SEC. 1010) is the extension of the eligibility period for the COBRA premium reduction for an additional 2 months (through 2/28/2010 instead of 12/31/2009) and the maximum period for receiving the subsidy for an additional 6 months (from 9 to 15 months). A statement by Phyllis C. Borzi regarding the COBRA subsidy extension was posted on the U.S. Department of Labor website.
• NEW!: For employers who file an annual employment tax return (Form 943 or Form 944) and who make COBRA premium assistance payments, the IRS has updated the 2009 forms to allow you to take a credit for these payments.
• 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!:  Standard and Enhanced customers:  Intuit released the 2009 Form 943 and 2009 Form 944 in Payroll Update 21001 on 12/17/2009.  Click here for information about this update, including download instructions.  
• 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.
• Disk Delivery customers: click here for more information about your next disk shipment.
• QuickBooks Online Payroll and Intuit Online Payroll customers: please check your home page for more information.
• Assisted Payroll and Complete Payroll customers: Intuit will be including any COBRA premium assistance payments that you reported to Intuit on the applicable employment tax form supported by your payroll service.

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 Making Work Pay tax credit is being issued through employer payroll taxes.
• NEW!:  For tax year 2010, the IRS has issued new withholding tables.  Intuit released the new tax tables in Payroll Update 21001 on 12/17/2009.
• Disk Delivery customers: Click here for more information about your next disk shipment.
• 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 IRS has communicated that the Tax Withholding Calculator posted on the IRS website should be up an running for 2010 by the first week in January.  This tool will reflect the new withholding tables that are effective 1/1/2010.  The calculator can help your employees ensure that the reduced withholding will not result in having too little income tax withheld.
• 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?

• Updated:  Basic, Standard, Enhanced, and Assisted Customers: Intuit released new tax tables effective 1/1/2010 on 12/17/2009.  If you have automatic updates turned on, you already have the latest update.  Click here for information about Payroll Update 21001, including instructions for downloading this update.
• Disk Delivery customers: click here for more information about your next disk shipment.
• Updated:   QuickBooks Online Payroll and Intuit Online Payroll Classic products released the new withholding tables effective 1/1/2010, and your tax tables have been updated automatically.
• Complete Payroll customers:  tax tables have been updated per the agency requirements for all payrolls processed effective 1/1/2010.

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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