Name: jeff kuzmich - Migrate_CPE_2026_Top_Regs_01202026_5161096
Uploaded: 2026-02-26T05:53:37.958Z
Duration: 1 h 3 min 44 s
Description: jeff kuzmich - Migrate_CPE_2026_Top_Regs_01202026_5161096

Transcript for "jeff kuzmich - Migrate_CPE_2026_Top_Regs_01202026_5161096": Hello and welcome to today's CPE webinar. Today's audio is through your computer webinar. Today's To download and print today's content and to access additional resources refer to the files and resources window. If you have questions during today's webinar use the ask us a questions window. Please note we may not be able to address each question individually however all questions are valuable to help us develop future resources for you and your clients. To earn one CPE credit for today's event, you must remain online for at least fifty minutes and respond to three of four attendance polls. The polls will pop up on your screen along with a ringtone. There is no right or wrong answer. Click submit to record your attendance. To ensure you see all polls, be sure you disabled all pop up blockers on your device. Instructions are available in the files and resources window. Once you meet all CPE requirements green check marks will appear. Then you can download your certificate. In mobile view tap your screen to display the toolbar and click the certified tab to access this view. After today's webinar we will also send a follow-up email which includes a link to download your CPE certificate. At the close of the webinar we invite your feedback on our session evaluation. Finally, this presentation does not constitute legal advice and is for informational purposes only. Thank you again for joining us. We will now transition into today's topic. Alright everybody, welcome. My name is Gene Marks and thank you so much for coming to today's webinar. We're going talk about the top regulatory issues that are facing us and our clients and whether or not your clients are prepared. This is going to be a very technical type of webinar. It is really for accountants and tax professionals like you and me. We want to increase our client engagement. We want to be able to better serve our clients as well. We want to look for practice opportunities, and I want to make sure that you as well as me as well, we're all getting CPE credit here, are taking advantage of all the knowledge that Paychex has and our great panel of experts who will be discussing what are big things. By the way, for the team, I'm not seeing the agenda on our slide right now, unfortunately. So I'm not sure it's sort of like a blank slide that I'm looking at right now, but that's still okay because let me go through what our agenda is going to be for presentation. We're going to be talking about some of the compliance issues that we need to be aware of and that includes things like no tax on tips and no tax on overtime. It will also include things on retirement, new changes that are made there as well, independent contracting, a little bit about AI, a little bit about other things from paid time off, mandated and sick time that is also required as well. These are, all the things that we're going to be covering on the agenda today. Ah, here's a good slide for you. These are today's speakers. These are going to be our panelists that will be going through their areas of expertise. They are all from Paychex. I'll be moderating the conversation, asking some questions as we move along as well. Hopefully questions that you'd be asking as well. And bear in mind again, there is a Q and A panel for you to submit questions if you want to and any questions that are submitted, we will respond to if not on this webinar, certainly later. Anyway, so to our panelists, There's Bill Gosselin. Bill is a compliance analyst at Paychex. He is now in his twenty seventh year with Paychex. He started with the company when he was just two years old. He is now serving as the lead liaison between the US government tax agencies and Paychex. He's helping the company and its clients maintain compliance with federal payroll tax laws. We are gonna be talking to Zach Keep. Zach has got more than fifteen years of experience in the retirement plan compliance industry. He's familiar with the per particulars of ERISA and non ERISA four zero one k's and four zero three b's and four fifty seven plans as well. Zach manages a team of analysts at Paychex who supports the increasing complex privacy telephony and AI compliance world as well. And also, we'll be hearing from Jared Rudder. Jared has worked in the HR space for more than twenty five years. In his current role, he collaborates and partners with HR professionals, supporting paychecks clients with their workforce needs. He's also PHR certified and SHRM CP certified. He is based in Charlotte, North Carolina. Okay. Our first presenter coming up today is Bill Gosselin. Bill is going to be talking about tax law and taxes. Bill, hopefully you can see the slides in front of you and hopefully you're ready to rock and roll. Why don't you take it over? Thanks, team. Everything looks good on my end. So as Jean stated, I'm going to go over some of the changes that have occurred for 2026 moving forward. The first one, just some information, some of the limits that have changed from last year to this year, obviously the biggest being the Social Security wage base did increase to 184,500 and then some of the other changes listed there as well. And then another important topic for everybody to keep in mind is the federal unemployment tax or CUDA credit reduction for 2025. There were two jurisdictions that failed to repay their government loans from Title 12 loans. They they are California and The Virgin Islands. So California, did have a credit reduction of 1.2%, which is going to result in employers having to pay $126 more per employee for 2025. And then The Virgin Islands had a pretty significant one. They've been in credit reduction for quite some time now, so employers with employees in Virgin Islands are going to be paying a little over $350 more per employee for 2025 for fee to tax. So just some of the basics on some of the changes that happened in 2026. So now we want to move on to obviously probably some of the biggest topics that you and your clients are looking for and need answers on moving forward with the no tax on tips and no tax on overtime that was part of the One Big Beautiful