The IRS has updated Notice 931 (Deposit Requirements for Employment Taxes) to include the tax deposit rules for the 2023 year.
The deposit schedule employers must use (i.e., monthly or semi-weekly) is based on the total tax liability they reported during the lookback period. For employers filing Form 941 (Employer’s Quarterly Federal Tax Return), an employer’s deposit schedule for 2023 is based on the lookback period beginning July 1, 2021 and ending June 30, 2022. An employer reporting $50,000 or less of Form 941 taxes for the lookback period is a monthly depositor, and an employer reporting more than $50,000 of Form 941 taxes is a semiweekly depositor.
An employer with a Form 941 tax liability of less than $2,500 during the current or preceding quarter, who does not incur a $100,000 next-day deposit obligation during the current quarter, is not required to make monthly or semiweekly deposits if the taxes are paid in full with a timely filed return. An employer accumulating a tax liability of $100,000 or more on any day during a deposit period must deposit the tax by the next “business day,” regardless of whether the employer is a monthly or semiweekly depositor. A “business day” is any day other than a Saturday, Sunday, or a “legal holiday.” The term “legal holiday” means any legal holiday in the District of Columbia.
The IRS considers a new employer’s tax liability to be zero, which makes a new employer a monthly depositor for the first year of business.
The lookback period for annual return filers (Forms 943, 944, 945, or CT-1) is the calendar year preceding the previous year. The lookback period for 2023 tax deposits is the 2020 tax year.
Adjustments: The lookback period is based on the tax liability as originally reported. If an employer subsequently files Form 941-X, 943-X, 944-X, 945-X, or CT-1X to correct errors on the original return, the corrections are not taken into consideration for purposes of the lookback period computation.
Source: Thomson Reuters
Managing and reconciling premiums across multiple insurance carriers has become a tiresome and difficult act for many employers. As a result, employers have either limited employee benefits or have stopped performing audits entirely. NueSynergy offers a Combined Billing system that saves time and eliminates the stress employers often have when monitoring, reconciling, and submitting payments for their benefit carrier bills. Here’s how employers can utilize our service, plus the steps involved.
How Combined Billing helps employers
- Avoids managing premiums from multiple carriers
- Monitors their carrier bills for accuracy
- Retains or increases plan and benefit options for their employees
- Reconciles their carrier bills and avoids overpayment of premiums
- Consolidates all carrier premiums
- Only submits one payment for all of their carriers
Step 1: NueSynergy receives initial and ongoing enrollment information from your benefits administration system into our proprietary software.
Step 2: Monthly statements from each carrier are pulled and audited using our software.
Step 3: The employer receives a single bill for all carriers along with a detailed report that includes enrolled employees, their benefit elections, individual premium amounts, and any identified discrepancy.
Step 4: NueSynergy will initiate one ACH debit to all carriers and remit payments in the amount due to each carrier.
A number of key tax figures are adjusted each year for inflation based on the average chained Consumer Price Index (CPI) for all-urban customers for the 12-month period ending the previous August 31. The August 2022 CPI summary has been released by the Labor Department. Using the chained CPI for August 2022 (and the preceding 11 months), here are the calculated 2023 indexed amounts.
Qualified transportation fringe benefits: For 2023, an employee will be able to exclude up to $300 ($280 in 2022) a month for qualified parking expenses, and up to $300 a month ($280 in 2022) of the combined value of transit passes and transportation in a commuter highway vehicle.
Long-term care premiums: Amounts paid for insurance that covers qualified long-term care services are treated as medical expenses up to specified dollar limits that vary with the age of the taxpayer at the end of the tax year. For 2023, the dollar limits will be:
- $480 for a taxpayer age 40 or younger ($450 in 2022)
- $890 for a taxpayer age 41-50 ($850 in 2022)
- $1,790 for a taxpayer age 51-60 ($1,690 in 2022)
- $4,770 for a taxpayer age 61-70 ($4,510 for 2022)
- $5,960 for a taxpayer age 70+ ($5,640 in 2022).
Payments received under qualified long-term care insurance: Amounts received under a qualified long-term care insurance contract are generally excludable as amounts received for personal injuries and sickness, subject to a per diem limitation, which will be $420 in 2023 ($390 in 2022).
