NYS Unemployment Insurance Payments vis Form NYS-45

[Victor Roberts]

I own a single employee C Corp registered in New York. I pay my NYS UE
premiums on NYS-45, filed quarterly. The NYS UE Wage base for 2022 is
$12,000.

In a normal year I pay myself more than the UE Wage Base by the end of
the first or second quarter, so my UE deposits, which are paid via the
quarterly Form NYS-45, are paid well before the end of the 4th
quarter.

This year was very strange, with little work in the 1st and 2nd
quarters, but a lot in the 3rd and 4th. As such, I have a UE payment
due for the 4th quarter that normally would not be paid until I file
my 4th quarter Form NYS-45 in January.

However, I would like to get that obligation paid and off my books
before December 31 so I don't have to pay Federal Income Tax on the
amount.

So, is there any other way to make the NYS UE payment other than via
the Form NYS-45?

Or, can I file my 4th Quarter NYS-45 before December 31? For example,
if I run my final 2022 payroll on December 28, can I file the NYS-45
that same day?

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[Victor Roberts]

On Mon, 16 Jan 2023 06:45:03 +0000, Smart Bean
<30510bcc6de0d66d...@example.com> wrote:

>You have a couple of options to consider when it comes to paying your New York State unemployment insurance (UI) payments and getting them off your books before December 31st.
>
>File Form NYS-45 early: If you run your final 2022 payroll on December 28th and file the NYS-45 for the 4th quarter on the same day, you will be able to pay the UI premium for the 4th quarter before December 31st, and the obligation will be off your books. However, you will need to make sure that you have all the necessary information and calculations for the quarter before you file the form.
>
>Make an estimated payment: If you are unable to file the 4th quarter Form NYS-45 before December 31st, you can make an estimated UI payment for the 4th quarter. This will allow you to pay the UI premium before December 31st and get the obligation off your books. Keep in mind that you will need to file the 4th quarter Form NYS-45 and reconcile the estimated payment with the actual amount due when you file the form.
>
>File 4th quarter Form NYS-45 online: To make your payments as soon as possible you can file your form online and pay the UI premium via electronic funds transfer (EFT). The online filing process is faster and more efficient than paper filing.
>
>It's important to note that these options are based on general information and you should consult with a tax professional or the New York State Department of Labor for specific guidance on your situation.


I know my response is very late, but I did talk to the NYS DOL and was
told I could not e-file my Q4 NYS-45 before December 31. (I believe I
am required to E-file, so a paper form and check was not an option.)

I owed only a small amount for 2022 and I kept that amount on my books
for payment in early January. I guess I could have tried to e-file on
December 28, but by then it just wasn't worth the effort anymore.

Vic Roberts

[Adam H. Kerman]

Victor Roberts <vicro...@earthlink.net> wrote:

>Mon, 16 Jan 2023 06:45:03 +0000, Smart Bean wrote:

>>You have a couple of options to consider when it comes to paying your New York State unemployment insurance (UI) payments and getting them off your books before December 31st.

>>File Form NYS-45 early: If you run your final 2022 payroll on December 28th and file the NYS-45 for the 4th quarter on the same day, you will be able to pay the UI premium for the 4th quarter before December 31st, and the obligation will be off your books. However, you will need to make sure that you have all the necessary information and calculations for the quarter before you file the form.

>>Make an estimated payment: If you are unable to file the 4th quarter Form NYS-45 before December 31st, you can make an estimated UI payment for the 4th quarter. This will allow you to pay the UI premium before December 31st and get the obligation off your books. Keep in mind that you will need to file the 4th quarter Form NYS-45 and reconcile the estimated payment with the actual amount due when you file the form.

>>File 4th quarter Form NYS-45 online: To make your payments as soon as possible you can file your form online and pay the UI premium via electronic funds transfer (EFT). The online filing process is faster and more efficient than paper filing.

>>It's important to note that these options are based on general information and you should consult with a tax professional or the New York State Department of Labor for specific guidance on your situation.

>I know my response is very late, but I did talk to the NYS DOL and was
>told I could not e-file my Q4 NYS-45 before December 31. (I believe I
>am required to E-file, so a paper form and check was not an option.)

>I owed only a small amount for 2022 and I kept that amount on my books
>for payment in early January. I guess I could have tried to e-file on
>December 28, but by then it just wasn't worth the effort anymore.

You owed the state unemployment taxes for fourth quarter. You MUST have
cash set aside to pay it when due. It's a liability as soon as you incur
the obligation to pay it.

