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A Manual for Credit Unions Prepared By Your League
Publication No. 285
January 2, 2014
To: All Credit Unions
From: Compliance & Regulatory Affairs
Subject: 2013 Year-end Reminders
Social Security Taxes
The wage base for Social Security will increase to $117,000 for 2014. The tax rate will be 7.65% for 2014.
The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion
(OASDI) is 6.2% on earnings up to the applicable taxable maximum amount for the Medicare portion
(HI) is 1.45% on all earnings. As a result of the enactment of the Patient Protection and Affordable Care
Act, on January 1, 2013, the Medicare tax rate increases by 0.9% from 1.45% to 2.35% on wages over
$200,000 for single and $250,000 for married filing jointly.
Federal Unemployment Tax Rate (FUTA)
The FUTA tax rate remains 6.0% for 2013. Use Form 940 to report your annual Federal Tax Act (FUTA)
tax. Once the worker’s earnings reach $7,000 during a given year, the employer no longer pays any Federal unemployment tax for that year with respect to that worker.
Minimum Wage
The Federal Wage and Hour Laws, administered by the Wage and Hour Division of the U.S. Department
of Labor’s Employment Standards Administration, establish minimum employment standards including
minimum wage. Minimum wage will remain at $7.25 for 2014.
Standard Auto Mileage Reimbursement Rate
Beginning January 1, 2014, the standard mileage rates for the use of a car (also vans, pickups or pahel
trucks) will decrease one-half cent from the 2013 rates to 56 cents per mile for business miles driven. The
business mileage rate was 56.5 cents in 2013.
HMDA (Home Mortgage Disclosure Act) Reporting Trigger Threshold
As of the date of this publication, the Federal Reserve Board had determined that $42 million is the triggering threshold for reporting under Regulation C/Home Mortgage Disclosure Act.
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Need further assistance? Contact your League’s Compliance & Regulatory Affairs Team:
800.768.3344 ext. 610 • 434.237.5068 (fax) • [email protected] • www.vacul.org
COMPLIANCE OPERATIONS MANUAL
PUBLICATION NUMBER 285
Mortgage Interest Statement
Any credit union member who has paid $600 or more in mortgage interest in 2013 must be sent a Form
1098 Mortgage Interest Statement by January 31, 2014 (Copy B). File Copy A of this form with the IRS
by March 1, 2014. If you file electronically, the due date is March 31, 2014.
Statements for Recipients of Interest Income
Any credit union member who has received $10 or more in dividends in 2013 must be sent a Form 1099INT Statement for Recipients of Interest Income by January 31, 2014 (Copy B). File Copy A of this form
with the IRS by February 28, 2014. If you file electronically, the due date is March 31, 2014.
IRS Reporting: Reporting of interest paid to nonresident aliens – financial institutions have long
been responsible for reporting interest paid to depositors who are either U.S. Citizens or resident aliens.
But financial institutions have not been required to report interest paid to nonresident aliens except for
those from Canada. As of January 1, 2013, financial institutions will be required to track interest paid to
all nonresident aliens from 78 countries specified by the IRS. If the aggregate amount paid in a year is
$10.00 or more, then the interest must be reported to the IRS on form 1042-S, and the first report (covering interest paid during 2013) will be due on March 15, 2014. A copy of the 1042-S must be provided to
the member.
According to the IRS, the 1042-S form can be completed using the information that the member provided on the W-8BEN form, which should already be in the financial institution’s records.
The list of 78 countries can be found here: http://www.irs.gov/pub/irs-drop/rp-12-24.pdf. The IRS has
said that financial institutions are free to report interest on all nonresident aliens, regardless of their country, if doing so would be easier.
Resources: For more information about the new reporting requirement, see the following article from the
December 2012 issue of CUNA’s Credit Union Magazine: http://cuna.org/compliance/member/download/comp_mat_2012_12a.pdf. And the following links may also be helpful.
1.
2.
3.
4.
5.
IRS interest reporting requirements for nonresident aliens (Final Rule) (4/19/12)
List of 78 countries
CUNA’s Compliance Report: Guidance on Reporting Interest Paid to Nonresident Aliens
CUNA’s e-Guide – IRS Non-Resident Alien Reporting: Form W-8BEN & 1042-S
CUNA’s Regulatory Advocacy Final Analysis (5/1/12)
S.A.F.E. Act
The SAFE Act renewal period, which began November 1st, expired on December 31, 2013. Remember that under the SAFE Act, all credit unions and their MLOs must renew their registration during the
annual renewal period each year. If a credit union and its MLOs do not renew their registration, they
would be prohibited from originating residential mortgage loans until their status has been reactivated.
