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Now is a Great Time to Review Your Tax Withholding
It’s tax time, and many employees are in the process of filing their returns. Sometimes employees are surprised by the amount of their refund because it’s different than they’ve seen in the past.
This can be for a variety of reasons:
- Both state and federal income tax laws change frequently.
- The employee experienced significant life events like marriage, divorce, buying a home, or having a child.
- The employee had additional income from a part time job that wasn’t included in their withholding calculation. This can include not only jobs for which the employee received a Form W-2, but also income reported on a Form 1099 such as driving for a ride sharing service, selling items online, or other “gig economy” jobs.
Employees are encouraged to use the IRS Tax Withholding Estimator at least once each year to determine the amount of withholding that would be appropriate for their income.
Updated Payroll Tax Forms and Instructions
The IRS has released the final versions of the 2025 Form 941, Employer’s Quarterly Federal Tax Return and its instructions. The March 2025 revision must be used for first quarter 2025 tax reporting. The form and instructions can be found on the IRS website by clicking here.
The IRS has also released the final version of the 2025 General Instructions for Forms W-2 and W-3, including a new procedure for requesting an extension to furnish recipient copies of Form W-2.
Tax Credits Available to Employers
Employers may be eligible to claim several tax credits, including the Work Opportunity Tax Credit (WOTC), the Employer-Provided Childcare Credit, and Educational Assistance Programs. These incentives are designed to support businesses that hire from certain targeted groups, provide childcare services to employees, or offer educational benefits.
The Work Opportunity Tax Credit can provide significant tax savings for employers who hire individuals from specific groups, such as veterans or long-term unemployment recipients. Eligible employers can claim up to 40% of the first $6,000 in wages paid to qualifying employees, with higher amounts available for certain veterans. More information on how Mize CPAs can assist your company with WOTC services can be found here.
For businesses that offer childcare services to their employees, the Employer-Provided Childcare Credit can be claimed. This credit is worth up to 25% of qualified childcare facility expenses plus 10% of qualified childcare resource and referral expenses, with a maximum credit of $150,000 per year.
Additionally, employers can establish Educational Assistance Programs to provide tax-free benefits of up to $5,250 per employee annually. These programs can cover various educational expenses, including tuition, fees, books, and even payments toward qualified student loans.
Employers are advised to review the available resources and consult with tax professionals to determine which benefits they may qualify for and how to properly claim them on their tax returns.
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New information located on the Insurance tab in Payroll 2.0
We are rolling out a new look for the Insurance tab in Payroll 2.0 to provide more information in one place when entering insurance offers and accept/declines for ACA. A copy of both the Benefit profile (offer) and the Cost Center are now located on the Insurance tab (accept/decline entry). Both items are still on the Basic tab as well. This should reduce the number of clicks and provide easier verification of correct data entry.
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Mize Connect Webinar | Available March 25, 2025
You will receive an email March 25 at 1:00 pm to watch the Mize Connect Webinar.
The purpose of the webinar is to showcase what the Mize Connect employee portal app has to offer. Included will be how the registration works, usage of the payroll functions & how to support employees.
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California
Minimum Wage for Unincorporated Los Angeles County
Employers will need to pay a minimum wage of $17.81 per hour effective July 1, 2025. More information can be found here.
Pay Data Reporting for 2024
The portal for reporting pay data reports for 2024 is now open, with reports due on May 14, 2025. Private employers with 100 or more employees are required to submit pay, demographic, and other workforce data to the Civil Rights Department. More information can be found by clicking here.
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Kentucky
New Employer Portal
Beginning March 14, 2025, Kentucky employers will use the new MyTaxes Portal for filing withholding returns and making withholding payments. The Department of Revenue sent emails with login credentials and instructions to users the first week of March.
Disaster Relief
The IRS has announced tax filing and payment extensions for individuals and businesses in Kentucky affected by severe storms beginning February 14, 2025. Tax filing and payment deadlines are extended to November 3, 2025 for quarterly payroll tax returns normally due on April 30, July 31, and October 31, 2025. Payroll tax deposits originally due between February 14 and March 3, 2025 will not be subject to penalties as long as those deposits were made by March 3, 2025.
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Maryland
Employer Withholding Guide Update
A new Maryland Employer Withholding Guide has been issued effective for wages paid on or after January 1, 2025.
Montgomery County, Maryland Minimum Wage
The county is set to implement its annual minimum wage increase on July 1, 2025. Employers with 51 or more employers will be required to pay $17.65 per hour (a 50-cent increase from the previous year). Employers with 11-50 employees will be required to pay $16 per hour, while small employers of 10 or fewer employees must pay at least $15.50 per hour.
