The federal Tax Cuts and Jobs Act provisions generally took effect on January 1, 2018. However, the effective dates for state changes will vary as determined by their respective legislative bodies.
Two provisions of the federal Tax Cuts and Jobs Act affecting payroll taxability of fringe benefits, could also affect state taxability. Taxes affected include withholding, unemployment tax and other state employment taxes such as disability insurance. The two state taxability provisions to monitor are bicycle commuting benefits and moving expenses.
Fringe Benefits Impacted are:
- Bicycle commuting benefits: An employer may no longer exclude up to $20 per month in reimbursements to an employee for bicycle commuting costs.
- Moving expenses: Qualified moving expenses must now be included in gross income and wages; except in the case of an armed forces member on active duty who moves pursuant to a military order.
Paylocity will continue to monitor current and pending legislation as it develops. We will continue to advocate on our clients’ behalf.
Thank you for choosing Paylocity as your Payroll Tax partner. Should you have any questions please contact your Paylocity account manager.
This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.