AudioDigest*

Federal tax regulations affecting state employment tax filings: What companies need to know

Final federal employment tax regulations were adopted in August of 2007 and are effective January 1, 2009. These regulations eliminate provisions allowing a disregarded entity to report employment tax obligations with respect to its employees, as though such employees are employed directly by the entity’s owner.

As a result, disregarded entities that have conformed their state employment tax filings to their federal employment filings and reported their state employment tax obligations at the owner level, will be required to register separately as an employer with the states in which they meet the standards for common law employer for the individuals at issue.

Speakers Walter Paul, partner and national leader of the PwC employment tax practice and Terry Phillips, a partner and leader of the East Coast employment tax practice provide an overview of the federal legislation, discuss the impact on state obligations, and highlight steps companies should take to ensure compliance with the regulations.

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