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Indiana Military Family Leave
Photo: Jeffrey Lin

Indiana’s military family leave law generally applies to employers with at least 50 employees. Under the law, employers must grant eligible employees up to 10 days of unpaid leave per calendar year during one or more of the following periods:

  • During the 30 days before active duty orders are in effect
  • During a period in which the person ordered to active duty is on leave while active duty orders are in effect
  • During the 30 days after the active duty orders are terminated

An eligible employee is an employee who:

  • Has been employed by an employer for at least 12 months;
  • Has worked at least 1,500 hours during the 12 month period immediately preceding the day the leave begins; and
  • Is the spouse, parent, grandparent, child, or sibling of a person who is ordered to active duty (full-time service on active duty orders in the U.S. Armed Forces or the National Guard for a period that exceeds 89 consecutive calendar days).

An eligible employee may elect, or an employer may require the employee, to substitute any earned paid vacation leave, personal leave, or other paid leave, except for paid medical or sick leave, available to the employee for any part of the 10 day period of military family leave.

An employee must provide at least 30 days’ notice before the date on which he or she intends to begin the leave, unless the active duty orders are issued less than 30 days before the date the requested leave is to begin. The employer may require verification of eligibility for the leave.

Upon return from leave, an employee generally must be restored to the position held before the leave or an equivalent position with equivalent seniority, pay, benefits, and other terms and conditions of employment.

For more information on Indiana's military family leave law, please click here.

Note: The state laws summaries featured on this site are for general informational purposes only. In addition to state law, certain municipalities may enact legislation that imposes different requirements. State and local laws change frequently and, as such, we cannot guarantee the accuracy or completeness of the information featured in the State Laws section. For more detailed information regarding state or local laws, please contact your state labor department or the appropriate local government agency.

IRS tells taxpayers who got a big refund to do a "paycheck checkup."

After filing tax returns, many people put taxes far out of their mind. However, taxpayers who received a large tax refund this year should think about taxes again…and the sooner the better. The IRS urges these taxpayers to visit the Withholding Calculator on IRS.gov and do a “paycheck checkup.” Doing so will help them make sure their employers are withholding the correct amount of taxes from their paychecks.

Most taxpayers receive refunds averaging around $2,800. Taxpayers who receive large refunds could receive more of their money throughout the rest of this year, rather than waiting until they file their tax return next year.

The Tax Cuts and Jobs Act was passed last year, and it included many tax law changes. Taxpayers who calculate their tax payments throughout the year in order to receive a refund at tax time should check to see how the new tax law affects them. A “paycheck checkup” can help taxpayers apply the new law changes to their situation.

Here are some of the changes that affect taxpayers who received a refund this year, but also many other people:

  • The law reduced tax rates and changed tax brackets.
  • The standard deduction nearly doubled. The new rules raise the standard deduction to $24,000 for joint filers and $12,000 for singles for 2018. Many taxpayers who previously itemized their deductions will find the standard deduction is now of bigger benefit.
  • The law removed personal exemptions.
  • The child tax credit is bigger and the phaseout amount is higher.
  • The law added a new tax credit for dependents who can’t be claimed for the child tax credit.
  • The law limited or discontinued certain deductions.

The calculator can help navigate each tax situation to make sure the amount withheld best fits the need of every taxpayer. It can help taxpayers decide if getting more money in each paycheck could make more financial sense than getting a refund at tax time next year. Adjusting withholding amounts now can also prevent having too little tax withheld, resulting in an unexpected tax bill next year.

For information about how to use the calculator and how to change withholding, taxpayers can check out the IRS Tax Reform Tax Tips on IRS.gov.

Taxpayers may also need to determine if they should make adjustments to their state or local withholding. They can contact their state's department of revenue to learn more.

More information:
Withholding Calculator Frequently Asked Questions
Tax Withholding
Tax Reform page on IRS.gov

The new tax reform law which was enacted on December 22, 2017, and commonly called the “Tax Cuts and Jobs Act” (TCJA), is the biggest federal tax law overhaul in 31 years.  Nearly everything in the TCJA went into effect on January 1, 2018.  It has both good and bad news for taxpayers.

