On Jully 22 the Department of Homeland Security's Immigration and Customs Enforcement published a final rule (75 Fed. Reg. 42575) amending its regulations that permit employers to complete, sign, scan, and store the Form I-9 electronically.

The final rule will take effect 30 days after publication in the Federal Register.

The final rule, which covers only the storage of the I-9 form, makes minor changes to an interim final rule promulgated in 2006. The DHS modifications to its regulations are meant to clarify that, among other things, employers must complete an I-9 form within three business-not calendar-days of the date the employee is hired; and employers may use paper, electronic systems, or a combination of paper and electronic systems.

Cick here to learn more about From I-9

Answers to questions about the payroll tax exemption and the retention credit for new workers employed under the Hiring Incentives to Restore Employment Act (Pub. L. No. 111-147) were added July 29 to a list of questions and answers posted to the Internal Revenue Service website.

The IRS added 10 answers to questions about the payroll tax exemption, including how employers can claim the payroll tax exemption for wages paid to qualified employees from March 19, 2010, to March 31, 2010, and how IRS will treat the credit claimed for wages paid in the first quarter.

The IRS also answered a question about the work performed as a self-employed individual, saying that only work performed as an employee counts in determining whether an individual has been employed for 40 hours or less during the 60-day period for qualified employee status.

Answers to 13 questions were added about the retention credit process, including when an individual begins employment for purposes of the HIRE Act.

Click here to go to the IRS's Q&A page to read more about the HIRE Act.

Legislation that would extend emergency unemployment insurance benefits to Nov. 30 was signed July 22 by President Obama. The bill (H.R. 4213) did not include an extension of the COBRA premium subsidy program, as did recent extension legislation. Under the program, employers pay 65 percent of the premium for qualified workers, with the amount claimed as a tax credit.

The House approved the bill 272-152 on July 22 and the Senate approved the measure 59-39 on July 21.

Business both small and large are faced with the daunting task of complying with the requirements of the health care over-haul law (Patient Protection and Affordable Care Act of 2010) which was signed into law on March 23, 2010. Payroll processing and reporting will need to be adjusted to account for many of the changes made to benefit plans. Following are the effective dates for major tax provisions:

2010

Adoption tax credit is made refundable, retoractive to January 1, the thresholds for qualifying expenses are increased to $13,170 per child and the adoption credit is extended through 2011.

2011

• Employers must begin reporting the value of health care benefits on employees' W-2 statements
• Money in flexible speding arrangements, health savings accounts and other health reimbursement arrangements cannot be used fo over-the-counter medicines unless they are prescribed by a doctor.
• The penalty for using health savings account funds for nonqualified uses will rise to 20 percent from 10 percent.
• Employers would no longer be allow4ed to deduct from taxes the value of benefits bought for retirees with govenment subsidies for providing retiree prescription drug coverage under Medicare Part D.

2012

New information reporting is required for businesses making payment in excess of $600 in a calendar year to corporations.

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Effective June 1, 2010, employers that withhold $20,000 or more annually from employee compensation will be required to remit withheld taxes to the department on a semi-weekly basis. Under Act 48 of 2009, employers whose payday falls on a Wednesday, Thursday or Friday will be required to make a deposit of the tax the Wednesday following the payday; if the payday falls on a Saturday, Sunday, Monday or Tuesday, the deposit is due the following Friday.

Earlier this year the Department of Revenue issued letters to all employers who are required to change their deposit frequency to semi-weekly. If you have received a notice please forward it to us so that we can implement this change for your first payroll dated in June.

For more information about the employer withholding payment frequency change or a schedule of paymentdue dates, visit the department's Online Customer Service Center at www.revenue.state.pa.us or call 717-787-1064.

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The Internal Revenue Service and two other federal agencies released interim final rules for group health plans and insurance issues relating to dependent coverage of children to age 26 under the Patient Protection and Affordable Care Act (Pub. L. No. 111-148).

The rule says a group health plan, or a health insurance issuer offering group health insurance coverage, that makes available dependent coverage of children must make such coverage available for children until age 26. The regulation was issued by IRS, the Labor Department's Employee Benefits Security Administration, and the Office of Consumer Information and Insurance Oversight in the Department of Health and Human Services.

The Internal Revenue Service today issued new guidance to make it easier for small businesses to determine whether they are eligible for the new health care tax credit under the Affordable Care Act and how large a credit they will receive. The guidance makes clear that small businesses receiving state health care tax credits may still qualify for the full federal tax credit. Additionally, the guidance allows small businesses to receive the credit not only for regular health insurance but also for add-on dental and vision coverage.

Notice 2010-44 provides detailed guidelines, illustrated by more than a dozen examples, to help small employers determine whether they qualify for the credit and estimate the amount of the credit. Click here to read the Notice.

The credit is available to small employers that pay at least half the cost of single coverage for their employees in 2010. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ moderate- and lower-income workers.

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An additional 34 questions and answers covering how employers can claim the 6.2 percent payroll tax forgiveness incentive are now available on the IRS website. This is in addition to the original 19 Q&A's posted in late March. IRS officials said more HIRE Act Q&A's are still under review. Click here to view the new HIRE Act Questions & Answers.

As a result of changes made by the recently enacted Affordable Care Act, health coverage provided for an employee's children under 27 years of age is now generally tax-free to the employee, effective March 30, 2010.

The Internal Revenue Service announced today that these changes immediately allow employers with cafeteria plans -- plans that allow employees to choose from a menu of tax-free benefit options and cash or taxable benefits -- to permit employees to begin making pre-tax contributions to pay for this expanded benefit.

This expanded health care tax benefit applies to various workplace and retiree health plans. It also applies to self-employed individuals who qualify for the self-employed health insurance deduction on their federal income tax return.

According to IRS Commissioner Doug Shulman "These changes give employers a unique opportunity to offer a worthwhile benefit to their employees." "We want to make it as easy as possible for employers to quickly implement this change and extend health coverage on a tax-favored basis to older children of their employees."

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