Mid-Year Withholding Tax Changes

New income tax withholding formulas go into effect today in Arizona and the city of Philadelphia.

Arizona has changed the method it uses to calculate the withheld income tax. Arizona employers are advised the have their household employee complete a new A-4 form and make the appropriate changes to withholding. The HomeWork Solutions' Nanny Tax Calculator is updated with the new tax rates. Clients are advised to log into their accounts, calculate the new paycheck withholding, and report the payroll profile change to the office via the online interface.

The City of Philadelphia resident wage tax has a new rate of 3.928% (.03928). The non-resident wage tax is now 3.4985% (.034985).

The Department of Labor has stepped up wage and hour enforcement in 2010, as well as prosecuting misclassification of employees as independent contractors. Protect yourself against claims by disgruntled household employees - nannies, housekeepers and maids. Learn more about the "nanny tax" and the employer's legal and financial obligations! Download HomeWork Solutions' free e-Book, the Nanny Payroll Tax Quick Start Guide.