Go to http://fedregistry.nationwidelicensingsystem.org/Institutions/Pages/Renew.aspx to Renew or Reactivate.
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PAGE 2
Need further assistance? Contact your League’s Compliance & Regulatory Affairs Team:
800.768.3344 ext. 610 • 434.237.5068 (fax) • [email protected] • www.vacul.org
COMPLIANCE OPERATIONS MANUAL
PUBLICATION NUMBER 285
Regulation D Reserve Requirements
The Federal Reserve Board has amended the reserve requirement ratios for 2013 under Regulation D.
Net Transaction Accounts
$0 to $13.3 million
$13.3 million to $89.0 million
Over $89.0 million
Non-Personal Time Deposits
Reserve Requirement
$0 (no reserves)
3 % of amount over $13.3 million
$2,271,000 plus 10% of amount over $89.0 million
0%
Home Ownership and Equity Protection Act (HOEPA)
The CFPB announced its annual adjustment of the dollar amount of points and fees that trigger additional disclosures and prohibitions under the Truth in Lending Act for certain high-cost mortgage loans. The
dollar amount will be adjusted from $625 for 2013 to $632 for 2014. The adjustments are required under
HOEPA, and the disclosures and prohibitions will apply when total points and fees on such a loan exceed
$632 or 8% of the loan amount, whichever is greater. This latest adjustment will be effective as of January
1, 2014.
2014 Holiday Schedule
The following is a tentative holiday schedule for the Virginia Credit Union League. For the Federal Reserve and Mid-Atlantic Corporate Federal Credit Union holidays, see the * within the following table.
Holiday
New Year’s Day
Martin Luther King, Jr. Day
President’s Day
Memorial Day
Independence Day
Labor Day
Columbus Day
Veterans Day
Thanksgiving
Christmas
Day and Date Observed
Wednesday, January 1, 2014
Monday, January 20, 2014
Monday, February 17, 2014
Monday, May 26, 2014
Friday, July 4, 2014
Monday, September 1, 2014
Monday, October 13, 2014
Tuesday, November 11, 2014
Thursday, November 27, 2014 and
*Friday, November 28, 2014
*Wednesday, December 24, 2014 and
Thursday, December 25, 2014
* The Federal Reserve Banks will be open on these dates.
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Need further assistance? Contact your League’s Compliance & Regulatory Affairs Team:
800.768.3344 ext. 610 • 434.237.5068 (fax) • [email protected] • www.vacul.org
COMPLIANCE OPERATIONS MANUAL
PUBLICATION NUMBER 285
1099C - Reminder
Do not file form 1099-C when fraudulent debt is cancelled due to identity theft and the debtor is not liable for the debt. Form 1099-C is to be used only for cancellations of debts for which the debtor actually
incurred the underlying debt.
Reg Z & M Reminder
The Consumer Financial Protection Bureau (CFPB) and the Federal Reserve Board (Fed) announced increases in the dollar thresholds in Regulation Z and Regulation M for exempt consumer loans and leases.
Effective January 1, 2014, Regulation Z requirements will apply to consumer loans of $53,500 or less and
Regulation M requirements will apply to consumer leases of $53,500 or less. However, private education
loans and mortgage loans are subject to Truth in Lending Act regardless of the amount of the loan.
Federal Benefits Reminder
If your member is receiving Social Security, VA or other Federal Benefits by paper check, they are required by the United States Department of the Treasury to switch to electronic payments by March 1,
2013
Bank Secrecy Act Training
Credit unions are reminded that Bank Secrecy Act training must be done annually for staff and Boards of
Directors. Contact Compliance & Regulatory Affairs if you would like to schedule BSA training. For more
information, contact any member of our compliance team at [email protected].
InfoSight
We wanted to make sure that you are aware of the new compliance tools that are available through the
League. They are bundled together in an online compliance resource known as InfoSight, which is available free to all of your credit union’s employees merely by virtue of your membership in the League.
