Recent Tax And Regulation Changes For 2022 

Recent Tax And Regulation Changes For 2022

Oct 18, 2022

Five Indiana Counties Increasing Tax Rates on October 1

The changes include three central Indiana counties: Boone, Johnson and Monroe. LaPorte and Knox counties are the other two. 

These are the affected counties and rate changes:

  • Boone County: 0.017 (up from 0.015)
  • Johnson County: 0.014 (up from 0.012)
  • Knox County: 0.017 (up from 0.012)
  • LaPorte County: 0.0145 (up from 0.0095)
  • Monroe County: 0.02035 (up from 0.01345)

The changes affect businesses with employees who live or work in any of the counties and have income tax withholdings. The new rates go into effect on Oct. 1, 2022.

For Indiana residents, county tax rates for individuals are based on the employee’s Indiana county of residence on Jan. 1, 2022.

All 92 of Indiana’s counties impose a county income tax on residents of the county and on nonresidents who do not reside in another Indiana county  with a principal place of business or employment in the county. 

To see county’s current tax rate, visit the DOR’s website at dor.in.gov

Story sourced from: APA news article, Fox 59 News story, and the DOL of Indiana.

 

Revised Virginia Withholding Tables Effective October 1

Legislation enacted during the 2022 General Assembly session increases the standard deduction from $4,500 to $8,000 for single filers and from $9,000 to $16,000 for married filers filing jointly. 

The increase for tax year 2022 is contingent on annual revenue growth of at least 5% for the six-month period of July through December 2022. 

The increase for tax year 2023 is contingent on annual revenue growth of at least 5% for the 12-month period of July 2022 through June 2023. 

If the 5% growth rate is not met for either taxable year, the standard deduction for that taxable year will be $7,500 for single individuals and $15,000 for married persons. Under this Act, the increase in the standard deduction is scheduled to sunset after Taxable Year 2025 and revert to the standard deduction amounts that applied prior to Taxable Year 2019: $3,000 for single filers and $6,000 for married couples filing jointly.

Story sourced from: APA News story and tax.virginia.com

 

California Minimum Wage Increasing January 1

California’s minimum wage will rise again in January 2023 – to $15.50 for all employers of every size because of inflation. But more than 30 California cities or counties have their own local ordinances that set the minimum wage even higher and with increases that take effect each January or July. Employers in at least six cities will begin paying a higher minimum wage effective July 1.

Employers always must pay the local minimum wage in the employer’s place of business if it is higher than the state minimum wage. And employers with exempt employees should evaluate their workers’ salaries because exempt employees in California generally must earn a minimum monthly salary of no less than two times the state minimum wage for full-time employment.

January 2023 wage increase tied to inflation

The state minimum wage has increased every year for employers of all sizes since 2017 in accordance with legislation signed into law by former Gov. Jerry Brown.

That law caps the minimum wage at $15. Employers with 26 or more employees reached the cap in January of this year; employers with fewer than 26 employees are currently paying a minimum wage of $14 and will reach the $15 cap Jan. 1, 2023.

However, a provision in the law allows wages of at least $15 to be raised annually up to 3.5% (rounded to the nearest 10 cents) for any increase in inflation of over 7% as measured by the national Consumer Price Index. And that is what is now happening. Gov Gavin Newsom announced in May that all employers of every size will begin paying a minimum wage of $15.50 beginning Jan. 1, 2023.

Some city minimum wages may be higher

Minimum wages or “living wages” are rising more quickly than the state minimum wage in some areas of California. Employers in more than 30 cities or counties are already required to pay an hourly minimum wage ranging up to over $17. 

Governor may suspend scheduled increases

The governor can suspend a scheduled wage increase in the event of an economic slowdown (defined as negative job growth combined with negative retail sales for a specified time period) or if a budget deficit is forecasted for the current budget year up to two additional years. 

The California Minimum Wage notice for 2023 will be available later this year on the Department of Industrial Relations’ website.

Story sourced from cda.org

 

Student Loan Relief Extended Through December 31

August 24, the U.S. Department of Education (Department) announced a final extension of the pause on student loan repayment, interest, and collections through December 31, 2022. Borrowers should plan to resume payments in January 2023. 

To address the financial harms of the pandemic by smoothing the transition back to repayment and helping borrowers at highest risk of delinquencies or default once payments resume, the Department will provide targeted student debt cancellation to borrowers with loans held by the Department of Education. Borrowers with annual income during the pandemic of under $125,000 (for individuals) or under $250,000 (for married couples or heads of households) who received a Pell Grant in college will be eligible for up to $20,000 in debt cancellation. Borrowers who met those income standards but did not receive a Pell Grant will be eligible for up to $10,000 in relief. Learn more on how borrowers can claim this relief at https://studentaid.gov/h/apply-for-aid/fafsa. 

During this extension of relief for federal student loan borrowers, repayments, interest, and collections are still halted, and any borrower with defaulted federally held loans whose employer continues to garnish their wages will receive a refund of those garnishments. The relief had been set to expire on August 31.

 

Tax-Advantaged Repayment Support

In light of the difficulty in recruiting qualified employees, some employers are taking advantage of the tax-advantage of providing payment of student loan and educational expenses as a benefit.

The Consolidated Appropriations Act, 2021, extended for five years pandemic-related relief that allows employer-provided student loan repayment as a tax-free benefit to employees under Section 127 of the Internal Revenue Code. Through 2025, employers can continue to make contributions of up to $5,250 per employee annually toward eligible education expenses, such as tuition or student loan assistance, without raising the employee's gross taxable income.

Advocates of tax-advantaged loan benefits are lobbying Congress to make this change permanent.

Sourced from APA news post, The U S Department of education, and SHRM article.

 





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