1st January 2025 Tax Update Bulletin

This bulletin describes the changes included in the January 2025 Sage 50 Payroll Solutions Update for Sage 50 Accounting, Release 2024. 

Federal Tax Changes

Federal Income Tax Withholding 

Important: The 1st January 2025 payroll tax update includes draft changes for the FIT withholding. Finalized changes will be included in the 2nd January 2025 payroll tax update anticipated for release in mid-January. Note, the new filing statuses introduced as a result of the revised W-4 Form for 2020 and the prior statuses exist for those employees using 2019 and prior revision of the form. For more information, see:

Payroll tax year 2020 W-4s

Social Security Wage Base

The 2025 social security wage base increased to $176,100.

State and Local Tax Changes 

California Disability Insurance
Withholding tax rate changed.

California State Income Tax
Standard deduction and withholding table changes.

Colorado Family and Medical Leave Insurance
Taxable wage limit based on the annual Social Security limit changed.

Colorado State Income Tax
Withholding tax changes for employees using DR_0004.

Connecticut Paid Family Leave
Taxable wage limit based on the annual Social Security limit changed.

Delaware Paid Family and Medical Leave
New – Contributions begin January 2025.
Click here for setup information

Hawaii State Income Tax
Withholding allowances and withholding table changes.

Hawaii Temporary Disability Insurance
The annual wage limit changed.

Iowa State Income Tax
Withholding tables and withholding formula changes. The Iowa withholding formula and the IA W-4 have been revised for the tax year 2025 to accommodate changes to individual income tax required under Iowa Senate File 2442.
Click here for setup information

Kentucky State Income Tax
Standard deduction and tax rate changes.

Massachusetts Paid Family and Medical Leave
Taxable wage limit based on the annual Social Security limit changed.

Massachusetts State Income Tax
Annual high threshold amount changed.

Maine Paid Family and Medical Leave
New – Contributions begin January 2025.
Click here for setup information

Maine State Income Tax
Withholding Table and Standard deduction changes.

Michigan State Income Tax
Tax rate and Personal exemption changes.

Minnesota State Income Tax
Allowance and withholding table changes.

Mississippi State Income Tax
Withholding Tax Rate Change.

Missouri State Income Tax
Withholding Table and Standard deduction changes.

Nebraska State Income Tax
Withholding Table and Allowance updates.

New Jersey State Disability Insurance
Taxable wage base and rate changes.

New Jersey Family Leave Insurance
Taxable wage base and rate changes.

New Mexico State Income Tax
Withholding Table changes.

Oregon Paid Family Leave
Taxable wage limit based on the annual Social Security limit changed.

Rhode Island State Income Tax
Withholding Table and exemption amount updates.

South Carolina State Income Tax
Withholding Table and allowance updates.

Washington Paid Family Leave
Taxable wage base and rate changes.

West Virginia State Income Tax
Withholding Table updates.

2025 State Unemployment Wage Limits 

The following state unemployment wage limits apply for the tax year 2025. For details on how to apply the limits for your state, review the following articles in the Year-End Center.  
How to automatically update your user-maintained payroll taxes and benefits for the new year using the Update Wizard 

Bold and Red  indicates the Wage Base Limit changed in the January 2025 tax update. 

Tax Forms  
  

Payroll Tax Forms: The payroll tax forms were updated within the Payroll Tax Form Selector window on or after December 20, 2024. To receive an update, select a Federal or State form and click Next.  If there’s an update, the next window to appear will have an option to automatically update your forms.  It’s recommended that you take all forms updates. 
 
NOTE: The payroll forms update also updates the forms lists that appear in the Payroll Tax Form Selector window. If you’re trying to run a year-end 2024 form such as W-2’s, 940/943/945 but only see the 2023 forms listed then: 

• Select the 2023 form that you want and click OK.  
• If you have a current Sage 50 subscription, the next window will prompt you to update your forms. 
• After taking the forms update, you’ll see the 2024 year-end forms listed in the Payroll Tax Form Selector window. 

Special Note: The forms provided by Sage 50 are approved by the taxing authorities.  A few states haven’t yet approved their forms.  Any form that can be printed and mailed and is awaiting approval, will print with the banner “Record Copy Do Not File”.  We’ll be removing the “Record Copy” as the taxing agencies approve the forms.  There will be periodic online updates for these forms via the Automatic Update feature in the Payroll Tax form.  

W-2 and 1099 Tax Forms Instructions:  

Click this link for 1099 Forms Instructions 

  
Click this link for W-2 Forms Instructions 

Making Sure That Your Tax Update is Applied 

The version for this tax update is 20250101 for release 2024. Follow these steps to make sure that your tax update was applied: 

For Release 2024: 

1.     Open your Sage 50 company. 

2.     Select Help > About Sage 50 Accounting. 

3.     Confirm that the Installed Tax Update version number matches the version number listed above. 

Getting Help and Customer Support  
 

Help within your Sage 50 application is a great source of information.  Help can be accessed from a Sage 50 window by clicking the Help button in the toolbar or pressing the F1 key while on a field. 

In addition to Help, you can access Support or the Sage 50 Accounting User Community by going to https://communityhub.sage.com/us/sage50_us. 

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