Employer News | Quarterly Newsletter | Winter 2020

• New 2020 W-4 Form Available
• Federal Form W-2 and 1099-MISC Filing Due Dates
• Tax Security 2.0, the Taxes-Security-Together Checklist
• Never Share Your eReporting Usernames and Passwords
• Please Keep All Contact Information Up to Date with the Division
• Education for 2020
• Submitting Defined Contribution Plan Beneficiary Designation Forms to Empower Retirement
• IRS Pension Plan Limitations for Calendar Year 2020
• Reminder to Review True-Up Records with Each Payroll Submission

The IRS W-4 form has been redesigned for 2020 and is ready for use. The redesign reduces the complexity and increases the transparency and accuracy of the withholding system. While the new form uses the same underlying information as the former design, it replaces compliance worksheets with more straightforward questions that make accurate withholding easier for employees.

In the 2020 redesign, allowances are no longer used. This change is meant to increase transparency, simplicity, and accuracy of the form. In the past, the value of a withholding allowance was tied to the amount of the personal exemption. Due to changes in law, you cannot claim personal exemptions or dependency exemptions.

Employees who have furnished a W-4 form prior to 2020 are not required to provide a new form due to the redesign. Employers should continue to compute withholding based on the information from the employee's most recent W-4 form.

Resources:

• 2020 W-4 Form and Instructions

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Reminder: The due date for filing employees’ W-2 forms, the Wage and Tax Statement, for calendar year 2019 is January 31, 2020. Also, any 1099-MISC forms reporting payments to contract workers (box 7, non-employee compensation) must also be filed by January 31, 2020. The deadline applies whether an employer e-files or files a paper W-2 form.

The Social Security Administration encourages all employers to e-file their W-2 forms by using the Business Services Online web page. E-filing can save time, effort, and can help ensure accuracy. Employers must e-file if they file 250 or more W-2 or W-2c forms. Employers who are required to e-file but fail to do so may incur a penalty.

The IRS projects that employers will file more than 250 million W-2 forms this year, with the vast majority being e-filed.

All tax professionals should take stock of security measures used to protect client data. Tax practitioners remain high-value targets of cybercriminals seeking to steal sensitive tax information so they can file fraudulent returns. Whether a one-person shop or partner in a large firm, everyone should take steps to protect their clients and their businesses.

To assist tax professionals in covering the basics of cyber security, the IRS, state tax agencies, and the tax industry partners who make up the Security Summit created a checklist.

The Taxes-Security-Together checklist includes:

• Utilize the “Security Six” measures
  • Activate anti-virus software
  • Use a firewall
  • Opt for two-factor authentication when it’s offered
  • Use backup software/services
  • Use drive encryption
  • Create and secure virtual private networks (VPN)
• Create a data security plan
  • Federal law requires all professional tax preparers create and maintain an information security plan for client data
  • This requirement is flexible enough to fit any size of tax preparation
  • Tax professionals are asked to focus on key areas such as employee management, training, information systems, and detecting and managing system failures.
• Educate yourself on phishing scams
  • Learn about spear phishing emails
  • Beware of ransomware
• Recognize the signs of client data theft
  • Clients receive IRS letters about suspicious tax returns in their name
  • More returns filed with your electronic filing identification number than you submitted
  • Clients receive tax transcripts they did not request
• Create a data theft recovery plan
  • Contact a local IRS stakeholder liaison immediately
  • Assist IRS in protecting clients
  • Contract with a cyber security expert to stop thefts

For more information on these checklist items and how to implement them, see Publication 4557, Safeguarding Taxpayer Data, and Publication 5293, Data Security Resource Guide for Tax Professionals.

Employer eReporting requires those using the system to establish a user account for each employee who needs access to the system. If you are out of the office and another employee assists you with submitting payrolls, they must contact the Division of Retirement and Benefits to obtain their own unique user ID and password. Your user name and password should always remain confidential to ensure the security of your payroll records.

In addition, when an employee no longer needs access to eReporting due to a promotion, transfer, or termination, a LogonID Request form needs to be submitted timely to delete their access. This form will be required for any new user, to delete a current user, and for any changes to a current user’s account. You can find the form on the Division’s website.

Reminder: your password will expire every 90 days. Please notify your Retirement and Benefits payroll contact if you need a password reset.

It is important for all employers to keep their agency contact information up to date. Accurate and current contact information lets the Division notify you of important information and changes. It also allows Division employees to exchange information with your staff. If your staff member is not on our contact list, they may miss out on important information.

Please ensure that the following contacts are up to date with correct name, email address, phone number, and address. Please note: The same individual may be used for more than one contact type.