Your asset balance at the end of the quarter is the same, whether the
taxes are paid at the end of the quarter or the beginning of the
following quarter.

[Victor Roberts]

On Fri, 10 Feb 2023 14:15:32 EST, "Adam H. Kerman" <a...@chinet.com>
wrote:

>Victor Roberts <vicro...@earthlink.net> wrote:
>>Mon, 16 Jan 2023 06:45:03 +0000, Smart Bean wrote:
>
>>>You have a couple of options to consider when it comes to paying your New York State unemployment insurance (UI) payments and getting them off your books before December 31st.
>
>>>File Form NYS-45 early: If you run your final 2022 payroll on December 28th and file the NYS-45 for the 4th quarter on the same day, you will be able to pay the UI premium for the 4th quarter before December 31st, and the obligation will be off your books. However, you will need to make sure that you have all the necessary information and calculations for the quarter before you file the form.
>
>>>Make an estimated payment: If you are unable to file the 4th quarter Form NYS-45 before December 31st, you can make an estimated UI payment for the 4th quarter. This will allow you to pay the UI premium before December 31st and get the obligation off your books. Keep in mind that you will need to file the 4th quarter Form NYS-45 and reconcile the estimated payment with the actual amount due when you file the form.
>
>>>File 4th quarter Form NYS-45 online: To make your payments as soon as possible you can file your form online and pay the UI premium via electronic funds transfer (EFT). The online filing process is faster and more efficient than paper filing.
>
>>>It's important to note that these options are based on general information and you should consult with a tax professional or the New York State Department of Labor for specific guidance on your situation.
>
>>I know my response is very late, but I did talk to the NYS DOL and was
>>told I could not e-file my Q4 NYS-45 before December 31. (I believe I
>>am required to E-file, so a paper form and check was not an option.)
>
>>I owed only a small amount for 2022 and I kept that amount on my books
>>for payment in early January. I guess I could have tried to e-file on
>>December 28, but by then it just wasn't worth the effort anymore.
>
>You owed the state unemployment taxes for fourth quarter. You MUST have
>cash set aside to pay it when due. It's a liability as soon as you incur
>the obligation to pay it.
>
>Your asset balance at the end of the quarter is the same, whether the
>taxes are paid at the end of the quarter or the beginning of the
>following quarter.

My very small company is a Cash Basis taxpayer. According to my
accountant, any funds I have taken in during the year that I have not
actually paid out are subject to both state and federal income tax.
That is also my understanding from reading various IRS publications.

[Stuart O. Bronstein]

Victor Roberts <vicro...@earthlink.net> wrote:

> My very small company is a Cash Basis taxpayer. According to my
> accountant, any funds I have taken in during the year that I have not
> actually paid out are subject to both state and federal income tax.
> That is also my understanding from reading various IRS publications.

It's a lot more complicated than that, but that's its essence.

But what's your point? Unemployment insurance is just another business
expense like many others.

--
Stu
http://DownToEarthLawyer.com


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[Adam H. Kerman]

This has nothing to do with cash versus accrual.

Let's say you have three payrolls during the quarter. With each payroll,
you incur liability for various taxes: federal and state income taxes
withheld and Social Security taxes (FICA, HI, federal and state
unemployment). When you pay the tax isn't relevant. You've incurred the
liability immediately. Your asset balance has changed with the payroll.

Think about your checking account. You know that there's float between
the time you've written a check and the time it's presented at your bank
and funds are cleared. In your check register, the moment you've written
the check, you've reduced the asset balance. The checking account
balance on the bank's ledger is different than what you show in your own
register. This doesn't matter for the purpose of maintaining your own
books. The aggregate value of outstanding checks during the float period
isn't your asset.

Draw your TEE. The payroll tax liability increases with CR; the payroll tax
expense with DR. You're in balance.

You MUST NOT conflate liabilities with expenses.

I'm sorry but you have to change your thinking in this matter, otherwise
you are going to get into serious trouble from not depositing payroll
taxes when due. You issue a payroll which creates the payroll tax
liability. You've simultaneously incurred the expense for payroll taxes
regardless of the fact that they haven't yet come due.

Treat the period during which you have the payroll tax liability like
float.

[Adam H. Kerman]

Stuart O. Bronstein <spam...@lexregia.com> wrote:
>Victor Roberts <vicro...@earthlink.net> wrote:

>>My very small company is a Cash Basis taxpayer. According to my
>>accountant, any funds I have taken in during the year that I have not
>>actually paid out are subject to both state and federal income tax.
>>That is also my understanding from reading various IRS publications.

>It's a lot more complicated than that, but that's its essence.