Bill Act. There are two separate provisions. They are the no tax on tips and the no tax on overtime. They both were part of the One Big Beautiful Bill Act and they both are in effect from tax years 2025 through tax years 2028. They both create new personal deductions for employees. So that's an important piece. It's important for your clients to realize that there's nothing that they need to change. There's nothing that changing on their end as far as how they do their payroll calculations or withholdings. They're still going to have to withhold federal income tax. They're still going to have to withhold FICA. All the savings and deductions happen on when the individuals file the personal income taxes at the end of the year. So how does the no tax on tips work? It's basically any voluntary tips that an individual receives in certain qualified industries. And basically that boils down to service industry, hospitality, any industry where tipping is customary. And voluntary tips is the important piece of this. What that means is the tip had to be generated voluntarily by the customer. Anything that is an automatic charge, whether it's automatic gratuity over parties of 10 or more or a service charge, those don't qualify for the no tax on tips. It's basically anything that the customer did freely on their own and they were able to choose however much they wanted to give to the individual. And like I said, it is limited to specific occupations. The Treasury Department and the IRS did issue a listing of what they were calling occupational codes in industries where tipping is customary. The no tax on overtime very similar. Again, it's from tax years 2025 to 2028. The key aspect of the no tax on overtime, it's only the premium portion of the FLSA time and a half requirement. So if you're paying an employee 1.5 times their rate on anything over forty hours, it's only that 0.5% that, no, excuse me, yeah, that is eligible for the deduction. Anything that's more than 0.5 or anything that may be covered by a state mandate or a union contract or anything like that, that doesn't qualify. It has to meet the FLSA standards in order to qualify for the deduction. It is limited to $12,500 per person or 25,000 for joint returns. And I will go back and say for the tips, I forgot to mention this, for the tips, the deduction limit is $25,000 total per return. And the difference here is if you are single, you get a $25,000 deduction on tips. If you file jointly, the limit is still $25,000 for that return. The overtime is a little bit different because it is on the individual, so it's $12,500 per individual making it again $25,000 for the joint filers. So there's a little bit of a difference there with the tips and the overtime and how the deduction can be applied. Both are reported on the W-two. The IRS did offer transition relief for 2025. It is not required for employers to provide that information on the W-two. The IRS definitely recommends it and they're advising employers to do their best to provide that information to individuals, but it's not required for 2025. It will be required starting in 2026. So what does that mean? The IRS, as of recently, it does state here that a draft was released for the W-two. They've actually finalized that. So the W-two for 2026 has been posted, it is finalized. They have made some modifications to it. They have not, however, finalized their instructions. The instructions are still in a draft form, which means that they're still tweaking them. There still can be some changes that they're going to make to them. But the form itself is set for 2026. Again, they've made some changes. They've added some boxes for how you can report this information. And so for different codes that you can put in there to list the occupations that are qualified for the tips. And then obviously they made changes to the W-four, the withholding certificate. The form itself was not changed, but they did make changes to some of the worksheets that are in the instructions, which help individuals calculate their withholding and they've added spots in there for adding tips over time that an individual might anticipate that they're going to receive so that they again can properly have their withholding done. So at the end of the year, hopefully they don't know anything and hopefully they've been tasked right the entire year. Down below, Oh, obviously there's some yeah, sure. Sorry, Jean. Frans, what you were going to say, and I just have a question and a comment. Go ahead, Frans. I was just going mention, you know, there's a couple of references down there. Very important to stay abreast with the employer tax guide publication 15, and then the IRS does have an OBDA provision page that they are updating from time to time so definitely want to monitor that to make sure you're not missing any guidance that comes out. Perfect and quick question, so I understand there is a phase out an income state phase out for individuals to take advantage of both of these deductions? Yeah, great point Gene. For both the no tax on tips and no tax on overtime, the phase out is $150,000 per individual or $300,000 for joint filers. So yeah, that was definitely a great point. There are definitely phase outs when you reach certain income limits. Okay, fair enough. A reminder everybody, gonna have a separate CPE webinar that's dedicated to this topic. It's going on February 10. You definitely want to attend it. And one big point I just want to say only because I'm already seeing my clients, you're gonna see it with yours. Your clients employees are going to be told by their accountants that they need to find out what their eligible tipped income is or their eligible overtime income is so that they can take this deduction on their tax return. And a lot of people are gonna try and get this done as soon as possible because it might result in them getting refunds because they probably didn't adjust their withholdings during 2025. They're gonna come to you and they're gonna ask what was the number and you better be ready to provide them the number. So we're sitting here now in mid January. You've got a little bit of time, but I strongly recommend that you talk to your payroll professional, you talk to your accountants, whoever's handling payroll. You should get those numbers together if you're a service business with tipped workers. What are