As of midnight on Friday, December 21, many parts of the federal government have shut down.
Though critical services for “life or property” such as the postal service and air traffic control remain intact, several federal government agencies and their employees are furloughed during this period. Here’s how the absence of these services could affect you, as well as areas where you can turn to Nextep for assistance.
New tax tables
The IRS has already released updated federal tax tables for 2019, so paychecks will reflect the correct updated withholding amounts with no delay on January 1, 2019. We encourage employees to review their paystubs and log in to make any needed changes to their tax withholding statuses. Here’s how.
Since the US Postal Service runs on its own revenue stream, mail delivery will continue uninterrupted. There will be no change or delay in payments made by Nextep to employees, vendors, benefit carriers, or other parties to whom Nextep makes payments for our clients.
Company tax filing
Automated processes will continue, but the Internal Revenue Service (IRS) is largely unmanned during the shutdown. Timely tax reports and payments are still due, though. Nextep will continue our regular schedule of reporting and remitting all payroll and other applicable taxes on behalf of our clients.
Depending on how long the shutdown lasts, the IRS may delay the opening of tax filing season, during which employees can file for individual tax refunds using their W-2 forms. Here’s what could potentially happen.
When the government previously shut down in October 2013, the IRS pushed back the 2014 tax season by 10 days. Since the timing of this shutdown comes significantly closer to tax season, the implications may differ from last time.
Based on the IRS contingency plan, it appears that taxpayers will still be able to electronically file their taxes and remit any applicable payments, but may not receive refunds until the shutdown has ended and the IRS has worked through its backlog. Bottom line: until we hear otherwise, expect to file your taxes and payments on time, but depending on the length of the shutdown, don’t expect to get a timely refund.
Nextep will still distribute all 2018 W-2s to employees no later than January 31. For answers to your frequent W-2 questions, visit our W-2 FAQ.
Though the furloughed government employees may be home from work, their benefits should continue uninterrupted. The shutdown isn’t expected to create a federally-approved qualifying event that allows furloughed workers to join a spouse or parent’s benefit plan, but there may be exceptions. Contact Nextep’s benefits team for case-by-case assistance.
The Department of Labor (DOL) has already been funded through September 2019 and remains unaffected by the government shutdown. Regardless of a shutdown, companies must always comply with labor laws, including overtime pay, worksite safety, and Title VII. Nextep’s HR team is available to help with any guidance or issues.
Most unemployment proceedings are operated by state governments, which are still currently operational. Therefore, unemployment claims, responses, and hearings will continue as usual. Nextep’s HR department will continue to handle unemployment claims and recommend best practices to safeguard your company.
E-Verify, used for employee eligibility verification, is closed during the government shutdown.
Employers must still comply with existing requirements for correctly completing the I-9 form within three days of a new employee’s first day.
While disaster preparedness programs are suspended, disaster response is still operational under the Federal Emergency Management Agency (FEMA). Any individuals or businesses impacted by catastrophic events will receive FEMA assistance. Current relief efforts for those recovering from recent wildfires will continue. Nextep encourages company leaders to review your disaster preparedness plan.
Nextep will continue to closely monitor the situation and keep clients informed. For additional questions, please contact Nextep.