“American Recovery and Reinvestment Act of 2009” is Law—Part 1
The American Recovery and Reinvestment Act of 2009 (also known as HR 1) is now the law. It is almost 1100 pages long and filled with provisions that spend money for almost any topic you can imagine. Its creators intend it to stimulate the economy, but many believe some “pet projects” were also slipped in along the way.
The question is: Do you know how HR 1 affects you and your business?
As the details of this humongous new law surface over the next few weeks, I will share provisions that apply to employers, employees, independent contractors, taxes, labor law, and related topics.
Tax Enforcement for IC Compliance and Labor Laws
HR 1 funds $80,000,000, for “the enforcement of worker protection laws and regulations, oversight, and coordination activities related to the infrastructure and unemployment insurance investments in this Act.”
Actually, this is not much money in the whole scheme of things, but it does show they haven’t forgotten about the auditors. This money is above and beyond all current funding for enforcement focused on boosting the failing balances in the unemployment fund alone. The IRS and states will use some of this money to increase their enforcement of IC compliance and to pull in more revenue by finding misclassified workers.
Some of the money can be transferred to “Employment and Standards Administration, Occupational Safety and Health Administration, and Employment and Training Administration–Program Administration for enforcement, oversight, and coordination activities.”
All money is meant to be spent this year.
Related Topic-Unemployment benefits increased and not taxed.
Individuals will be able to exempt the first $2,400 of their 2009 unemployment benefits from federal income taxes.
Also unemployment benefit checks will increase by $25 per week. Also the extended benefits program will continue through December 31, 2009. At present unemployed individuals may draw benefits for up to 33 weeks including the extended benefits. The additional cost in the bill: $27 billion.
Why should you care? Because under the UI Experience Rating System, generally when your ex-employees draw benefits they are “Charged” to your “Experience Rating Account” which in turn increases your UI Tax Rate.
Leave a Reply