Archer MSAs: For Archer medical savings account (MSA) purposes, in 2023, a “high deductible health plan” will be a health plan with an annual deductible of:
- $2,650 – $3,950 in the case of self-only coverage ($2,450 – $3,700 for 2022)
- $5,300 – $7,900 in the case of family coverage ($4,950 – $7,400 for 2022)
- If annual out-of-pocket expenses are required to be paid (other than for premiums) covered benefits cannot exceed $5,300 for self-only coverage ($4,950 for 2022) and $9,650 for family coverage ($9,050 for 2022).
Limit on health FSA salary reduction contributions under a cafeteria plan: For purposes of determining whether a health FSA benefit will be a “qualified benefit” for the 2023 plan year, the cafeteria plan must provide that an employee may not elect to have salary reduction contributions exceeding $3,050 made to the health FSA ($2,850 for 2022).
Small employer health insurance credit: An eligible small employer may claim, subject to a phaseout, a credit equal to 50% of non-elective contributions for health insurance for its employees. The credit is reduced under certain circumstances, including if the average annual full-time equivalent wages per employee are more than $30,700 ($28,700 for 2022).
Qualified small employer HRA: For 2023, a qualified small employer HRA is an arrangement which, among other requirements, makes payments and reimbursements for qualifying medical care expenses of an eligible employee that does not exceed $5,850 ($5,450 for 2022), or $11,800 in the case of an arrangement that also provides for payments or reimbursements for family members of the employee ($11,050 for 2022).
Property exempt from levy: The value of property exempt from levy (fuel, provisions, furniture and other household personal effects, as well as arms for personal use, livestock, and poultry) may not exceed $10,810 for levies in 2023 ($10,090 for 2022). The value of property exempt from levy (books and tools necessary for the trade, business, or profession of the taxpayer) may not exceed $5,400 for levies issued in 2023 ($5,050 for 2022).
Wage levy. The weekly amount of an individual’s salary, wages, etc. exempt from levy for 2023 is $4,700 ($4,400 for 2022) multiplied by the number of the taxpayer’s dependents for the tax year of the levy, plus the taxpayer’s standard deduction, divided by 52.
Source: Thomson Reuters
A Health Care Flexible Spending Account (FSA) is a popular option for nearly everyone. This account allows you to set aside pre-tax dollars for eligible expenses, which means you don’t have to tap into your checking account when you have medical, dental, and vision expenses for you or your dependents
The following is a brief list of expenses Health Care FSA funds do and do not cover.
- Feminine hygiene products
- Copays, deductible payments, and coinsurance
- Doctor office visits and exams
- Hospital charges
- Prescription drugs
- Dental exams, x-rays, and orthodontia
- Physical therapy
- Over-the-counter medications and first aid kits
- Vision exams, contacts, and glasses
What doesn’t qualify
- Expenses incurred in a prior plan year
- Cosmetic procedures or surgery
- Dental products for general health
- General hygiene products
- Insurance premiums
NueSynergy offers a smart debit card to provide account holders with a convenient method to pay for qualified out-of-pocket expenses for themselves, their spouse, and/or any dependents. Here are some frequently asked questions about the smart debit card.
Question #1: Where is the smart debit card accepted?
The NueSynergy smart debit card is accepted at any qualified merchant (as determined by the employer’s plan document). In addition, the card can pay for office visit copays, deductible-related expenses, prescriptions, eyeglasses, and dental work – including orthodontia.
Question #2: What are the advantages of using the NueSynergy smart debit card?
Any participant who uses the card at a qualified merchant can pay for their eligible expenses. This means they don’t have to submit a manual claim and wait for their reimbursement. Another advantage of using this card is that participants can view real-time account information, balances, deposits, and payments by logging onto our website or the NueSynergy mobile app.
Question #3: How does NueSynergy verify the smart debit card is used only for qualified expenses?
As long as there’s a sufficient balance in a participant’s account, any qualified purchase will be paid directly from a reimbursement account once the card is swiped. The IRS requires participants to keep all receipts for benefit account expenses for seven years in the event of a tax audit. If there is an error or unusual transaction amount, NueSynergy is required by the IRS to verify the transaction. If a transaction cannot be electronically substantiated, a participant will be sent a notification via email to submit a detailed receipt from the place of purchase. The detailed receipt should show the date of service, description (or type) of treatment along with the amount owed.
Question #4: How do participants send required documentation for substantiation of NueSynergy smart debit card transactions?
Participants can submit documentation via the NueSynergy mobile app, NueSynergy member portal, or by email at CustomerService@NueSynergy.com.