the eligible tipped income amounts for your individual workers? And if you are paying overtime, same thing. What is the eligible overtime wages? I know the government doesn't require you to report this, but your employees are going to be asking and rather than having a big fire drill later on, might want to prepare for that now. All right, Bill, let me go back to you because we now have things to talk about regarding research and development. Yeah, thanks Gene, and just to get back to what you said, excellent points you made there on the tax on tips in overtime. So some of the other changes that came out of the One Big Beautiful Bill Act. There were changes made to the research and development deduction employers are eligible for. The biggest change is that the law was changed to allow for the immediate expensing of research and development expenses. Previously, you had to amortize those over five to ten years in order to claim the credits. The change now has gone into effect. It's effective beginning in tax year 2025, where you can fully claim those deductions. Basically for tax year 2025, you have the choice where you can either claim it all in 2025 or you can split it up between twenty twenty five and 2026 or you can continue to spread it out if you so choose. But again, it allows you to do the 100% immediate expensing. What's qualified? Basically any research that you do and it's not limited to, you know, it basically, you know, keep in mind it's any research effort. Any research that's meant to improve your business, which can include anything from improving your products, your processes, software, any functionality, anything like that. There's a lot of opportunities here to qualify for the research credit and to get those deductions. So keep in mind that, you know, any expenses that you incur with that, whether it's paying wages to individuals actually performing the research, whether it's anybody directly supervising the research or any consultation that you're using or support of that research, all of that could potentially qualify. It is only based it's only available to U. S.-based businesses, so keep that in mind as well. There were also transition rules which allowed for businesses to go back to 2022 to recapture some of these credits that they may not have been able to. Again, you can fully for businesses, they can fully claim it in 2025 or they can split it across 2025 and 2026. And then it's important small any small businesses and small businesses are defined with anybody that has an annual average revenue of less than 31,000,000. They can go back to 2022 and amend those returns for 2022, 2023, 2024 and claim those deductions as long as they file those amended returns by 07/04/2026. So definitely some great opportunity there to improve your cash flow, recognize immediate tax savings and get more money back into your clients pockets for them to be able to do reinvest that, whether it's in other research or innovation methods. So definitely something to look at, very important for your clients to be aware of these changes moving forward. And Bill, just to to make sure, and so our viewers know this, so there's the research development tax deduction, which is as most of you know, doing these returns that that kind of deduction went away. Had to you couldn't take it on the first year yet to amortize those expensive for five years and as Bill explained, it's back. So you could take it this year and you can go back to 2022 if you want and amend returns for your clients to take advantage of that deduction if they were amortizing it, so that's a big benefit. And then of course, there's the research and development tax credit. There was a quick mention made on the previous slide. That is a separate thing from the tax deduction. The, no big changes to that, you know, from the One Big Beautiful Bill Act, but, certainly available to take advantage of if you're not claiming expenses for a tax deduction. You can actually put expenses through, to get a tax credit related to your research development activities. These are things that you want to evaluate with your clients, Bill, right? Like you had mentioned, you don't have to be in the pharmaceutical business to take advantage of these kinds of things. I do have lots of clients that are in distribution and manufacturing. They're testing out products, doing samples, and taking advantage of these, both the deduction and the tax credit, and it's a really great way to engage with your clients and maybe help them save some money, they're going love you for doing that. Anyway, that was my point. Yeah, great points Gene. Absolutely And you know, as Gene mentioned, you know, obviously there's some things businesses should do obviously monitor IRS, any guidance that comes out, work with your clients to see what they might have that qualifies take advantage of this. So now we're going to move on to the Work Opportunity Tax Credit, or WOTC as it likes to be called. WOTC actually expired on 12/31/2025. WOTC has been in place for many years and has always managed to get extended before it expired. However, that didn't happen this past year. With everything else going on, kind of took a back seat. And as of right now, WOTC is what they're defining as on hiatus. There's a lot of talk that it might come back, so we'll have to wait and see. But just to give you a little background, WOTC is a tax credit that allows for businesses to see some tax benefits for hiring individuals from disadvantaged opportunities or disadvantaged targeted groups, veterans, ex convicts, or other groups that qualify. If you hire those individuals, you might be able to get a tax credit for that. So obviously, like I said, it's expired. There's a lot of talk in Congress. There's a lot of desire for this to be reinstated. So the hope is that at some point we will see a reinstatement of WOTC. Hopefully it will be a retroactive reinstatement, but we'll have to wait and see on that. So what should your clients do? They should definitely still go out and hire those individuals if they're so desired, do all the appropriate screening that they would normally do in order to make sure that they could qualify for the credit in the anticipation that it is reinstated. And, you know, obviously keep in mind some different state opportunities, state laws that also give benefits to hiring from these