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Tax Researcher

January 2009

STATE UNEMPLOYMENT INSURANCE: YEAR 2009 TAXABLE WAGE LIMITS

Some states have increased their taxable wage limit for 2009, which is a factor in determining the employer’s contribution to the state’s unemployment compensation insurance program. Alaska and New Jersey also require an employee deduction based on the same wage limit. Pennsylvania requires a deduction from all employee wages. States with changes from 2008 are in bold in the table below:

 

IRS DECREASES STANDARD AUTO MILEAGE REIMBURSEMENT RATES EFFECTIVE 1/1/09

The IRS has announced that effective January 1, 2009, the standard mileage rate for BUSINESS usage decreases from the current $0.585 to $0.55 per mile. Effective on the same date, the automobile reimbursement rate for deductible MEDICAL and MOVING expenses decreases from $0.27 to $0.24 per mile. However, there is no change in the reimbursement rate applicable to mileage incurred for CHARITABLE purposes. That remains at $0.140 per mile.

Seeking to reduce recordkeeping, the IRS has allowed taxpayers who use no more than four vehicles at the same time for business purposes, to use the standard mileage rate instead of requiring them to document the actual expenses for each vehicle.

Any of the standard automobile mileage rates are a “short cut” authorized by the IRS when taxpayers substantiate the cost of automobile usage. The flat mileage rate does not cover parking or tolls. The IRS considers that the substantiation and adequate accounting requirements for employer-reimbursed BUSINESS expenses, for example, are satisfied by employers and employees who merely use the $0.55 a mile rate (effective January 1, 2009). It is not necessary to provide sales receipts or other documentation, as long as the time, place, business purpose of the expense, and the number of miles traveled, are evident.

HELPFUL LINKS ONTHE INTERNET

Employers have many questions when it comes to complying with a myriad of government rules and regulations. The internet provides a wealth of information, including that found at the following federal agencies’ websites:

• The U.S. Government’s Official Web Portal at www.usa.gov
• Internal Revenue Service at www.irs.gov
• The Social Security Administration at www.ssa.gov
• The US Department of Labor at www.dol.gov
• The US Census Bureau at www.census.gov
• The US Department of Health and Human Services, Administration for Children & Families at www.acf.hhs.gov
• The US Equal Employment Opportunity Commission at www.eeoc.gov
• The US Small Business Administration’s official business link to the US government at www.business.gov

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TAX RESEARCHER is distributed with the understanding that the publisher is not rendering legal, accounting or other professional services. If such advice or assistance is required, an attorney or accountant should be consulted. This newsletter is published monthly by Statutory Research, a department of the Employer Services Division. Comments should be addressed to ADP, Inc., Statutory Research Department, One ADP Boulevard (M/S 364), Roseland, New Jersey 07068. Copyright 2009 ADP, Inc.