2025 Form 1099-MISC and 1099-NEC

 

Excess golden parachute payments are no longer reported on Form 1099-MISC, box 14. You can now report these payments on Form 1099-NEC, box 3.

 

Form 1099-MISC

Box 14 was removed from the 1099-MISC form.

 

Form 1099-NEC

Box 3 was added to the 1099-NEC form.

 

For more information, see Excess Golden Parachute Payment section of the Instructions for Forms 1099-MISC and 1099-NEC: https://www.irs.gov/instructions/i1099mec#en_US_2025_publink1000133595

2026 Social Security Wage Base

The Social Security (Old-Age, Survivors, and Disability Insurance) taxable wage base increases from $176,100 to $184,500 for 2026. For more information, see The 2026 Cost-of-Living Adjustment (COLA) Fact Sheet: 2026 Cost-of-Living Adjustment (COLA) Fact Sheet | News | SSA

W-2 Box 12 Code Descriptions

 

The updates for the W-2 Box 12 code descriptions are effective for the 2025 tax year:

• Code F now includes Roth SEP IRA elective deferrals.

• Code S now includes Roth SIMPLE IRA salary reduction contributions.

 

For more information, see the 2025 General Instructions for Forms W-2 and W-3: 2025 General Instructions for Forms W-2 and W-3

 

Colorado 2026 Tax Updates

The updates for Colorado are effective January 1, 2026:

Step 2a

Deduction amounts (if Form DR 0004 is not submitted, or DR 0004 Line 2 is blank) increases:

• Married filing jointly or qualifying surviving spouse: from $10,000 to $11,000.

• Other filing statuses: from $5,000 to $5,500.

Added guidance

• Step 5 says, “Do not adjust Colorado withholding outside of this calculation. An employee must use form DR 0004 if they want to account for federal deductions because they may have limits and required addbacks.”

• Overtime pay is part of taxable wages in Step 1a.

 

 

For additional details, see the 2026 Colorado Withholding Worksheet for Employers: DR 1098 Colorado Income Tax Withholding Worksheet for Employers

Iowa 2026 Tax Updates

The update for Iowa effective January 1, 2026 is the deduction amounts increase across all filing statuses.

 

Iowa Withholding Formula for Wages Paid Beginning January 1, 2026

• Step 1: Determine T1

T1 = G – D

(G: Gross taxable wages for the pay period; D: Deduction for the pay period)

• • Step 1A: For employees who have filed a 2024 or a later year’s IA W-4

• • Step 1B: For employees whose most recent IA W-4 on file is from 2023 or earlier

Use the amount from column (A) if the employee has checked "Single (or married but legally separated)" as their marital status on the 2023 or earlier IA W-4, or if the employee’s marital status is missing. Use the amount from column (B) if the employee has checked "Married" as their marital status on the 2023 or earlier IA W-4.

• Step 2: Determine T2

T2 = T1 x 3.80% (or 0.038)

• Step 3: Determine T3

  • Step 3A:

T3 = T2 – (W/P)

(W: Total allowance amount reported on the employee’s W-4; P: Number of pay periods per year)

• • Step 3B:

T3 = T2 – (W/P)

(W: Determine the total allowance amount (W) by multiplying the number of allowances claimed by the employee on the IA W-4 by $40. For example, if an employee claims 6 total allowances, the employer should use $240 (i.e., 6 x $40) as the total allowance amount; P: Number of pay periods per year)

• Step 4: Determine T4, or Withholding Amount per Pay Period

T4 = T3 + A

(A: Additional withholding requested per pay period on the IA W-4)

For more information, see the Iowa Withholding Tax Information: Iowa Withholding Tax Information | Department of Revenue

 

Kentucky 2026 Tax Updates

The updates for Kentucky are effective January 1, 2026: 

• The standard deduction increases from $3,270 to $3,360.

• The flat income tax rate decreases from 4% to 3.5% of taxable income.

For more information, see the 2026 Kentucky Withholding Tax Formula: 2026 Withholding Formula.pdf

Maine 2026 Tax Updates

The updates for Maine are effective January 1, 2026: 

• The value of a state allowance increases from $5,150 to $5,300.

• The maximum standard deduction increases:

  • Single employees: from $12,150 to $12,450 

  • Married employees: from $27,150 to $27,750 

• The standard deduction decreases according to a formula:

  • Single employees who earn more than $102,250 annually (up from $100,000).

  • Married employees who earn more than $204,550 annually (up from $200,050).

• The deduction reaches zero when:

  • Single employees earn at least $177,250 annually (up from $175,000)

  • Married employee earn at least $354,550 annually (up from $350,050).

• The tax brackets used in the percentage method have been adjusted.

For more information, see the MRS Withholding Tables for Individual Income Tax: https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/23_wh_tab_instr.pdf. 

 

Maryland 2025 Tax Updates

The Maryland Employer Withholding Guide was updated following the Budget Reconciliation and Financing Act of 2025.