Some of the tools that you’ll find there:
• A regularly updated compliance calendar that helps you stay on top of upcoming compliance
deadlines and links you to essential information about how to comply;
• A compliance manual with detailed and regularly updated summaries of the various compliance
issues that credit unions must confront in their daily operations;
• A collection of compliance checklists designed to help you spot compliance issues in specific
situations, such as when you are reviewing advertisements or considering whether to do business
with outside vendors;
• A set of model policies that you can use as a starting point for designing your own policies;
• A collection of compliance webinars with clear and concise summaries of many of the most
important compliance issues of the day;
• A regularly published compliance newsletter.
There are no limits on how many of your employees can use InfoSight.
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Need further assistance? Contact your League’s Compliance & Regulatory Affairs Team:
800.768.3344 ext. 610 • 434.237.5068 (fax) • [email protected] • www.vacul.org
COMPLIANCE OPERATIONS MANUAL
PUBLICATION NUMBER 285
Schedule of Forms and Reports
The following is a listing and description of various forms and reports that credit unions are required to
complete and file, and the date by which these forms are due. If you are filing electronically, in most cases
you have an additional 30 days from the date the forms are due to the IRS.
Online filing of Forms W-2/W-2c and W-3/ W-3c. You may file Forms W-2 and W-3 electronically by visiting SSA’s website at www.socialsecurity.gov/employer, and selecting “Business Services Online (BSO).”
There is also a tutorial available at www.socialsecurity.gov/bso/bsowelcome.html and click on tutorial.
If you e-file, do not file the same returns using paper forms
Form
4501
W-2
W-3
W-4
940
941
945
1096
Due Date
10 Days after election of officials or
within 30 days of any change
January 31, 2014 (To Employee)
February 28, 2014 (To SSA)
March 31, 2014 (To SSA Electronic)
February 28, 2014 (Paper Forms)
March 31, 2014 (To SSA Electronic)
February 15, 2014
Description
Report of Officials
Wage and Tax Statement
Transmittal of Income and Tax Statements
(Summary of W-2 and W-2P)
Employees Withholding Allowance Certification (Ask for new W-4 for exempt employees)
January 31, 2014 - However, if you
deposited all of your FUTA tax when it
Employees Annual Federal Unemployment
was due, you have 10 additional calendar (FUTA) Tax Return
days (February 10, 2014)
Quarterly 1/31, 4/30, 7/31, 10/31 2014
Employers Quarterly Tax Return
Previous Year W-4 has expired. Begin withJanuary 31, 2014 If you made deposits on
holding for any employee who previously
time in full payment of the taxes for the
claimed exemption from withholding but
year, you may file the return by February
has not submitted a new W-4 for the cur10, 2014
rent year
Annual Summary and Transmittal of U.S.
February 28, 2014
Information Returns
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PAGE 5
Need further assistance? Contact your League’s Compliance & Regulatory Affairs Team:
800.768.3344 ext. 610 • 434.237.5068 (fax) • [email protected] • www.vacul.org
COMPLIANCE OPERATIONS MANUAL
1098
1098-E
1099-INT
1099-C
PUBLICATION NUMBER 285
January 31, 2014 (To Borrower)
February 28, 2014 (To IRS)
March 31, 2014 (To IRS Electronic)
January 31, 2014 (To Recipient)
February 28, 2014 (To IRS)
March 31, 2014 (To IRS Electronic)
January 31, 2014 (To Borrower - copy B)
February 28, 2014 (To IRS - copy A)
March 31, 2014 (To IRS Electronic)
January 31, 2014 (To Borrower)
February 28, 2014 (To IRS)
March 31, 2014 (To IRS Electronic)
Mortgage Interest Statement
Student Loan Interest Statement
Statement for Recipients of Interest Income
Cancellation of Debt
Reminder: Employers can choose to file Forms 941 instead of Form 944. If you previously were notified to file Form 944, Employer’s Annual Federal Tax Return, but want to file quarterly Forms 941 to
report your social security, Medicare and withheld federal income taxes, you must first contact the IRS to
request to file Forms 941, rather than Form 944. See Rev. Proc. 2009-51, 2009-45 I.R.B. 625, for the procedures for employers who previously were notified to file Form 944 to request to file Forms 941 instead.
Information is available at www.irs.gov/irb/2009-45_IRB/ar12.html
Contact Compliance and Regulatory Affairs at 800-768-3344 ext. 610 or
[email protected] if you have any additional questions or need more information.
PAGE 6
Need further assistance? Contact your League’s Compliance & Regulatory Affairs Team:
800.768.3344 ext. 610 • 434.237.5068 (fax) • [email protected] • www.vacul.org