specific targeted groups. So again, keep your eyes open, be on the lookout and know that you know, work with your clients to make sure that they know, okay, it's not available as of today. But like I said, the hope is, is that we will see this reinstated hopefully sooner rather than later. And then the last topic I'm going to talk about is the recent government shutdown that we came out of back in from October into November. It was the longest shutdown that we have seen. It was finally resolved on November 12. But it didn't resolve everything. There's still a lot of open issues that we're hoping Congress is going to take some action on. What we're looking at, the main sticking point, kind of why we went into the shutdown to begin with was expiration of the ACA subsidies, the premium tax credit. Those were not reinstated when the shutdown was resolved. So there are a bunch of appropriations that are set to expire on January 30. Again, we are hoping that Congress will take action and avoid another shutdown from happening. Hoping that some of those premium tax credits are reinstated because it's obviously costing a lot of individuals opportunities for affordable health care. And unfortunately, some people are opting not to have health care just simply because they can't afford it. So again, we'll have to wait and see. We're hoping that Congress takes some action. We're getting down to the wire here. We have ten days before we're into a partial shutdown again. Everybody keep their fingers crossed that our elected officials can get their act together and do the right thing. And that pretty much concludes my area on the tax changes. I'll turn it back over to Eugene. Awesome, Bill. Thank you very much. And everybody, again, remember we are going to have an in-depth webinar, a CBE webinar that's dedicated to No Tax, One Tips and overtime on February 10. Also please know Bill and I spent some time on the Paychecks Thrive podcast where we dug deep into some of these issues as well. I also spend time with our AutoChief presenters as well. So you're getting the overview, but please check out our Paychex Talk podcast because you will be able to get even more information about all the topics that we are covering in this webinar. Okay, Jared, you're up. We have got things to talk about regarding mandated paid time off and family leave and other things that are affecting you depending on where you are and what state that you are living in. So I will hand it over to you. All right. Fantastic. Thank you, Gene. Just to confirm, had audio problems last week. Everybody can hear me? Sound good. Good deal. All right. So we are going to dive into the wild and wacky world of employment laws, Jean suggested. And as we go through these topics, we're going to go through them at a relatively high level overview perspective. We want to give you just enough information so that you are equipped to have some awareness as to what is going on in the employment law world as we move into 2026 as a way for you to strengthen your advisory services with your clients. And really what we're trying to do is pull together areas in which perhaps accounting and HR intersect. So let's start our magical HR tour here as we go. And Gene did allude to the fact that one of the items we're going to talk about here, paid family and medical leave. And these are starting to pop up more frequently. There's currently 13 states that have a form of paid family medical leave. A few of them, four to be more specific, do have some changes that will be taking effect in 2026. And there is a change that will not take place in 2026, but it actually will expand out beyond that to '27 and '28. But just quickly going through those, have Delaware. Delaware is the deduction started in 2025 effective January 1 employees in Delaware are going to have the opportunity to submit claims and take advantage of the benefits offered within the state from a paid family leave perspective. Maine, very similar. 2025, the deductions started or the contributions started. Benefit eligibility, however, won't start until May 1. Minnesota claims can be submitted, benefits can be accessed effective January 1, so a few weeks ago. And then last but certainly not least as it pertains to changes, Maryland and Maryland has postponed or rolled back their paid family leave law a couple of times now. But the deductions within Maryland for employees in Maryland will start 01/01/2027 And then benefit eligibility or the opportunity to take advantage of benefits will start 01/01/2028. So it's important to make sure that your clients are registering where they need to register. This starts to get complicated when we start to look at different requirements in different states, which I'm going to touch on here momentarily. An area where it's really important that you help your clients will be from the perspective of budgeting to make sure that the dollars that will need to be allocated towards these deductions or contributions, I should say, are available and that they are remitted to the state. Lead management and important to make sure that the leave itself is being documented, making sure that your clients are taking steps to effectively notify their employees of their rights. And again, these notification requirements can vary from state to state. And there is recordkeeping requirements for these laws, can vary from state to state. So we're not going to start getting too into the weeds on this, as I mentioned. There is also an option for private plans that an employer can utilize opposed to the state managed fund or plan. But when you start to talk about multistate complexities, try to understand and communicate to your clients that there is not a black and white answer to the majority of questions that are out there as it pertains to, Okay, well, if I have employees in California, Maryland, and XYZ states, which law do I follow? It may be clear within a specific state, but oftentimes it's not. So there are various different factors that are looked at and considered when trying to assess which law is applied, how is it applied. And there may be certain situations in which an employee may actually be eligible for leave in two states. They could be in Massachusetts and also fly back and forth and work in New Jersey and be eligible for leaves in two different states. So we have HR business professionals