February 2013
At Issue, By Melanie Willoughby, Senior Vice President

Tax and Rule Changes Greet Business in 2013

The beginning of every year holds changes for business. New rules, requirements, challenges and opportunities come with every new year, and 2013 is no exception. New Jersey employers will need to prepare for federal health insurance reform, new posting requirements and changes in the tax code, both good and bad.

One of the biggest issues NJBIA will follow in 2013 is the continued phase-in of state tax reforms enacted in 2011. So far, New Jersey businesses have saved $347 million in taxes. Another $195 million in tax reductions are scheduled to take effect on July 1. Reforms like single sales factor, net-loss carry-forward for small business and consolidating business income tax categories are being phased in over several years. Additionally, the TEFA (the Transitional Energy Facilities Assessment) tax on energy usage is scheduled to be eliminated this year. One of NJBIA’s biggest goals is to make sure that these scheduled tax cuts are not taken away during the budget process.

On the federal level, however, the news on taxes is not so good. New taxes to pay for federal healthcare reform will take effect in 2013, as well as tax increases included in the so-called “fiscal cliff” legislation.

The temporary 2 percent tax cut in payroll taxes expired on the first of the year, so all employees saw their Social Security tax rise from 4.2 to 6.2 percent. Medicare taxes increased 0.9 percent for individuals making more than $200,000 or married couples making more than $250,000 a year. The increase is to help pay for the federal healthcare reform law.

Speaking of the federal healthcare law, it includes a 3.8 percent surtax on capital gains for households making more than $200,000 if single or $250,000 if married. Together with the capital gains tax increase in the fiscal cliff legislation, taxpayers in the higher brackets could pay 23.8 percent on capital gains.

Other healthcare-related tax changes for 2013 include a new 2.3 percent excise tax on gross sales of medical devices. And those who use Flexible Spending Accounts (FSA) for medical expenses have had their contributions limited in 2013. FSA contributions are now capped at $2,500. Previously, federal law did not limit contributions, but employers could cap them.

Back in New Jersey, there will be a new posting requirement in 2013. A new law requires employers with 50 or more employees to post a notice informing workers of their rights to equitable pay and the prohibition against gender discrimination under various laws. Affected employers must provide the notice when an employee is hired and on a yearly basis thereafter.

The posters were not available at press time, and employers will not be responsible for posting the notice until 30 days after it’s made available by the state. For updates, visit the NJ Department of Labor’s website at http://lwd.dol.state.nj.us/ and click on the “Required Employer Posters” button at the very bottom, left-hand side of the home page.

One of the biggest challenges New Jersey businesses face is keeping up with all of the changing laws and regulations. At NJBIA, our Government Affairs team spends a great deal of time tracking changes in laws that will affect employers and providing information to our members on making sure they are in compliance.

Members of NJBIA can also use our Fast Facts compliance briefs on topics like using independent contractors, New Jersey’s family and medical leaves laws, and changes to overtime rules. Visit our website at www.njbia.org/BusinessResources.aspx and click on the Fast Facts link.

At NJBIA, we understand that you are busy developing your business and taking care of your customers. On top of that, you have to comply with a growing list of laws and regulations. Hopefully, we can make that part of your job a little easier. 

Vincent Schweikert, Vice President & Publisher
973-882-5004. ext. 110
v.schweikert@njbmagazine.com

Anthony Birritteri, Editor-in-Chief
973-882-5004. ext. 104
a.birritteri@njbmagazine.com

George Saliba, Managing Editor
973-882-5004. ext. 106
g.saliba@njbmagazine.com

Lisa Criscuolo, Advertising Director
973-882-5004. ext. 108
l.criscuolo@njbmagazine.com

Gloria Owens, Account Executive
973-882-5004. ext. 109
g.owens@njbmagazine.com

Doug Prefach, Account Executive
973-882-5004. ext. 102
d.prefach@njbmagazine.com