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Michigan
Earned Sick Time
On February 21, 2025, the Michigan Earned Sick Time Act (ESTA) went into effect, establishing changes to the state’s earned sick time laws. To view a recent webinar and more information about the Earned Sick Time Act click here.
Minimum Wage
The Michigan minimum wage increased to $12.48 per hour effective February 21, 2025. Employers should use the updated poster that reflects this change. In addition, the tip credit increased to $7.74 per hour.
Both the minimum wage and tip credit will be adjusted for inflation in future years.
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Minnesota
Minnesota Paid Leave has announced the initial rates for the state's new Paid Leave program, set to begin in 2026. Employers and employees will split the 0.88% contribution evenly, for a rate of 0.44% each. The total premium payment will be split between medical leave premiums and family leave premiums, with 0.61% going to medical leave and 0.27% going to family leave. The first premiums will be due April 2026 based on wage reports submitted from January 1, 2026 through March 31, 2026. The deductions are limited to a wage base consistent with the Social Security tax wage base for the given year.
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Montana
The Montana Department of Revenue has addressed claims that the state’s wage withholding tables were incorrect. After reviewing the tables, the Department did not find any errors and emphasized that employers should update their MW-4 forms to the December 2024 revision, which reflects changes in the tax code, additional jobs, and spousal income.
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New Mexico
Effective March 1, both the City and County of Santa Fe increased its living wage from $14.60 per hour to $15 per hour.
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New York
Changes to the state’s withholding tax and wage reporting forms and online filing will occur in March 2025. Employers will not be able to schedule withholding tax payments for dates after March 20 or electronically file first quarter 2025 returns. When the changes to the filing system go live on March 21, 2025, employers will be able to resume scheduling payments and begin electronically filing first quarter withholding returns. More information can be found here.
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Ohio
Effective April 9, 2025, employers will be required to provide employees with a written or electronic pay statement or provide access to an earnings statement for each pay period. The statement must include the employee’s name, address, total gross wages, total net wages, description of each income and deduction item, and hours worked, among other information. More details about the Pay Stub Protection Act will be forthcoming.
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Washington
Seattle Social Housing Tax
Employees making more than $1 million per year will be subject to a new 5% tax, retroactive to January 1, 2025 and payable by January 31, 2026. This tax is imposed solely on the employer and is in addition to Seattle’s existing payroll expense tax.
More information for employers about this new Social Housing Tax, including an upcoming webinar, can be found by clicking here.
Unincorporated parts of King County were subject to a new minimum wage of $20.29 per hour effective January 1, 2025. To determine whether a business falls within unincorporated King County or another jurisdiction, the county has created this interactive map.
Burien Minimum Wage Law
Beginning March 25, 2025, Burien’s minimum wage will be increased to $21.10 per hour in order to match the minimum wage in neighboring Tukwila. The new rate will be phased in for medium and small employers and will be adjusted annually for inflation. Your Mize payroll processor will contact you once the Burien minimum wage program is updated in order to assist you with implementing a plan.
Also, certain employers will be required to offer existing employees with additional work hours before hiring new employees, temporary workers, or contractors if their existing part-time workers have the skills and experience to perform the work.
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West Virginia
The IRS announced extended tax filing and payment deadlines for individuals and businesses in six counties in West Virginia affected by severe weather events beginning February 15, 2025. Tax filing and payment deadlines are extended to November 3, 2025 for quarterly payroll tax returns normally due on April 30, July 31, and October 31, 2025. Payroll tax deposits originally due between February 15 and March 3, 2025 will not be subject to penalties as long as those deposits were made by March 3, 2025.ce to perform the work.
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Electronic Pay Solutions
Employees like to get paid on time. Sometimes that’s harder than it might seem. With delivery issues, severe weather, and wildfires frequently in the news and maybe even your backyard, getting paychecks to employees can be difficult. That’s where electronic payroll solutions like direct deposit and pay cards can be a great solution.
Electronic pay solutions can also save you money. The costs of both printing and delivery are going up, which increases your payroll fees. With direct deposit and pay cards, employees can access their pay stubs and year-end Forms W-2 and 1095 online through the Mize payroll portal.
Read more about the benefits of electronic pay from our Insights blog by clicking here.
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On-Demand Pay
Tapcheck is an on-demand pay provider, empowering employees to take control of payday. Seamlessly integrated with payroll systems, Tapcheck boosts retention, productivity, and financial wellness—at no cost to employers and with no change to payroll.
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