• The standard deduction is now $3,350, replacing the previous 15% of gross income calculation with a minimum of $1,850 and a maximum of $2,800.

• The tax tables now include two additional top withholding tax brackets.

• A new rate bracket of 3.30% has been introduced.

• The withholding rate for Maryland resident employees who work in Delaware increases from 3.20% to 3.30%.

• Supplemental income tax rates have increased.

  • For lump sum distribution of annual bonus, the withholding amount should be calculated at the highest State tax rate (6.50%), and the highest local tax rate for the county of residence.

Percentage Tax Tables/Formula

Formula

Total wages (before any deductions) – Allowance for Standard Deduction ($3,350) – Value of exemptions (number of exemptions times the allowable amount for one exemption as shown for the applicable payroll period) = Taxable Income

 

Percentage method of withholding for:

 

Maryland Resident Employees Who Work in Delaware

Lump Sum Distribution of Annual Bonus: The amount to be withheld is 3.30%.

This table includes Maryland state and local income taxes minus the credit for Delaware income tax.

 

 

The following brackets will be used for local income tax rates: 2.25%, 2.40%, 2.65%, 2.75%, 3.00%, 3.05%, 3.10%, 3.20% and 3.30%.

 

2.25% Local Income Tax

Lump Sum Distribution of Annual Bonus: The amount to be withheld is 8.75%.

 

2.40% Local Income Tax

Lump Sum Distribution of Annual Bonus: The amount to be withheld is 8.90%.

 

2.65% Local Income Tax

Lump Sum Distribution of Annual Bonus: The amount to be withheld is 9.15%.

 

2.75% Local Income Tax

Lump Sum Distribution of Annual Bonus: The amount to be withheld is 9.25%.

 

2.85% Local Income Tax

Lump Sum Distribution of Annual Bonus: The amount to be withheld is 9.35%.

3.00% Local Income Tax

Lump Sum Distribution of Annual Bonus: The amount to be withheld is 9.50%.

 

3.05% Local Income Tax

Lump Sum Distribution of Annual Bonus: The amount to be withheld is 9.55%.

 

3.10% Local Income Tax

Lump Sum Distribution of Annual Bonus: The amount to be withheld is 9.60%.

 

3.20% Local Income Tax

Lump Sum Distribution of Annual Bonus: The amount to be withheld is 9.70%.

 

3.30% Local Income Tax

Lump Sum Distribution of Annual Bonus: The amount to be withheld is 9.80%.

Dorchester County’s local tax rate increases from 3.20% to 3.30%.

 

For more information, see:

• Maryland Employer Withholding Guide: 2025 Maryland Employer Withholding Guide

• Maryland Withholding Tax Facts: Maryland Withholding Tax Facts January 2025 - December 2025

Ohio 2025 Tax Updates

The updates for Ohio are effective October 1, 2025:

• The number of withholding brackets is reduced from six to three.

• The new tax rates are 1.775%, 2.99%, and 3.64% (replacing the prior range of 0.501% to 3.8%).

For more information, see the Employer Withholding Taxes: Optional Computer Formula: WHT_OptionalComputerFormula_2025.pdf

Defect 2529860: When you attempted to preview or print invoices in Interactive Billing or Batch Billing with the Allow Report to be Uploaded via SFTP option enabled, the following error message displayed: “Permission Denied”.

Defect 2543055: Snapshots for dashparts were not generated, because scheduled jobs created in previous periods failed to produce snapshots for the current period, which resulted in degraded dashboard performance.

Defect 2547967: When you modified the Total Tax Amount and submitted the expense report, the change was not saved, resulting in the Total Tax Amount displaying as 0. This issue occurred when the expense report included different expense categories that shared the same tax code, but at least one of the categories did not allow editing of the tax code or amount.

Defect 2538041: When you selected the Unit Base option in Cost Distribution within Purchase Order Line Detail and entered a quantity with a decimal, the application displayed an error message upon submitting the purchase order. This also occurred when multiple lines were included in the override.

Defect 2532069: When you used the > Not Equals operator in Search, empty fields were incorrectly excluded from the results.

Defect 2534473: When you used the Contains operator for the Alias field in either the Firm, Vendor, or Client search, the results included all records with an alias instead of only those that matched.

Defect 2545258: When you enabled the Find words that sound the same when performing searches option in My Preferences, and then ran a saved search, Vantagepoint did not filter the search results to display words that sound the same.

Defect 2531320: When the Allow Cash Receipts for Other Companies option was selected for your security role and the Restrict Charge Companies option was selected at the project's lowest WBS level, you were unable to select a phase or task for a project row on the Cash Receipts form.

Defect 2548803: When there were duplicate copies of the same process server job running, it caused a deadlock so that other jobs were stuck in a "waiting" status.

Defect 2539433: When you exported the Transaction Grid in Transaction Center > GL Account Review with more than 500 records, the export process queue failed and displayed the error message "Specified cast is not valid."