>But what's your point? Unemployment insurance is just another business
>expense like many others.

He wants to know when he's incurred the expense.

With each payroll, the employer incurs both an expense and a liability
for payroll taxes regardless of cash versus accrual basis. On the date
of payroll issuance, the expense is debited and the liability is
credited.

The expense is taken as of the date of issuance of payroll. There is no
expense incurred on the date the payroll tax is deposited.

On the date the payroll tax is deposited, the liability is debited and
the cash account is credited. Asset balance has not changed.

[Victor Roberts]

On Sat, 11 Feb 2023 12:52:50 EST, "Stuart O. Bronstein"
<spam...@lexregia.com> wrote:

>Victor Roberts <vicro...@earthlink.net> wrote:
>
>> My very small company is a Cash Basis taxpayer. According to my
>> accountant, any funds I have taken in during the year that I have not
>> actually paid out are subject to both state and federal income tax.
>> That is also my understanding from reading various IRS publications.
>
>It's a lot more complicated than that, but that's its essence.
>
>But what's your point? Unemployment insurance is just another business
>expense like many others.
>
>--

Stuart,

Thank you for your reply.

My question was how to get this liability off my books before year end
since I waited until Q4 to run my first 2022 payroll for my tiny C
corp.

Other posters claim the UE insurance is already obligated and
therefore off my books, but QB doesn't see it that way, which may be
the only issue.

My Form 1120 is prepared by my accountant and he has to make one or
two other adjustments to the profit calculated by QB, which apparently
does not fully understand cash basis taxpayers. He had suggested I pay
the liability before year end, but I think that was to just avoid one
more QB adjustment.

[Adam H. Kerman]

Victor Roberts <vicro...@earthlink.net> wrote:
>Sat, 11 Feb 2023 12:52:50 EST, "Stuart O. Bronstein" <spam...@lexregia.com>:

>>Victor Roberts <vicro...@earthlink.net> wrote:

>>>My very small company is a Cash Basis taxpayer. According to my
>>>accountant, any funds I have taken in during the year that I have not
>>>actually paid out are subject to both state and federal income tax.
>>>That is also my understanding from reading various IRS publications.

>>It's a lot more complicated than that, but that's its essence.

>>But what's your point? Unemployment insurance is just another business
>>expense like many others.

>My question was how to get this liability off my books before year end
>since I waited until Q4 to run my first 2022 payroll for my tiny C
>corp.

You can't. You've told us the tax cannot be paid until early the
following quarter. The liability remains until the tax is paid,
obviously.

You won't understand how payroll works until you convince yourself that
upon payroll issuance you incur BOTH an expense AND a liability for
payroll taxes.

>Other posters claim the UE insurance is already obligated and
>therefore off my books, but QB doesn't see it that way, which may be
>the only issue.

You're using QuickBooks? There's a built-in payroll feature. Just set up
your accounts, one for the payroll expense (which includes the payroll
tax) and another for the payroll liability. You don't even need to
subscribe to their payroll service. All that does is maintain tax rates
for you, but you can look them up. The important this is that issuing a
payroll check through the payroll feature automatically puts the payroll
expense (including payroll taxes and withholding) into the expense
account you set up and the liability for payroll taxes into the
liability account you set up. You issue the check for payroll taxes
through this feature as well and it will reverse the liability.

Your payroll expense includes wages and salaries and taxes associated
with payroll.

>My Form 1120 is prepared by my accountant and he has to make one or
>two other adjustments to the profit calculated by QB, which apparently
>does not fully understand cash basis taxpayers. He had suggested I pay
>the liability before year end, but I think that was to just avoid one
>more QB adjustment.

There's nothing to adjust for the 1120 in this regard. It doesn't change
your profit and loss statement. Assets and liabilities are on the balance
sheet. It doesn't change your net assets either at year end and at the
time you pay the payroll tax.

As far as how QuickBooks "understands" cash basis, yes, QuickBooks does
all its reporting on an accrual basis by default. Under settings to
customize the report, you can change the calculation to cash basis.

For the 2734th time, this is not an issue of cash basis versus accrual
basis. There is ALWAYS both a liability and an expense associated with
incurring payroll taxes.

The difference between cash and accrual with regard to payroll is that
cash basis, you incur your payroll expense and tax liability upon issuing
the payroll. Accrual basis, you accrue payroll expense and tax liability
on each day of the payroll period. But the concept that the liability for
unpaid taxes is incurred together with incurring the payroll expense and
doesn't get reversed till the tax is paid is the same for cash versus
accrual.