December 22, 2023
As we approach year-end, our Client Accounting Services team is pleased to provide you with important information to assist you in making necessary changes for the new tax year. Our 2023 Payroll Summary is attached for a quick reference guide to payroll tax withholdings and deposit schedules.
- Mileage Rates 2022 (2023 pending)
Mileage Rates were changed mid-year, the per-mile rate increased by 4 cents:
- Business Use 1/1/2022 thru 6/30/22: 58.5 cents
- Business Use 7/1/2022 thru 12/31/22: 62.5 cents
- Federal Unemployment Tax Act (FUTA) Credit Reduction: California employers will be subject to an additional retroactive .3% FUTA tax for the full 2022 calendar year. This results in a maximum of $21.00 additional tax per employee, limited to $7,000.00 of wages per employee. The due date for any outstanding 2022 FUTA tax is January 31, 2023.
January 31, 2023, Deadlines
- The deadline to provide W-2s to your employees and to file with the government is January 31, 2023.
- The deadline to provide 1099s to recipients and to file with the government is January 31, 2023. If we prepare your 1099 forms, we must receive your completed worksheet by January 24, 2023, to guarantee timely filing.
- You can download our 1099 worksheet to gather recipient information.
- Please note: If the 1099 worksheet is provided to us later than January 24, 2023, we cannot guarantee that your forms will be filed timely, and an additional rush processing fee of $150 per filing entity will apply. Late filing of mandatory 1099s could result in fees.
Summary of Changes and Reminders for 2023
- Social Security: The earnings limit increased to $160,200. The rate remains at 6.2% for both employees and employers.
- Medicare: The rate remains at 1.45% with no limit. Employees who earn more than $200,000 ($250,000 for married couples filing jointly) will continue to pay an extra 0.9% Medicare tax in 2023; employers do not pay a matching portion for this amount.
- State Disability Insurance (SDI): The rate decreased to 0.90%, and the limit is raised to $153,164 for 2023. These changes should be installed with your payroll system tax table update.
- State Unemployment Insurance (SUI): You can find your new rate on California's Economic Development Department (EDD) Unemployment Insurance Rate page.
- If your SUI rate has changed for 2023, you must manually change it in your payroll system. Tax table updates do not include your new SUI and Employment Training Tax (ETT) rate. Make this change before you process a 2023 payroll.
- Some sales tax rates have changed. For rate information, please visit the California Franchise Tax Board’s Sales and Use Tax Rates page.
2023 Retirement Contribution Limits
- See our recent article on 2023 Retirement Contribution Limits Adjusted for Inflation.
Please contact your accountant, email our team, or call (209) 527-4220 if you have questions about this article. We will be happy to assist with your payroll or 1099 inquiries.
Grimbleby Coleman CPAs