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QuickBooks Implements New Jersey Family Leave Insurance Tax
Article ID: 1012354
Overview
Payroll Update 20903 includes the implementation of the new Family Leave Insurance (FLI) tax.
Background
New Jersey Governor John S. Corzine signed the family leave insurance bill effective January 1, 2009, which has the following impact on New Jersey payroll taxes:
- Payroll deductions will begin in January 2009.
- Covered employees will contribute at the rate of .09% of the taxable wage base.
- The taxable wage base for 2009 is $28,900.
- The maximum contribution for 2009 will be $26.01.
- In 2010, the contribution rate will increase to .12% of the taxable wage base.
As a result of these changes, the state has revised the Form NJ-927, Employers Quarterly Report. The 2009 Form NJ-927 will include new lines to report the FLI wage base, rate, and contributions.
Information
Frequently Asked Questions
How do I know if I?m affected?
You may be affected if you currently make unemployment insurance contributions in New Jersey or currently have a valid New Jersey Federal Employer Identification No. and Suffix No.
You may be affected if you currently make unemployment insurance contributions in New Jersey or currently have a valid New Jersey Federal Employer Identification No. and Suffix No.
When is the new FLI tax effective?
The New Jersey Family Leave Insurance tax is effective January 1, 2009.
When will I be informed that my employees are subject to the Family Leave Insurance?
The New Jersey Department of Labor and Workforce Development, Division of Temporary Disability Insurance has begun notifying employers via a notice entitled New Jersey Family Leave Insurance, Important Information for Employers. The Notice will include the FLI rate that you are required to withhold beginning January 1, 2009.
When will the new FLI tax be available in QuickBooks?
The new FLI tax will be included in an upcoming Payroll Update to be released in early January.
What if I subscribe to Disk Delivery service? When will I receive the CD that includes this new FLI tax?
Disks are scheduled to be sent in late January. If you have internet access, you may download the payroll update online, if you prefer.
What steps should I take after installing the Payroll Update?
After downloading and installing the Payroll Update, go to Pay Employees to trigger the Add New Tax Wizard. The Wizard will guide you through the setup process.
What if I ran a payroll in 2009 prior to downloading the Payroll Update that includes the new FLI tax? Do I have to make any payroll liability adjustments?
Yes, more than likely you will have to process payroll liability adjustments for any payroll(s) you may have processed prior to downloading the payroll update. The Wizard will process liability adjustments for the employee portion of the FLI tax. Since the FLI tax was not deducted from your employee?s paychecks, we have provided instructions to verify if adjustments are needed and how to create the payroll liability adjustments.
- From the Employees menu bar, select Payroll Taxes and Liabilities; select Pay Scheduled Liabilities.
- In the Pay Scheduled Liabilities window, check to see if there is a balance for the FLI tax. If there is a balance, then payroll liability adjustments are needed.
- Generate a Payroll Item Detail Report. Use this report as a reference when applying your payroll liability adjustments.
- Adjust tax amounts for each employee (see Adjustments, Payroll Liability Balance in Help for Guidance) or follow the instructions below:
- At the Employees menu, select Payroll Tax Liabilities and then click Adjust Payroll Liabilities
- In the Date field, enter today?s date.
- In the Effective Date field, enter the date of the check.
- In the Adjustment is for: field, click on the Employee radio button and then select the employee?s name for whom the adjustment is being applied.
- In the Item Name field, click on the drop-down and select NJ ? Family Leave Insurance.
- In the Amount field, enter the amount of the adjustment by entering a negative (-) sign before the dollar amount. For example, -18.00.
- Leave the Wage Base field blank.
- In the Memo field, enter a memo reflecting the adjustment.
- Click OK.
- If an Account for employee liabilities window appears, select Payroll Liabilities from the drop-down selection.
- Click OK.
- If more employee adjustments are needed, click on the Next Adjustment tab.
- Once you completed all payroll liability adjustments, click OK to exit.
- Generate another Payroll item Detail Report to verify that your tax adjustments have posted correctly.
- At the time of your next payroll run, QuickBooks will collect any additional FLI taxes due (up to the current period) from your employee?s paychecks.
