What's New in 2023 | Small Business Updates and Deadlines
We hope you had a wonderful and restful holiday season. The start of the year is a very busy time, with fourth quarter reports, tax reports, rate changes, and small business updates. Here's a summary of what's new and what's due for Washington state and Bellingham businesses.
*Please note that all businesses are different and you may have other deadlines and updates that apply to you. If you have questions related to your business or industry, you should contact your accountant, bookkeeper, payroll processor, or HR person.
2023 Rate Increase
Minimum Wage Increase
Washington state's minimum wage has increased to $15.74, up from $14.49 in 2022. If you have employees that are paid minimum wage, you must adjust their hourly pay rate starting January 1, 2023. Learn more on the L&I website.
Paid Leave Premium Rate Increase
The premium rate for Paid Leave has increased to 0.8%, up from 0.6% in 2022. You will need to update your calculations to withhold the new 0.8% starting January 1, 2023. Learn more on the ESD website.
Workers' Compensation Rate Increase
The Department of Labor & Industries (L&I) increased the average price employers and workers pay for workers' compensation insurance by 4.8% in 2023. This increase means that employers and workers will pay an additional $61 a year, on average, for each full-time employee. Learn more on the L&I website.
Mileage Rate Increase
The IRS has increased the standard mileage rate for business use of car to 65.5 cents per mile driven, up 3 cents from the midyear increase for the second half of 2022. Learn more on the IRS website.
Fourth Quarter Reporting Updates
Unemployment Insurance (UI): Upgrade to the latest version of EAMS
Before filing fourth-quarter tax reports, due January 31, 2023, employers need to upgrade to the newest version of the Employment Account Management Services (EAMS) system. You will receive an upgrade alert when logging in to your account once you’re eligible. Learn more on the ESD website.
Report Standard Occupational Classification (SOC) codes
SOC is a federal coding system that helps government agencies and private businesses compare occupational data. All employers are now required to report SOC codes when they submit quarterly tax reports, starting with the fourth quarter 2022 report due on January 31, 2023. Learn more on the ESD website.
New Requirements for Job Descriptions
Starting January 1, 2023, employers with 15 or more employees must include certain information in their job postings including:
A wage scale or salary range that extends from lowest to highest pay
A general description of all the benefitshttp://www.lni.wa.gov/equalpay including health care benefits, retirement benefits, and paid time off
Info about other compensation including bonuses, commissions, profit-sharing, and stock options
Learn more on the L&I website.
Retirement Plan Limit Increase
The IRS has increased the contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan to $22,500, up from $20,500 in 2022. Learn more on the IRS website.
In addition to all the changes for the new year, there are many deadlines that business owners and employers need to watch out for this month. Here is a brief overview of some common deadlines that may apply to you:
January 17, 2023
Quarterly Estimated Tax Payments for Q4— IRS
January 25, 2023
Monthly DOR Filers: Excise Tax Return — DOR
January 31, 2023
Employer's Quarterly Federal Tax Return (Form 941) for Q4 or Employer’s Annual Federal Tax Return (Form 944) for 2022 — IRS*
Employer’s Annual Federal Unemployment (FUTA) Tax Return (Form 940) for 2021 — IRS
Form W-2, Wage and Tax Statement — Provide to employees & IRS
Form 1099-NEC, Nonemployee Compensation and/or Form 1099-MISC, Miscellaneous Income — Provide to contractors & IRS
State Unemployment Insurance (SUI) Report and Payment for Q4 — ESD
L&I Report and Payment for Q4 — L&I
Quarterly DOR Filers: Excise Tax Return for Q4 — DOR
Quarterly City of Bellingham Filers: B&O Tax Return for Q4 — City of Bellingham
Monthly City of Bellingham Filers: B&O Tax Return — City of Bellingham
*Form 944 is only used by small employers who have been notified that they should file an annual return instead of a quarterly one (Form 941)
For more information, check out our blog post on reports and forms due January 31.