In The News

Three Percent Withholding on Government
Contractor Payments Repealed

On November 21, 2011, President Obama signed into law the Three Percent Withholding Repeal and Job Creation Act. Title I repeals Section 3402, which would have required information reporting and withholding at the rate of 3% on payments to vendors providing property or services to a government entity with $100 million or more of annual expenditures that were subject to its provisions.

Note: Section 3402 never took effect. It was enacted as part of the Tax Increase Prevention and Reconciliation Act of 2005. Withholding under the new provision was originally set to apply to payments made after December 31, 2010, but this date was pushed back twice, most recently to payments made after December 31, 2012. The legislation to repeal Section 3402 was approved unanimously by both the House and Senate.

Hiring Veterans

Title II of the withholding repeal offers an enhanced Work Opportunity Tax Credit for businesses that hire unemployed veterans after November 21, 2011. Under current law, businesses are allowed to claim a tax credit equal to a percentage of the wages paid to new hires from a list of targeted groups. The enhanced tax credit increases the qualified wages for purpose of the credit for disabled veterans; this increases the maximum credit an employer may receive. It extends the current tax credit for qualified veterans and disabled veterans through December 31, 2012 (for all other targeted groups, the credit expires at the end of 2011):

  • A “returning heroes” tax credit of up to $2,400 for hiring a post-September 11, 2001, veteran who has been unemployed at least four weeks, increasing to a maximum of $5,600 if the veteran has been out of work for at least six months during the one-year period ending on the hiring date.
  • A “wounded warriors” tax credit of up to $4,800 for hiring a veteran with a service-related disability who has been unemployed for at least four weeks, increasing to a maximum of $9,600 if the veteran has been out of work for at least six months during the one-year period ending on the hiring date.

In addition, the certification process is streamlined and simplified to make it easier for businesses to claim these tax credits.

Special Rule for Nonprofits

Work opportunity tax credits are taken as general business tax credits. The withholding repeal expands the credit, at a reduced percentage of qualified wages, to tax-exempt organizations. It allows such an employer to apply the credit against the employer’s Social Security tax liability for wages it pays to all its employees. The IRS will have to determine how tax-exempt employers seeking the credit will claim it.



IN THE NEWS

SAPLTF Announces Co-Chairs Humbarger and Parsons

The AAPA announced that the Strategic Accounts Payable Leadership Task Force (SAPLTF) will be co-chaired by two people long familiar to the organization, Jamie Humbarger APS, CPP, and Jodi Parsons, CPP. Both leaders ask for your participation. More››

Education Grant Helps AAPA Member Grow Her Career

Curious as to how an education grant might help grow your career? Hear firsthand from an AAPA member who was the recipient of the AP Education Grant this year, and how it encouraged her professional growth. Also, learn how you can earn your very own education grant. More››

Specifications Issued for Private Printing of Forms

In Rev. Proc. 2011-60 (2011-52 IRB 934), the IRS published updated requirements for preparing acceptable paper substitutes for Forms 1096, 1098, 1099, 5498, and certain other information returns More››

Three Percent Withholding on Government Contractor Payments Repealed

On November 21, 2011, President Obama signed into law the Three Percent Withholding Repeal and Job Creation Act. Title I repeals Section 3402, which would have required information reporting and withholding at the rate of 3% on payments to vendors providing property or services to a government entity with $100 million or more of annual expenditures that were subject to its provisions. More››

Payment Card and Third-Party Network Payments Backup Withholding Requirement Postponed

The IRS has postponed for one year the effective date for potential backup withholding on payments made in settlement of payment card and third-party network transactions (IRC §6050W payments). Specifically, the backup withholding requirements of IRC §3406 will apply only to §6050W payments made after December 31, 2012. More››

New Accounts Payable Classes Coming to the 30th Annual Congress

Congress will be held May 6 - 10, 2012 at the Gaylord Palms Resort & Convention Center in Orlando, Fla. Register now to receive registration discounts before they expire. The Congress Housing Bureau is also accepting reservations that make it easy to book accommodations at a specially discounted room rate. More››

FAQs on New Reporting Requirement for Payment Card Transactions

The IRS has issued related guidance in the form of frequently asked questions on the new information-reporting requirement for payment card transactions, IRC §6050W. We have edited the original slightly for our readers. More››

Take the Next Step In Your AP Career as an SAPLTF Member

If there’s one thing AP people know inside out, it’s cash. When there is an offer to “cash-in,” we stop everything and examine the opportunity with care. Here’s one that meets all levels of approval—an invitation to join the Strategic Accounts Payable Leadership Task Force (SAPLTF). More››

AP Book Guides You to a Successful AP Department

Published in conjunction with the American Accounts Payable Association (AAPA), Aspen Publishers’ AAPA Guide to Accounts Payable is your one-stop shop for everything you need to know about how to run a successful AP department. More››

Free Job Board Newsletter

In job search mode or just want to keep up to date on the latest opportunities? Sign up for the free Job Board News* brought to you in partnership with jobing.com. Visit AAPA’s Job Board page for more information.

* Please note that this is a separate opt-in email list from the American Accounts Payable Association.

AP Webinars Congress AP Guide