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[Webinar] What’s New from Florida? Tax Insights from ADP

2013-06-27 14:00:00

 

In this webinar, Norma Orozco, Government Relations Analyst at ADP, shares interesting facts and an overview of the Florida taxing authority, specific challenges for employers who work with the Florida agency may face, and specific things that all employers in Florida should know.

orozcoNorma Orozco
Government Relations Analyst at ADP 
Norma is responsible for ADP’s compliance and relationships with Florida tax agencies. She has been with ADP for over 12 years, with experience in wage garnishment processing services and also with tax filing to government agencies.

Kira Lakin:
Hello and welcome to this webinar on tax insights for Florida. My name is Kira Lakin, ADP Marketing and PR Director. Thank you for viewing this presentation. We here at ADP are happy to bring you this latest addition in our compliance insights series of webinars. Please note that this particular webinar is not eligible for CPE or RCH credit. We do welcome and appreciate your feedback. Please feel free to contact us with any suggestions you may have.

Now our speaker, Norma Orozco.

Norma Orozco:
Hello, everyone. My name is Norma Orozco, Government Relations Analyst responsible for ADP’s compliance and relationship with the Florida agency. I’ve been with ADP for over 12 years with experience in wage garnishment processing services and also with tax filing to government agencies. I hope you enjoy the presentation. We encourage your feedback for future webinars.

This webinar will cover a high level overview which will include some interesting facts about the Florida taxing authority. I will also cover challenges employers may face with the Florida agency, will guide you through what Florida would like all of their tax payers to know, and also some recent accomplishments. And finally we will have a few minutes for questions and answers.

Florida Department of Revenue reemployment tax was previously called unemployment insurance. This department collects unemployment insurance contributions. In Florida legislation passed in 2012 changing the name of Florida’s unemployment compensation law to be reemployment assistance program law. The intent was to direct the focus of the program to helping those looking for employment become reemployed. Reemployment benefits provide temporary income payments to make a part of the wages lost to individuals who lose their jobs through no fault of their own and who are able and available for work. It really is job insurance paid through a tax on employer’s calculated on employee wages. While every state has an unemployment compensation program, not all have an income tax that must be withheld from employees. Florida happens to be one of those few states who does not have income tax.

Every new business is required to report its initial employment in the month following the calendar quarter in which employment begins. However, before submitting a quarterly report, employers must first register. To do this, an employer needs to submit a Florida business tax application on form DSR-1. Of course the quickest method is to submit the application online as the seven digit account number will be issued to the employer within three to five days.

If online is not an option there is the option to mail the application but as you might imagine this significantly delays the turnaround. It can be up to four to six weeks before the employer’s account number is issued. Mailing is a longer process since the processing isn’t automated and turnaround will depend on the agency’s workload at that time. Once again, online submission is recommended.

Florida offers electronic filing options that are safe, convenient, and free. However, Florida has an additional step that must be completed in order to file electronically. After the employers register, the employer will also need to submit form DR-600, known as the enrollment and authorization for services. Again, this is an enrollment process and it is a requirement for Florida, unique to Florida. It takes approximately three to five business days to complete the enrollment process. So, tax payers should not wait until the due date to attempt to enroll and to file electronically.

I can’t emphasize how critical this piece is, but enrolling is required and this will prevent the filing from being rejected. Fortunately, ADP is set up to electronically send a file to Florida to enroll our clients. I’m proud to say that ADP is currently enrolled as a submitter of electronic reports for 55,245 Florida tax payers. Wow. This is a big client base.

Form RT6 is the employer’s quarterly report. An important detail to note is that even through an employer may not need to pay for a particular quarter because there were no employees or all wages were in excess of the taxable wage base for all employees, the filing of this form RT6 is still required. The due dates for the quarterly report are the standard due dates for quarterly filing, the end of the month for the prior quarter, for example, April 30 or July 31. Another important item is that beginning January 1, 2012, the taxable wage base increased in Florida to the first $8,000 in wages paid to each employee during a calendar year.

Let’s discuss how to make adjustments or amend your report. Once quarterly reports have been filed with Florida you can make adjustments or amendments to the figures reported by completing a correction to employer’s quarterly report or form RT-8a. Tricky form name, right? The amendment must state the reasons for such an adjustments. For example if there were incorrect wages or the employee’s wages should’ve been reported to another state.

Electronic filing was a large initiative for Florida several years ago and continues to be with this agency. There are specific mandates and penalties related to electronic filing and payments. Any employer who paid reemployment tax for ten or more employees during any calendar quarter of the prior fiscal year must file reports and pay taxes by electronic means. A third-party administrator such as ADP is required to electronically file every 100 or more employees. If an employer submits a filing on paper but really was mandated to file electronically they could be assessed a penalty for failing to file electronically which is $50 for the filing plus an additional $1 for each employee reported on that paper filing. If an employer makes a check payment but met the criteria for electronic payment, they could be assessed a penalty for failing to pay electronically which is $50 for the submission. Unique to Florida is the fact that third-party administrators can also get this same penalty if they report on paper and exceed 100 employees.

There are times when an employer may inadvertently overpay his account. Fortunately Florida is one of the very few states that automatically generates a refund to the employer. This is very rare especially during the recent economic downturn when states need to increase their revenues and are very cautious before refunding or crediting tax payments. This is a very tax payer friendly stance, I believe. No action is needed to initiate this process. The actual refund process can take between 60 to 90 days. And some tax payers may consider this to be too long of a period. There is another option. They can expedite the refund and all they need to do is call 850-617-8585 to expedite the process.