that can help with a lot of these determinations. And in some situations where there may be some ambiguity with regards to the interpretation of a law, that's oftentimes where an employment law attorney is going to come into play. Sticking to a similar theme, slightly different, we have paid sick leave laws. Also within the country. There are 20 ish states that have these leave laws. Please note that there are localities that also have laws and these two are going to vary from state to state and locality to locality. There's nothing at the federal level that mandates that paid sick time be provided. However, federal contractors may be in a situation in which they do have to provide paid sick leave to their employees. And there are also states that have industry specific requirements and or industry specific carve out. So something to be aware of there as well. When we talk about twenty twenty six changes, as you can see on the slide, California has expanded their definition of safe time coverage to allow for situations in which an employee perhaps makes to needs to make an appearance in court or serve jury duty for themselves or a family member that perhaps has been the victim of a serious crime. Connecticut, they have significantly lowered their threshold as far as the number of employees that an employer has to have in order to be a covered entity under this law. It was 25 employees. That number has now been dropped down to 11 or more. And that's a fairly significant drop when you consider that 11 employee companies are, I mean, they're small. They're dealing with different types of budgets and different levels of manpower. Oregon, they add blood donation as an eligible reason for sick leave. These updates and changes and modifications do pop up fairly regularly, as do new laws. So trying as best you can to have an understanding as to where your clients have employees for purposes of trying to help to identify if there are any locations that there is a law and perhaps they're not following that law or providing this benefit. It's important that your clients have policies in place. Again, something that you can incorporate into your advisory services, not necessarily to provide them with a policy. That's something that generally on an HR side of the house would be addressed. And we have policies that we're able to provide. But just making sure that the policy exists as you work through those consultative discussions with your clients. So what should businesses do? Again, make sure that you're keeping up to date as to what's going on when, changes are going to take place. Make sure that policies are updated. Verify employee count. Understand what is and is not considered an employee and included in the establishment of an employee count for one of your clients and really reinforce the importance while engaging with your clients to ensure that they are taking steps to train their managers on policies, state, local law requirements. If management doesn't necessarily understand what the obligations of the organization are, that can lead to a breakdown and create additional risk for the company. And Jared, I'd just like to say and jump in. Mean, for those of you that are watching us, I mean, we know our clients, can't keep up with this stuff, you know, I mean, particularly if they're owners of companies and honestly, no offense on their HR managers or HR people or payroll people, they're super busy, so it's tough. I was just at a trucking client in Texas last week. They have trucks all around the country, and and they have big issues about that, like, what states apply to what truck is it where they live, it's to where they spend most of their time working, is it where their company office is, it's complicated and it's just what Jared said at the very beginning that there's no right or wrong answer, really depends on what it is. It's a real practice opportunity for us as CPAs to liaise with our clients and be between HR professionals like Paychex to communicate to our clients what to do. We know our clients need this service. So anyway, it doesn't end with paid time, with paid leave or sick time. There's worker classifications, it really depends on States. I, Gerard, why don't you explain what that means? Yeah, and this is an area of HR that does closely intersect with the accounting industry. And having said that, you're probably aware that there have been a lot of changes in this pendulum that has basically been swinging back and forth over the course of the past pushing twenty years at this point. And the goal of some to make classifying workers as independent contractors easier and some who have a desire to make it harder. We're not going to get into that. We're not going to really talk about the pros, cons of either. But what's important to understand is that the twenty twenty four rule is it's intended to be replaced. There are multiple challenges within the courts right now that is really putting us all in kind of a wait and see position. But as of May, the DOL announced that really the law of the land is going to be fact sheet 13, which dates back to 2008. You can see here on the screen there is a Paychecks Works article that will provide some additional information. And when you go to Fact Sheet 13, the first thing you'll see at the top of the screen is actually information reinforcing more or less where we've been, where we are. And there is some information in linking to fact sheets and field assistant bulletins. So as you consult with your clients, it's going to be really, really important to make sure that one, they are aware of this. We see a large percentage of our clients that don't necessarily understand the differences in the intricacies between an employee relationship and an independent contractor relationship. And sometimes it's as simple as a request from a worker that or an employee that wants to be an independent contractor. These can start to get pricey. So when ramifications are determined, it's going to be determined based on whether the misclassification was more or less an oops and tensions were good. But the misclassification took place. It was an error and the employer still took the appropriate steps to make sure that contractors were paid, 1099s were filed. When you look at an unintentional misclassification, they're obviously going to be less expensive. You're looking