Now, many months later, we are just beginning to get guidance from the IRS regarding various aspects of the new law.  Hopefully, this will continue. Some technical corrections from Congress are also needed.

Below are highlights of some of the most significant changes affecting individuals and businesses taxpayers.  Except where noted, these changes are effective for tax years beginning after December 31, 2017.

Remember that this is just a brief overview of some of the most significant provisions of the TCJA.  There are additional rules and limits that apply as well as additional provisions.

Highlights of the Tax Cuts and Jobs Act

Individuals | Businesses

If you have any questions regarding how this new tax law may affect you and/or your business, please do not hesitate to contact us.  Or, better yet, we could prepare a tax projection for you for 2018 using the tax law changes and new tax rates.  This would be an opportunity for you to do some tax planning for 2018 and future years.

It would also be a good time to look into whether federal tax withholdings should be adjusted on your paychecks. There is a Withholding Calculator on the IRS website that can be used to do a “paycheck checkup” to see if too little or too much tax is being withheld from your wages. We can also assist you with that computation. Any changes to be made would require submitting a new Form W-4 to your employer.

We can be reached at 812-663-7567 or 800-676-7567.  We look forward to hearing from you.

 

Individuals

  • Drops of individual income tax rates ranging from 0 to 4 percentage points (depending on the bracket) to 10%, 12%, 22%, 24%, 32%, 35% and 37% - through 2025
  • Near doubling the standard deduction to $24,000 (married couples filing jointly), $18,000 (heads of households), and $12,000 (singles and married couples filing separately) – through 2025
  • Elimination of personal exemptions – through 2025
  • Doubling of the child tax credit to $2,000 and other modifications intended to help more taxpayers benefit from the credit – through 2025
  • Elimination of the individual mandate under the Affordable Care Act requiring taxpayers not covered by a qualifying health plan to pay a penalty – effective for months beginning after December 31, 2018
  • Reduction of the adjusted gross income (AGI) threshold for the medical expense deduction to 7.5% for regular and AMT purposes – for 2017 and 2018
  • New $10,000 limit on the deduction for state and local taxes (on a combined basis for property and income taxes; $5,000 for separate filers) – through 2025
  • Reduction of the mortgage debt limit for the home mortgage interest deduction to $750,000 ($375,000 for separate filers), with certain exceptions – through 2025
  • Elimination of the deduction for interest on home equity debt – through 2025
  • Elimination of the personal casualty and theft loss deduction (with an exception for federally declared disasters) – through 2025
  • Elimination of miscellaneous itemized deductions subject to the 2% floor ( such as certain investment expenses, professional fees and unreimbursed employee business expenses) – through 2025
  • Elimination of the AGI-based reduction of certain itemized deductions – through 2025
  • Elimination of the moving expense deduction (with an exception for members of the military in certain circumstances) – through 2025
  • Expansion of tax-free Section 529 plan distributions to include those used to pay qualifying elementary and secondary school expenses, up to $10,000 per student per tax year
  • AMT exemption increase, to $109,400 for joint filers, $70,300 for singles and heads of households, and $54,700 for separate filers – through 2025
  • Doubling of the gift and estate tax exemptions, to $10 million (expected to be $11.2 million for 2018 with inflation indexing) – through 2025
  • For children who have unearned income and are subject to the kiddie tax, they must file their own tax return and income will be taxed at trust rates.

