Temporary decrease in payroll taxes There is a one-year reduction to payroll taxes for employees in 2011 to 4.2%. Typically, taxpayers are subject to withholding of 6.2% for FICA (Social Security and Medicare) taxes. Employers are still subject to the 6.2% withholding amount.
Health care for children under age 27 In the past, health insurance coverage provided by an employer that covered an employee’s adult children over the age of 19 (24 if a student) was to be included as a fringe benefit on the employee’s W-2. A law change effective in 2010 increased the age limit to 26 and removed the student qualification. All adult children, students or not, can be covered under an employer health plan without any fringe benefit reporting so long as the child is under age 27 at the end of the tax year. The state of Wisconsin has passed legislation conforming Wisconsin’s law to the federal law for adult dependent health care coverage.
Employer-provided cell phones An employer-provided cell phone will not be considered income to the employee if it is provided for non-compensatory business reasons. Cell phones provided to promote employee morale, attract prospective employees, or serve as a reward are not provided for non-compensatory reasons. An example of a non-compensatory business reason is to increase employees’ availability to speak with clients. Usage of a cell phone for business purposes will be treated as an excludable fringe benefit.