at your client paying about 1.5% for federal withholding that the employee would have paid and 20% of the employees share of FICA and then additional potential employee fines interests. You remember that one of the things to be considered is benefit eligibility for independent contractors. That is to say they shouldn't be eligible. And if it turns out that they should have been employees, well, then you have one of your clients that has an issue with the fact that they haven't been providing the worker with benefits. So when you start to look at intentional or fraudulent, this is going to be a scenario in which there was a misclassification and perhaps ten ninety nine have not been filed or perhaps there is reason to believe that this was done intentionally for purposes of avoiding the payment of certain types of taxes and again, providing benefits. The fines are going to double or the responsibilities are going to double. So when you look at federal withholding, you're primarily going to be looking at about 3%, 40% for the employee share of FICA. You are able to apply more or less the employee portion that they maybe have already paid or this would be a worker or independent contractor. And there are potential fines that also need to be considered. So again, this can start to get pretty expensive pretty quickly. Jared, you lost your sound. Can you hear? Can you? Yeah, sorry about that. When we talk about the relationship here between worker classification employee versus an independent contractor and the OBBBA, ultimately there's concern that if someone is misclassified and it turns out that that someone arguably should have been a nonexempt employee, meaning they would have been eligible for overtime depending upon the number of hours that they're working in a predetermined work week, forty or more at the federal level, which is what is taken into consideration. The risks that come along with misclassification are exacerbated by the fact that one, you have the misclassification and your clients could be responsible for back taxes, liabilities, interest fees. But there's also concern then of, W-2s not being reported correctly because, 2026 it's going to need to be over time will need to be reported on W-2s. And you also can start running into situations in which there is risk of your clients having a wage theft claims against the company or wage and hour claims. So what should you do or what should your clients do? Conduct a classification audit. We do a lot of this with our clients. Again, this is more on the HR side of things. We work through a job analysis with our clients and making sure again here that you stay informed. And it's usually a scenario when we do our part on the HR side of the house. We identify a potential misclassification. That's generally when we're going to refer the client to you all as CPAs or depending upon circumstance could also be a referral to their legal counsel. But bringing up the rear here and making sure that we have some time for Zach to cover his topics. When we talk about the overtime rule, the main takeaway here is going to be that the salary basis test at the federal level is going to remain as the $20.19 amount which is the $6.84 per week. Highly compensated employees still the $107.04 32 per week. Remember there are different thresholds in certain states and different payment requirements. And remember that there's also a duties test that comes along with the determination of exempt versus non exempt. And that too is an analysis that we're able to help our clients with. And oftentimes we do find ourselves in situations in which we need to refer our clients to their CPA or legal counsel to try to figure out if there was a misclass ification, what does in fact need to take place. So important notes, the no tax on overtime provision in the 2025 law tax law is separate from DOL rights. Two completely different things. Try to avoid conflating the two. The tax laws rely on the FLSA definition, not state overtime definitions. It's a personal tax deduction and above the line. And here again just don't conflate the two requirements that being the tax law and the laws that are written into the FLSA. All right Jared, thank you very much. I have one comment on your entire section and it's just this that, I have a Yorkshire Terrier, I made sure he had plenty of treats before I started this webinar, So we got to talk. What kind of dog do have? He's an English Bulldog and he's a handful and I thought I got and beat down the door basically. You got the information through and you handled it like a champ. Next time we'd like to see him on screen. Okay. It just makes the whole experience that much better. But anyway, we'll talk. Alright. Well, thank you very much. That was very very helpful. Really good information on all these rules of worker classification, paid time off. Sorry, paid family leave, mandated sick time, overtime rule. It's a lot to cover. So we got about fifteen minutes left in this webinar, and I'm gonna turn things over to Zach Keefe. Zach has got some really important updates on retirement plans to start with, so Zach, why don't I bring you in and let's get going. Okay. Gene, thank you so much. Always a pleasure to, to be on the line with you. You don't have a bulldog here by any chance, Zach, do you? No, not at all. They will not let us have any animals in the office, but, maybe we'll talk to the VP about it. So, Gene, I think you and I have been talking about Secure two point zero for what, about three years now. And I kinda look back on the passage of Secure two point zero at this point with a little bit of nostalgia, and we've seen a lot of the changes wrought by the passage of that legislation come and go. We saw automatic enrollment, we saw a ratification of catch up provisions, we saw the tax credits, we saw new types of distributions. And now as we're kind of looking at 2026, we are sort of staring down the barrel of what I think is the last real secure two point o change. It's a change that's effective in 2027, which begs the question, why are we talking about it now? And the answer to that is twofold. Number one, this is gonna be a big change, and I think it's gonna affect many of the folks that, are listening to today's presentation. Certainly going to affect your clients as well. And throughout the course of 2026, we're hoping for some guidance