• Payroll
• Administration
• Finance Director
• Personnel (if applicable)
• Superintendent (if applicable)
• Data Processing (if applicable)
• Mayor
• Any additional staff

Please contact your Retirement and Benefits active payroll contact to verify your agency’s contact information.

In recent years, because of budget constraints, the availability of Division Counselors to provide in-person benefit education has been significantly reduced, requiring the Division to find creative and innovative ways to provide educational opportunities for rural Alaska. We are currently implementing an on-demand video library providing information about the individual retirement plans and other benefits, offered in bite-size segments that can be accessed at any time.

Last year, the PERS Defined Contribution Retirement Plan seminar was produced in seven short video sections available on the Division’s YouTube page. You can view this seminar in its entirety or in smaller sections to suit your needs. This “small bite” format also allows you to access specific information without viewing the entire seminar, making this resource easy to use. This is only the beginning of an on-demand seminar library, with additional videos covering the PERS and TRS Defined Benefit plans, SBS-AP, and Deferred Compensation plans to be added soon.

In addition to our growing video library, we continue to offer in-person seminars and individual counseling appointments in Juneau and Anchorage, as well as round-table discussions, benefit education presentations, and counseling appointments via WebEx and by phone. This year, we will also conduct an outreach campaign to rural employers outside of Anchorage, Fairbanks, and Juneau. No need to wait until we reach out to you; please send your requests and suggestions to Roberto Aceveda at Roberto.Aceveda@alaska.gov.

Submitting Defined Contribution Plan Beneficiary
Designation Forms to Empower Retirement

Before submitting any beneficiary designation forms, employees must have an account established with Empower Retirement. Until then, any beneficiary designation forms sent to Empower will be rejected. Employees must wait until their first contributions have been received by Empower before setting up their beneficiary designations online. Hard Copy forms should not be submitted to Empower until 15 business days after the employee’s first pay period end date.

Ideally, employees should create an online account with Empower Retirement and fill out the beneficiary designation information. This is the most efficient process for completing the beneficiary designation, it reduces the chance of errors and the form being rejected. If employees have any questions about the online process, they can reach Empower at (800) 232-0859.

If the employee is unable to submit the beneficiary designation online, please fax or mail the completed form to Empower.

Remember, do not submit the beneficiary designation forms online or by mail until 15 business days after the employee’s first pay period end date.

Please note: A separate beneficiary designation form needs to be submitted for each plan that the employee is a member, regardless of whether they submit the form online or by mail.

Defined Benefit Beneficiary forms are still submitted to the Division of Retirement and Benefits.

If there are any questions, please do not hesitate to contact our office toll-free at (800) 821-2251 or e-mail us at doa.drb.activepayroll@alaska.gov.

IRS Pension Plan Limitations for 2020

The 2020 Pension Plan Limitations have been announced by the IRS with Notice 2019-59.

Pension Plan Limitations that specifically apply to the pension contributions submitted to the Division include:

401(a)(17) Compensation Limit
For 2020, the compensation limit is increasing to $285,000. The compensation limit is the maximum amount of compensation that employee contributions may be based on. This limitation applies to the PERS, TRS, JRS, and EPORS. Employer contributions are still due to the Division if an employee’s compensation exceeds the limit.

457 Deferred Compensation Limits
For 2020, the DCP contribution limit is increasing to $19,500. Participants are allowed to contribute an additional $6,500 in the year they turn age 50 or greater for an annual maximum of $26,000. This represents the annual allowable of $19,500, plus the additional $6,500. The catch-up maximum is $39,000. This represents double the annual maximum of $19,500.

SBS Limitation for 2020
The Social Security Administration has announced the 2020 base wage is increasing to $137,700. The SBS base wage mirrors the social security limits.

Resources:

Social Security Contribution Base

If you have any questions regarding the IRS Pension Limitations, especially if you have an employee who may meet or exceed the limitations, please connect with your Division payroll contact.

Reminder to Review True-up Records with Each Payroll Submission

The Division calculates DCR true-up adjustments daily and provides them in eReporting. The true-up adjustments correct for over and/or under-reporting of the following contributions:

• DCR Employer match (ER),
• DCR Occupational Death & Disability (ODD),
• DCR Retiree Medical Plan (RMP),
• DCR Health Reimbursement Arrangement (HRA), and
• Defined Benefits Unfunded Liability (DBUL).

Please review the true-up report with each payroll submission. All true-up records for each year listed need to be adjusted with each payroll submission even if it is a net zero adjustment. The true-up will allocate the contributions to the proper money type.

Please contact your Division payroll contact for if you have any questions regarding the true-up process or about specific true-up records in eReporting.