ADP was privileged to work out a process with Florida to exchange a weekly file of all our unregistered clients with the agency. The agency is committed to providing to ADP a valid account number is an employer has properly completed the registration process. The registration file is returned by Florida in about one to two days back to ADP. ADP has also worked closely with Florida for many years to exchange a validation file of our client’s rates and account numbers. This robust validation process is performed for all of our clients and it’s conducted twice a quarter to ensure that our quarterly filings are going to be as clean and accurate as possible before the due date. So, we do this process before the due date. Florida returns rate and account information which does not include notification of clients who have fallen into inactive status at the agency due to no activity. It also includes account number corrections if account numbers have changed since we last filed for our clients.

Now what does Florida want our employers to know? A few things Florida would like to share with their employers include that in 2012 Florida had a federal interest assessment program in order to collect payments from employers in their state to pay for interest on the state’s outstanding federal loans. There is great news this year. There will be no special interest assessment program for 2013 as there is no interest due to the federal government.

Another item is that legislation passed in 2012 to allow employee leasing companies to be able to elect to report and pay tax due effective 2013 using the tax rate and account of each leasing Company client. Employer leasing companies perform administrative function for other companies including items such as human resources and other administrative functions. ADP’s system has updated to accommodate this unique client type and their specific reporting requirements.

And another reminder is that employers must be enrolled in order to file their quarterly report. This requirement is specific to Florida and a handful of other state agencies. So, as an employer that’s not enrolled in the electronic filing, it’s going to reject. Of course we don’t want this to happen as the filing will then be viewed as late, costing penalties and fees. Even though ADP submits the enrollment on behalf of their clients, the enrollment still has a possibility of rejecting if certain criteria provided to ADP about the employer’s account doesn’t match what is on record at Florida.

For example, if the federal employer identification number that ADP has on the enrollment file doesn’t match against the agency’s record, this will cause a rejection with the enrollment piece. It’s important to note that if an employer changes their federal identification number with the IRS, due to a change in ownership or restructure, you must notify the Florida agency and ADP so that all records are in sync and then therefore reducing the chances of an enrollment rejection and ultimately the filing itself rejecting.

At this time there are some opportunities and one of them is that amended reports are filed to Florida through paper. Amended returns can be a labor intensive process for the agency as it becomes a manual process to rekey all employers that have changes to wages or social security numbers, et cetera. Some of the list of changes can be quite large. At this time Florida is looking into electronic filing specifications to allow amended reports to be sent electronically which would be a great process improvement at the agency and may help employers reduce penalties resulting from amendments to increase taxes as the late tax dollars will be posted faster if it’s sent electronically. It also further expedites refunds as the agency will have this ability of credit to the employer’s account.

At this time ADP is staying in close contact and partnership with Florida to see through this objective of sending amendments electronically. Another area of opportunity is with the actual enrollment process we’ve been discussing. If an employer is not enrolled before the filing due date, the filing will be rejected and the filing is often submitted late as a result. ADP continues to work with the agency on solutions for clients who are in the process of enrolling or who have experience with enrollment rejects to find other solutions and therefore avoid late filing.

As far as accomplishments, ADP has created a systemic process to enroll our client base as mentioned before. This means the paper form DR-600 does not have to be completed by ADP clients. This saves a lot of manual process for our clients. Only in rare instances when the enrollment fails for a client would it be necessary for the client to complete the paper form.

Another area of accomplishment is with the power of attorney, Florida’s form DR-835. This form is typically necessary in order for an employer’s agent or representative to receive confidential information. One of ADP’s accomplishments with Florida is that we have established a document known as memorandum of understanding with Florida which means that Florida views ADP as a trusted partner and can speak with ADP about our client’s accounts without requiring their power of attorney form DR-835. And so again this is time saving and reduces the amount of paperwork needed from our clients.

Kira Lakin: Thank you so much, Norma. This has been really helpful. I’d like to go through some of the most frequently asked questions that we get when it comes to Florida. Does that sound good?

Norma Orozco:
Of course, Kira.

Kira Lakin:
First question, how does an employer register?

Norma Orozco:
An employer needs to submit a Florida business tax application known as form DR-1 and may do so online at DOR.MyFlorida.com/DOR/TaxesRegistration.

Kira Lakin:
Great. After the employer registers, they then need to do an additional step. This is to enroll. What is the form name for that?

Norma Orozco:
This is a great question, Kira. Yes. Florida requires this second additional step which is for the employer to enroll. They can do so by submitting form DR-600. Once again, this step is critical because the quarterly filing will reject otherwise.

Kira Lakin:
Lastly, if an employer does not have to pay tax for a particular quarter because there are no employees or all wages were in excess of the taxable wage base for all employees, is the employer required to filed form RT6, employer’s quarterly report?

Norma Orozco:
Yes, absolutely. Florida still requires that the employer submit this form, RT6, known as the employer’s quarterly report.

Kira Lakin:
Thank you. For additional information on any of the ADP products or services referenced during today’s webinar, please call 855-ADP or CFO or visit ADP.com. And additional free resource our participants may find helpful is the ADP compliance insights blog where tax compliance and financial professionals discuss legislative and other factors that could effect their business. To read and subscribe to the ADP compliance insights blog, please visit. www.ADPComplianceInsights.com. And as always, please let us known how we’re doing. This wraps it up for the webinar on tax insights for Florida. Thank you, Norma. Thank you to everyone for participating.

Norma Orozco:
Thank you, Kira and everyone.

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