because right now there are a lot of unanswered questions about this last and arguably most interesting secure two point o change. What is the change? Well, it's the transition of the savers credit that we all know and love. It's been around for ages into what is being called a savers match. Now, the savers credit, the refundable tax credit, it's typically targeted, let's say the lower and maybe middle income earning individuals. And if you are contributing to a retirement plan, typically a four zero one ks, you're gonna get, a little bit of a tax credit. I think that's a great thing. I think, taxpayers have certainly been excited about it. Probably some of us here on the line have been excited about it, if not now, then maybe earlier in our careers. It's a good thing. Secure two point zero was very innovative. It did a lot of innovative things, and one of those things is helping bolster retirement savings. The way that it sought to do that was by changing this credit to a match, a match like an employer match that we all know and love. Probably many of you who offer or work with four zero one ks plans have some kind of employer match, but this match is coming from Uncle Sam. It's going to be a federal matching contribution deposited directly into an IRA or, and here's the key part, into a retirement plan account. And as we, go through our next poll, I'll say that, that's going to pose some challenges when it comes to what employers, what we all in the industry, what, what accountants as counselors to their client are going to need to do. So what is the challenge? There is no infrastructure today to support a direct treasury to retirement account transfer. There's certainly infrastructure for a tax refund. Most people get them. But when it comes to those dollars getting into a retirement plan, particularly a four zero one ks, we just don't know. And honestly, the implementation timeline is fairly tight. We're expecting guidance this year because there are a myriad of questions. Some of those questions, and I think all of us on the presentation today will probably hear this question from a client before the 2026. How is the money going to get into the account? What role, if any, does the employer play in that transfer? And quite frankly, how is the employee going to know which retirement plan should receive this match? You know, oftentimes we know that, employees that they might specialize in any number of things, but they probably don't specialize in retirement. And it's fair to say that oftentimes they might not even know where their four zero one ks is being held. So as we look at 2026, we look with great anticipation towards the release of any kind of guidance because folks in industry like paychecks, we are going to need to start building and, you know, folks in the CPA realm are gonna need to be prepared to counsel their clients. So what is going to be the impact? Well, you know, the number one, they're gonna be employee questions. I I think, you know, a lot of employees, a lot of four zero one k participants have they probably gotten used to this tax credit that's now becoming a match. So there are going to be questions not just about where is the money, but also how do I as an employee know where this money is going to be sent and what does that look like? And I also think we've got the potential for non seamless transfers, particularly to the extent that, employees need to take action with this. If it's something where an employee is going to need to be heavily involved and it's not a direct payment, we've got, a pretty good chance that at least some of us are going to deal with some less than efficient transfers, and, you know, probably some employee concerns that follow hard on the heels of that. So from a retirement standpoint, I think that, everyone should prepare your HR and your benefits teams to start answering the questions that you're gonna get. And I think we should all monitor implementation guidance from the Treasury and the IRS. There could be a delay with this. We just won't know until we get a little bit farther into 2026. Zach, one comment on this. I just, you know, I'm looking at it, it's complicated. We're still waiting for all the guidance, all that you just said. I'm curious to see how these these contributions from the government reflect on discrimination tests for employers. In other words, as an employer, do I can I contribute more to my four zero one k plan because my employees are putting more away into their retirement, you know, balances? We probably don't know all the answers to those questions, but there there could be a silver lining to this complexity if it allows us to contribute more to our plans and allows our our clients to do this. So as as CPAs, we we should probably be on top of Gene, that's a good point. I think this is a great thing, but, change is sometimes uncomfortable. That's what this really boils down to. Let's talk about, kind of another banner provision, the, the Rothification of catch ups. This is something that, is happening right now, folks, effective just a couple of short weeks ago, 01/01/2026. Participants who earned over $150,000 in Social Security wages last year. If those participants are making a catch up contribution to a four zero one ks, four zero three b, four fifty seven, that is a catch up based on, attaining age 50, Those individuals who are A, making the catch up, and B, who earned more than $150,000 last year, those folks must make those contributions on a Roth basis. Anyone who's contributing above that four zero two gs limit and made above that income, there is no option. Those contributions need to be Roth. This has been coming for a long time. It was delayed a little bit as, some some large industry players lobbied pretty aggressively, I think, to, to see a bit of a stay of execution with this. Lots of infrastructure has been built when it comes to the administrator side of things, but there are things that an employer needs to know. Number one, an employer is going to need to review participant wages to identify which of their employees are going to be impacted by this. You need to know who's making above that, that, high earning threshold. You're going to need to ensure that your four zero one ks plan offers Roth deferrals. If it doesn't, these folks aren't going to be making a catch up. You're going to want to