Tax and Payroll Legislation Updates for 2017

Let’s take a look at what we can anticipate in the next few months with potential new legislation.

Federal health reform — President Trump wants to replace the Affordable Care Act … what he’ll replace it with is anyone’s guess. What we know for now is that the ACA is here to stay for 2017 and possibly longer.

Forms 1094 and 1095 will most likely survive for at least this year, so make sure to keep tracking. The Cadillac tax will probably go away later this year, and it is possible that the employer mandate could go away this year, as well (not yet confirmed).

Tax reform — An early look at tax reform shows that this has a long way to go. Everyone is talking about it, but there are major differences in opinion, even within the Republican Party. Regardless, we’ve been down this road before, so don’t expect many changes in 2017. Something that could happen is a reduction in brackets and possibly a top bracket of 25%.

Fraud prevention — We’ve already accelerated W-2s (with January 31 employer deadlines for submission), and look for more fraud enhancements in filings and verifications. The IRS goal is to match identification and income to returns before processing refunds.

Dead legislation — The new EEO-1 reporting rule with wage classification and grouping was supposed to go into effect in 2017 — but as of now, this legislation is dead. The rule may be revived in the future, but it will likely start from scratch. Also, new exempt dollar thresholds were supposed to take effect on December 1, 2016. This is considered dead and probably won’t be revisited for some time.

Payroll cards — We already have new legislation in New York on a waiting period for new cards to activate. Look for federal consumer protection by October 1, 2017.

Minimum wages — President Trump would like to see the minimum wage increased slightly — but not to anywhere near the $15 level some of the public wants to see. Many states will continue to increase their respective minimum wages in 2017 and beyond (recently, 21 states increased their minimum wages for 2017).

Paid leave — The president would like some sort of mandatory paid leave at the federal level. Several states did not wait for federal and have already enacted legislation.

E-Verify — Although nothing is confirmed yet, the general understanding is that mandated E- Verify is right around the corner for all new hires.

Our Thomson Reuters Payroll Compliance team works hard to keep abreast of federal and state regulatory changes. As these potential changes develop and details come to light, we will provide software updates to Accounting CS Payroll Compliance to put your team in the best possible position to provide accurate payroll services. In addition, the team of payroll experts at myPay Solutions is watching these changes closely and is prepared to react as details emerge.


James Paille CPP is the Director of Operations for Thomson Reuters myPay Solutions. He has been an executive manager in the payroll service industry for more than 30 years, specializing in managing multi-location offices. Jim is President of the American Payroll Association as well as a member of the National Speakers Bureau and chair of the CPP Certification Review Panel. He holds a Bachelor of Science in Accounting from St. John Fisher College in Rochester, NY.