Maryland's Governor is scheduled to sign this morning a bill that, retroactive to Jan. 1, 2012, will raise income tax rates for individuals making more than $100,000 annually, and joint filers with incomes exceeding $150,000. According to published reports, new withholding tables will be posted on the Comptroller of Maryland website that will reflect the tax increase. The tables will require increased withholding in the third and fourth quarters, but will not require employers to adjust withholding deducted for the first half of the year.

We will provide you with links when the tax tables become available.

Service Release 1 for the Q4 2011 Product Update is now available on the web. This applies to versions 7.9, 9.0, and 9.1. Here is a summary of all the content included in this update.

Tax updates supplementing the Q4 Product Update:

• Social Security Employee Withholding Rate Remains at 4.2% until 2/29/2012 due to Payroll Tax Holiday Extension
• FSOC Limit set to $110,100
• Railroad Tier I Employee Withholding Rate Remains at 4.2% until 2/29/2012 due to Payroll Tax Holiday Extension
• Railroad Tier I, Tier II and UI Wage Base for 2012
• State Withholding Tax Changes, Effective January 1, 2012 for the following:
  • Delaware
  • Hawaii
  • Massachusetts
  • Missouri
  • Oklahoma
  • Rhode Island
  • Vermont
• Tax Changes Effective January 1, 2012:
  • Hawaii Employment Training
  • Michigan Unemployment Taxable Wage Base Change
  • New Jersey Family Leave Insurance Employee Withholding Rate Change
  • New York State and Yonkers Withholding
  • Ohio Miami East 5504 SD, Ohio Earned Income Tax Based
  • Ohio Local Income
• Montana Administrative Fund Tax Wage set to $27,000
• Ohio Locals Municipality Code for Annual W2 Reporting to RITA for Tax Year 2011
• PA Local LST taxes updated to correct rate.
• Address field added. Versions 9.0 and 9.1 capture the address for each employment PSD NR code. (Sage Abra Suite version 7.x does not contain PA ACT32 mandated changes. Handle the reporting requirements manually by creating a multi-record custom detail to track the information.)

Electronic File Changes: (Apply the SR1 prior to creating the electronic file.)

· 1099 Electronic File Changes for Tax Year 2011

· Massachusetts W2 File Spec Changes for 2011

· Indiana EFW2 File Changes for Tax Year 2011

· Wisconsin EFW2 File Changes for Tax Year 2011

To download your Sage HRMS product update

1. Visit the Sage Customer Portal

2. Enter your Logon Id and Password (or sign up for a portal logon)

3. Select Payroll Tax Updates on the home page

4. Select the Product Update download specific to your Sage Abra Suite version

5. Right click and Save Target As to the appropriate file location

6. Unzip the files into a new directory

Note: It is necessary to access Abra Suite and run the 'Apply Legislative Update' from within System Tax Tables in order for Service Release 1 changes to take effect.

Please call Sage HRMS Support at 800-829-0170 for further assistance.

As of fourth quarter 2011, a new form/report will be available for users of Sage Abra Suite using version 9.0x and 9.1x. This is the Form 940 including Schedule A. The form is located in Reports> Payroll>Year-End. There is an option for a Pre-Close Form 940 Report and the Form 940.

The Pre-Close Form 940 can be viewed after Trial Quarter Close has been run throughout the year for interim balancing. It is recommended to print this report each quarter as these totals are cumulative.

A new database, Employer 94011 (PR94011.DBF), will be populated during the fourth quarter of the Final Quarter Close process. This form is also available in Payroll>Processes>Edit Quarter/Year-End Forms. All fields will be available for edit. The following fields must be edited for values to appear on the Form 940:

• Type of Return
• For Overpayment option of Apply to Next Return or Send a Refund
• Part 6—May we speak with your third-party designee?
• Part 7—Sign here.

The most important item for this form to be correct is the selection of the earnings and deduction codes for the FUTA tax code. The Internal Revenue Service (IRS) has specific guidelines on what earnings and deductions should be reported on the Form 940. The information that appears on the Form 940 is based on the customer setup of the FUTA tax code. If these codes are not set up correctly, the amounts on this report may be incorrect.

Believe it or not, we've already reached the third quarter of 2011, and that means that the next round of tax updates is not available from SupportPlus Online. Here are the steps you need to follow in order to update your Abra Payroll.