Businesses

  • Replacement of graduated corporate tax rates ranging from15% to 35% with a flat corporate rate of 21%
  • Repeal of the 20% corporate AMT
  • New 20% qualified business income deduction for owners of flow-through entities (such as partnerships, limited liability companies and S corporations) and sole proprietorships – through 2025
  • Doubling of bonus depreciation to 100% and expansion of qualified assets to include used assets – effective for assets acquired and placed in service after September 27, 2017, and before January 1, 2023
  • Doubling of the Section 179 expensing limit to $1 million and an increase of the expensing phaseout threshold to $2.5 million
  • Other enhancements to depreciation-related deductions
  • New disallowance of deductions for net interest expense in excess of 30% of the business’s adjusted taxable income (exceptions apply)
  • New limits on net operating loss (NOL) deductions
  • Elimination of the Section 199 deduction, also commonly referred to as the domestic production activities deduction or manufacturers’ deduction – effective for tax years beginning after December 31, 2017, for noncorporate taxpayers and for tax years beginning after December 31, 2018 for C corporation taxpayers.
  • New rule limiting like-kind exchanges to real property that is not held primarily for sale
  • New tax credit for employer-paid family and medical leave – through 2019
  • New limitations on excessive employee compensation
  • New limitations on deductions for employee fringe benefits, such as entertainment and, in certain circumstances, meals and transportation
  • Taxpayers whose average annual gross receipts for the three prior years are less than $25million may now use the cash method of accounting
  • The uniform capitalization rules of Section 263A for inventory are no longer required for businesses under the $25 million threshold referred to above.

 

Eligible employers who provide paid family and medical leave (FMLA) to their employees during tax years 2018 and 2019 might qualify for a new business tax credit. This new employer credit for family and medical leave is part of tax reform legislation passed in December 2017. Here are some facts about the credit to help employers find out if they might be able to claim it.

To be eligible, an employer must:

  • Have a written policy that meets several requirements, as detailed in Notice 2018-71.
  • Provide:
    • At least two weeks of paid family and medical leave to full-time employees.
    • A prorated amount of paid leave for part-time employees.
    • Provide pay for leave that is at least 50 percent of the wages normally paid to that employee.

The credit applies to these dates:

  • It is available for wages paid in taxable years beginning after Dec. 31, 2017, and before Jan. 1, 2020.

The amount of the credit:

  • The credit is generally equal to 12.5 to 25 percent of paid family and medical leave for qualifying employees.

Here’s what kind of leave qualifies:

  • The leave can be for any or all of the reasons specified in the Family and Medical Leave Act:
    • Birth of an employee’s child.
    • Care for the child.
    • Placement of a child with the employee for adoption or foster care.
    • To care for the employee’s spouse, child, or parent who has a serious health condition.
    • A serious health condition that makes the employee unable to perform the functions of his or her position.
    • Any qualifying exigency due to an employee’s spouse, child, or parent being on covered active duty – or having been notified of an impending call or order to covered active duty – in the Armed Forces.
    • To care for a service member who is the employee’s spouse, child, parent, or next of kin.
  • However, leave paid by a state or local government, or that is required to be provided by state or local law, does not count toward the 50 percent.

Some employers are eligible to claim the credit retroactively to the beginning of their taxable year:

  • Normally employers can only claim the credit based on eligible leave taken after their new or amended policy goes into effect.
  • Read Notice 2018-71 for a description of special rules for when an employer can claim the credit retroactively.

To claim the credit, employers will:

  • Attach Form 8994 to their return. The IRS expects to have this new form available later in 2018.

The Notice sets out special rules and limitations that apply:

  • For example, only paid family and medical leave provided to employees whose prior-year compensation was at or below a certain amount qualify for the credit.
    • Generally, for tax-year 2018, the employee’s 2017 compensation from the employer must be $72,000 or less.

More Information:
Tax Reform Provisions that Affect Businesses

Short-Term Health Insurance Soon Available For Up To 36 Months
Photo: Rawpixel

New Rule Loosens Current Restrictions

Effective October 2, 2018, a new rule will allow individuals to purchase short-term, limited-duration health insurance coverage for a period of less than 12 months, and renew such coverage for up to 36 months. Under current law, the maximum coverage period for short-term, limited-duration health insurance is less than 3 months, and these policies cannot be renewed.

Notably, short-term, limited-duration health insurance is:

  • Not required to comply with the Affordable Care Act's ban on pre-existing condition exclusions and lifetime and annual dollar limits.
  • Not required to comply with the Affordable Care Act's essential health benefits requirement, which requires individual health insurance policies to cover, among other things, hospitalizations, emergency services, and maternity care.
  • Not "minimum essential coverage," meaning that policyholders may remain liable for an individual mandate penalty for any month in 2018.

View the new rule and download the fact sheet.

Check out our Health Care Reform section for more on the Affordable Care Act.

RBSK Payroll
RBSK Payroll Partners