The purpose of this article is to apprise you of pending changes from tax authorities, such as new tax jurisdictions, agency updates, rate changes, and more.  To keep you informed of ongoing tax compliance measures we are providing the following details regarding upcoming/ongoing changes. 

• NEW and/or ACTION REQUIRED: The items highlighted below require additional attention.

Federal and State Tax Updates:

• *NEW* - Federal
  • Changes for Tipped EE's for tax year 2026: The IRS now requires employers to report qualified voluntary tips on the W-2 using Box 12 Code TP as well as assigning a Treasury Tipped Occupational Code (TTOC) to all tipped EEs.
  • Clients with tip earnings codes have been contacted regarding the setup process for the TTOC and box 12 designations.
• Florida Unemployment
  • The state is implementing a new system for reporting UI Tax.  Employdrive is working with the agency to ensure a smooth transition to the new service which is scheduled to go live for the Fall of 2026.
• Georgia Unemployment
  • The state is updating its system for reporting UI Tax.  Employdrive is working with the agency to ensure a smooth transition to the new service which is scheduled to go live for 4Q26.
• *NEW* Georgia Withholding
  • The state has decreased the Withholding tax rate from 5.19% to 4.99%.
  • The state has increased the dependent allowance from $4,000.00 to $5,000.00,
  • The state has increased the standard deduction from $12,000.00 to $15,000.00 for the following filing statuses:
    • Single
    • Married filing Separately or Married Joint both Spouses Working
    • Head of Household
  • The state has increased the standard deduction from $24,000.00 to $30,000.00 for the following filing status:
    • Married filing jointly
  • The above changes are retroactive to 1/1/26.  Any EE's who have been impacted by this change may adjust their withholding for the balance of the year by completing a new GA G-4 form or receive a refund when filing their individual income tax return at the close of the year.
• Kentucky Unemployment
  • The state is implementing a new system for reporting UI Tax.  Employdrive is working with the agency to ensure a smooth transition to the new service which is scheduled to go live on August 17th 2026.
  • ACTION REQUIRED: The Agency has issued new KY Employer Identification Numbers to all active accounts.  Please forward this information to taxes@employdrive.com and active your account to authorize Employdrive as your TPA.  Click here for additional information.
• Kentucky Withholding
  • MyTaxes, the KY WH portal, will be unavailable from August 5th thru 13th of 2026 while the agency updates the system.
• *NEW* - Maryland Withholding
  • Some Payment and Filing options will not be available from July 29th to August 31st while the agency completes the transition to Maryland Tax Connect.
  • Employdrive's regular reporting and remittance will not be impacted by this change but amended returns may take additional time to process.
• *NEW* - Maryland Paid Leave
  • Maryland Paid Leave contributions will commence 1/1/2027, in anticipation of this change Employers with EE's working in Maryland should register for a Paid Leave Account and review the EE Notice requirements.
  • Employdrive will be releasing additional information in the coming months in preparation for the new program.  Visit Maryland FAMLI for more information.
• *NEW* - Massachusetts Paid Leave
  • The state has passed legislation to shift ER contributions from Medical Leave to Family Leave effective 1/1/27.  This change in structure was designed to mitigate the impact of recent IRS guidance on the tax treatment of PFML benefits.  Additional information will be released to clients impacted by the change in 4Q26.
• *NEW* - Michigan Unemployment
  • The Michigan Unemployment Insurance Agency (UIA) is transitioning to a new unemployment tax and benefits system called MiUI, which will replace the current Michigan Web Account Manager (MiWAM). MiUI is being launched in two parts, with Tax functions now live, and Benefits functions scheduled to be available later in 2026.
  • ACTION REQUIRED: If you have not assigned Employdrive as your TPA please do so as soon as possible or email taxes@employdrive.com for assistance.
• *NEW* - Minnesota Paid Leave
  • Taxability for the following alternate compensation types has been changed from taxable to exempt effective 1/1/26:
    • Group Term Life Over $50K
    • 409A Distribution
    • 3rd Party STD 125 Plan
  • Taxability for the following alternate compensation types has been changed from exempt to taxable effective 1/1/26:
    • Adoption Assistance
    • Van Pool & Transit Passes
    • Qualified Parking
    • Meals for Convenience of ER
    • Clergy Housing Allowance
  • The above changes are retroactive to 1/1/26; any EE's who have been impacted by this change may adjust their withholding for the balance of the year by completing a new MO W-4 form.  
• Nevada Unemployment
  • The state is updating the UI electronic reporting system to improve security.
  • ACTION REQUIRED: If you currently have credentials to log into your NV UI account, please log into to your account and update your authentication methods to ensure uninterrupted access to your account.
• *NEW* - Ohio Withholding
  • The state has updated the OH withholding tables for payrolls on or after 8/1/26.
  • Any EE's who have been impacted by this change may adjust their withholding for the balance of the year by completing a new OH IT-4 form.
• Texas Unemployment
  • The state is implementing a new UI electronic reporting system.  Employdrive will be reaching out to all impacted clients in 3Q26 with information regarding creating your Employer account and designating Employdrive as your TPA.
• Vermont Unemployment
  • The state is implementing a new system for reporting UI Tax and is currently in the testing phase.  The new system is currently only available for claimants but employer and TPA access is anticipated to be added in the Summer of 2026.  We will provide updates on the progress of the transition as they become available.
• Virginia Unemployment:
  • The state is updating the UI electronic reporting system to improve security.
  • ACTION REQUIRED: Please visit the website to create/update to the ID.me access method to ensure uninterrupted access to your account.
• Wisconsin Unemployment
  • The state is implementing a new UI electronic reporting system.  Employdrive will be reaching out to all impacted clients in 3Q26 with information regarding creating your Employer account and designating Employdrive as your TPA.

Local Tax Updates:

• *NEW* Alabama
  • City of Birmingham
    • The city has mandated all reports and remittances be electronic effective 7/1/26.  Employdrive is currently in compliance with this mandate.
• *NEW* Pennsylvania
  • Collingdale Boro, Delaware County
    • Added a resident and non-resident tax rate of 1%, effective 7/1/26.
    • All clients with EE’s impacted by this change have been notified individually.
  • Springfield Township, Delaware County
    • Added a resident and non-resident tax rate of 1%, effective 7/1/26.
    • All clients with EE’s impacted by this change have been notified individually.