Use these steps to download your quarterly tax update

1. Visit the SupportPlus log on page
2. Enter your User Name and Password (or register for a new member login)
3. Select Quarterly Tax Updates Available here
4. Select the Sage Abra Suite Q3 2011 Payroll Update download specific to your Sage Abra version
5. Follow the simple instructions to download the tax update

Here are some tips for a successful tax update:

• Check your software version.
  The Q3 2011 tax update is compatible with Sage Abra Suite v7.8, and Sage Abra Suite v9.0. You will need to select the Sage Abra Suite Q3 2011 Payroll Update download specific to your Sage Abra version.
• Set aside enough time for the download.
  Most of the time, downloading only takes a few minutes. But customers with a dial-up Internet connection may need to set aside about 30 minutes for the file transfer process.
• Install your updates before running your trial quarter close.
  The accuracy of your tax reports depends on having the most up-to-date tax tables loaded onto Sage Abra.
• Let us know if you need help.
  Please don't hesitate to contact us if you need technical help with downloading the Q3 2011 tax update.

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As Sage moves into the future with Sage Abra Payroll, tax updates for the older versions of the software will cease. This means that those still using Sage Abra v7.X will need to upgrade to the latest version (v9.1 at the time of this post - read more about Abra v9.1 here). The cutoff date for Abra v7.X updates was previously January 2012, but Sage has now extended that date to the end of the first quarter of 2012. Those extra three months should help make everybody's transitions into the latest version easier. And remember, the upgrade from v7.X to v9.1 is included in your Sage support contract, so there's no new software to purchase.

Here's the official release from Sage:

To provide more opportunity for our customers on version 7.8 to upgrade their Abra product, we are extending the Quarterly Tax Update. Please review the updated schedule below. For users with Sage Abra Payroll functionality, the chart below provides the Quarterly Tax Updates schedule for a given period and supported versions of Sage Abra.

 

Today, June 23rd, the Internal Revenue Service announced an increase in the optional standard mileage rates for the final six months of 2011. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business and other purposes.

The rate will increase to 55.5 cents a mile for all business miles driven from July 1, 2011, through Dec. 31, 2011. This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011, as set forth in Revenue Procedure 2010-51. In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2011. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

"This year's increased gas prices are having a major impact on individual Americans. The IRS is adjusting the standard mileage rates to better reflect the recent increase in gas prices," said IRS Commissioner Doug Shulman. "We are taking this step so the reimbursement rate will be fair to taxpayers."

While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

The new six-month rate for computing deductible medical or moving expenses will also increase by 4.5 cents to 23.5 cents a mile, up from 19 cents for the first six months of 2011. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

The new rates are contained in Announcement 2011-40 on the optional standard mileage rates, which you can read by following this link. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Mileage Rate Changes

Purpose	Rates 1/1 through 6/30/11	Rates 7/1 through 12/31/11
Business	51	55.5
Medical/Moving	19	23.5
Charitable	14	14

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The quarterly tax update for Sage Abra Payroll is now available from SupportPlus Online. Following these steps will help you update your payroll system.

Here are some tips to ensure the success of your update

• Check your software version.
  The Q2 2011 tax update is compatible with Sage Abra Suite v7.8, and Sage Abra Suite v9.0. You will need to select the Sage Abra Suite Q2 2011 Payroll Update download specific to your Sage Abra version.
• Set aside enough time for the download.
  Most of the time, downloading only takes a few minutes. But customers with a dial-up Internet connection may need to set aside about 30 minutes for the file transfer process.
• Install your updates before running your trial quarter close.
  The accuracy of your tax reports depends on having the most up-to-date tax tables loaded onto Sage Abra.
• Let us know if you need help.
  Please don't hesitate to contact us if you need technical help with downloading the Q2 2011 tax update.

Use these steps to download your quarterly tax update

1. Visit the SupportPlus log on page
2. Enter your User Name and Password (or register for a new member login)
3. Select Quarterly Tax Updates Available here
4. Select the Sage Abra Suite Q2 2011 Payroll Update download specific to your Sage Abra version
5. Follow the simple instructions to download the tax update

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The state of California is no longer accepting magnetic media report through the mail. In order to submit your reports electronically, you will need to create the UIWAGE.TXT file, which you can do easily by following this tutorial for Sage Abra Payroll.

1) Select Reports > Payroll > Electronic Media Reporting

2) Select Quarterly Tax and Wage File

3) Select Employer(s)

4) Enter Quarter End Date

5) Select CA for State

6) Select a specific destination directory or use the default Abra Export folder. Click OK

Screenshot:

7) Exclude any applicable employees

8) Enter any information on the CA Quarterly Wage and Tax File Criteria screen. Click OK.

Screenshot:

9) Enter the pay period end date that included April, 12, 2011; May 12, 2011; and June 12, 2011. Click OK

10) File "UIWage.txt" created. message should now appear. Click OK.

11) Browse to the directory path the UIWage.txt file was created in:

1. Right-click and Zip the UIWage.txt file.
2. Go to the e-Services for Business web page.
3. Login and click on Attach A Return File.
4. Under 'Type' select DE 9C ICESA, ZIP.