monitor those deferrals. Probably, I think would be wise for an employer to monitor not just the deferrals, but to look at who's on track to utilize a catch up and be prepared to counsel that individual. And last but not least, I think employers are going to need to be prepared to entertain questions from those high wage earners. You know, as as CPAs, I think often the decision makers at your client base might be coming to you with questions. They're probably the folks who are going to be likely at least to be using these catch up provisions. So this isn't a change that affects everyone, but I think it is a change that's going to have an outsized impact because especially in the small and medium space, these are often the folks who are signing the checks, so to speak, at a business. So I would also say we have a couple of podcasts and some other tools out there that go a little bit more in-depth on Rothification. Would definitely encourage everyone to check those out. Yeah, definitely. I just want to say that I think you and I recorded one actually earlier today that will be coming out soon and I want you all to know I was beating up Zach pretty bad with some questions about these mandatory Roth contributions. So check out our paychecks thrive podcast on the topic. It should be available very, very soon. And, you know, I'm gonna move quickly through this, through this last section on retirement because this shouldn't be news to anyone. We all know that, state mandates have grown a great deal at this point, probably close to half of the states in the union have some type of retirement plan mandate, which is to say employers must offer a retirement plan. Usually that's a state IRA plan, but know that, a four zero one ks will satisfy the mandate as well. So we encourage any CPA take a look at what's required in your state, in the states where you do business, where your clients do business. And keep in mind, there are a number of options when it comes to satisfying those their state mandates. And lastly, in the, in the brief time remaining to us, I want to talk a little bit about AI that is, that's the hot topic. It's the order of the day. Anyone in the industry is really excited about AI, and we get a lot of questions about what's going on at the federal landscape. The short answer, probably not much yet. I expect we're going to see possibly even this month. We're going to see some things, introduced in the various houses of Congress. There was a sense in the waiting days of twenty five that we would see a law passed which temporarily preempted state AI laws that did not pass. Instead, what we had was an executive order in late December. What that order does is not preempt state laws, unfortunately, or fortunately, depending on how you look at it. We all need to be aware of what's happening in the states where we do business when it comes to AI. The executive order does stand up the infrastructure to to address quote unquote onerous state laws. So that's something we're gonna need to watch. There's gonna be a lot of action at the state and maybe the federal level throughout 2026. That preemption might or might not happen. And, what we do see when it comes to state AI laws, broadly speaking, we see consumer protection. We see disclosure requirements on artificial agents. So if your next podcast is going to be, an AI Zachary, keep talking about retirement. There'll be a disclosure that it's an AI that you're hearing and not a real person. And, you know, also I think a lot of common sense things relating to, deep fakes and things like that. So AI legislation is going to continue to move. It's going to continue to be a little bit scattershot until and unless something happens at the federal level that either preempts or just generally supersedes. So all of us, our responsibility is to monitor what's happening, particularly at the federal level, and to, track what's happening in the jurisdictions where you do business. Not least, you should probably budget for some compliance infrastructure, because the legislative situation is going to continue to crystallize throughout 2026. All right Zach, that was fantastic. Thank you very much for a very, very informative presentation. Let me get to the right slide here. Hopefully all of you have seen, and I've seen this as well as a Certified Public Accountant, all the consultative opportunities that are here. HR is a big issue for all of our clients and really they look to us if we have a personal relationship with our clients for advice and guidance and obviously you can lean on a company like Paychex to have your back with the information that you need. One great platform to consider is the Paychex Partner Pro platform. I've seen it in action at numerous clients of mine. It is where you can get a full deep down insight into your clients payroll and HR activities, so you are up to speed on what is going on. You've got the information real time and up to date so that you can provide good advice and guidance to your clients about anything regarding HR or their payroll. In addition, these are a bunch of authoritative federal resources that you can access as well. I'm not going to read them all out to you. They are available in the slide deck, which you can also download, and the same thing with Paychex sources for accounting professionals. All this is on Paychex's website. These are all different session resources. Our February 10 CPE webinar that you want to register for which will be all no tax and tips on overtime, as well as other documentation that will help you run your practice. So everybody, thank you very much for joining us. We hope you found this webinar helpful. I know I did, got a lot of good information from it as well. We are going to, I'm going to ask Crystal, I'm going to thank my fellow panelists for joining us today, both Jared and Bill and Zach. I'm also gonna ask you guys as well as myself, we are going to mute our lines and we are going to turn off our cameras, give you guys the opportunity to download your certificates so that you can get proper credit for attending this webinar. I know I'm gonna be getting my certificate as well. So thank you guys very much for joining us here. Hope we got great information. Download those certificates, get your CPE as well. We will see you at the Paychecks Pride podcast or another webinar as well. Thank you.