President’s 2018 budget contains some payroll-related items

The President has submitted the 2018 budget proposal. The payroll-related items are highlighted below.

Earned income and child tax credits

The provision would require a social security number (SSN) that is valid for work in order to claim the earned income tax credit (EITC) or the child tax credit (CTC). For both credits, the requirement would apply to taxpayers, spouses, and all qualifying children. Under current law, households who do not have SSNs that are valid for work, including illegal immigrants who use individual taxpayer identification numbers (ITINs), can claim the CTC, including the refundable portion. This proposal would ensure that only individuals who are authorized to work in the U.S. could claim these credits.

Paid parental leave plan

There would be six weeks of paid family leave to new mothers and fathers, including adoptive parents. It would be achieved by using the unemployment insurance (UI) system as a base. The proposal would allow states to establish paid parental leave programs in a way that is most appropriate for their workforce and economy. States would be required to provide six weeks of parental leave and the proposal gives States broad latitude to design and finance the program. The proposal is fully offset by a package of sensible reforms to the UI system-including reforms to reduce improper payments, help unemployed workers find jobs more quickly, and encourage states to maintain reserves in their unemployment trust fund accounts.

Child support enhancements

The budget would increase child support collections, which would result in savings to other federal benefits programs. For example, by requiring additional data matches and reporting throughout child support establishment and enforcement processes, the proposal would expand and improve the ability to intercept sources of income for payment of child support, including insurance settlements, lump-sum payments provided by employers, gaming winnings from casinos, and state workers’ compensation claims.
Enforcement procedures related to freezing and seizing certain assets held by delinquent non-custodial parents would be improved and would require the reporting of independent contractors to state directories used to locate non-custodial parents and identify sources of income.
The proposal would also provide states with access to better financial data matching programs, as well as tools that promote interstate cooperation. In addition, the proposal to create a Child Support Technology Fund would facilitate the replacement of aging IT systems in state child support programs, and increase security, efficiency, and program integrity. States would have the option to acquire a model child support system and various applications. This approach would reduce inefficiencies associated with the current process of modernizing child support IT systems, which involves each State separately designing, developing, and implementing a new system. The federal government would share these costs through 66% reimbursement.

Electronic Visa Update System (EVUS)

The Administration proposes to establish a user fee for EVUS, a new U.S. Customs and Border Protection (CBP) program to collect biographic and travel- related information from certain non-immigrant visa holders prior to traveling to the United States. This process will complement existing visa application processes and enhance CBP’s ability to make pre-travel admissibility and risk determinations. CBP proposes to establish a user fee to fund the costs of establishing, providing, and administering the system.

Mandatory E-Verify

The budget assumes that United States Citizen and Immigration Services (USCIS) will continue to be funded primarily through fees on the applications and petitions it handles. Within USCIS’ appropriated funding, Operations and Support funds necessary operations, mission support, and associated management and administration costs for the E-Verify program and in 2018 to begin the implementation of a mandatory E-Verify program.

Fees authorization for immigrant employment

The budget proposes authorizing legislation to establish and retain fees to cover the costs of operating the foreign labor certification programs, which ensure that employers proposing to bring in immigrant workers have checked to ensure that American workers cannot meet their needs and that immigrant workers are being compensated appropriately and not disadvantaging American workers. The ability to charge fees for these programs would give the Department of Labor (DOL) a more reliable, workload-based source of funding for this function (as the Department of Homeland Security has), and would ultimately eliminate the need for discretionary appropriations. The proposal includes the following: 1) charge employer fees for its prevailing wage determinations; 2) charge employer fees for its permanent labor certification program; 3) charge employer fees for H-2B non-agricultural workers; and 4) retain and adjust the H-2A agricultural worker application fees currently deposited into the General Fund. The fee levels, including possible expedited processing fees, would be set via regulation to ensure that the amounts are subject to review. Given the DOL Office of Inspector General’s (OIG) important role in investigating fraud and abuse, the proposal also includes a mechanism to provide funding for OIG’s work to oversee foreign labor certification programs.

Taxes and health care reform

The budget did not contain exact details of the tax provisions. However, the proposal suggests lowering individual income tax rates and expanding (increasing) the standard deduction to help families struggling with child and dependent care expenses. The budget assumes the repeal and replacement of Obamacare.

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