Stephanie Pfister October 8 th, 1:45 p.m. 3:15 p.m.
Asset Acquisitions Stock Acquisitions F Reorganization Statutory Merger Entity Conversion I.R.C. 338(h)(10)
Buyer purchases the assets of a target company (partial or total) Typically, the acquired employees will be immediately reported on the purchaser s payroll In the case of partial acquisitions, the target company continues to survive and report payroll For both partial and total acquisitions there is generally a movement of employees and related assets
Federal Successor qualification Carryover of YTD taxable wage bases Tax deposit compliance/reconciliation Payroll Systems Integration Forms W-2 reporting (standard vs alternative) Forms W-4 Forms 1099 Form 941 Schedule D
State Successor qualification Carryover of YTD taxable wage bases SUI experience transfers (optional or mandatory) Payroll Systems Integration State Employee Withholding Allowance Certificate State correspondence/notification Account closures
Buyer purchases the stock of a target company Typically, the acquired company remains alive and all employees will continue to be reported under the target company s payroll account numbers Generally no change in target company s business Generally no initial movement of employees from target company payroll to purchaser s payroll
Federal and State There are generally no tax considerations in stock deals as the employees of the acquired company will continue to be reported under the acquired company s federal/state ID numbers. No Forms W-2, W-4, and 1099 issues No SUI transfer of experience issues Potential Payroll Systems Integration Subsequent movement of employees
Typically involved when a corporation changes its name, the state where it does business, or makes changes to its corporate bylaws/charter Does not change the federal or state identification numbers of the entity No movement of employees No movement of assets
Also known as a Type A merger. It is a merger between two entities that is effected under the laws of the U.S., a state or territory or the District of Columbia. Statutes of foreign jurisdictions will also qualify as long as the statute operates in a similar manner to a domestic merger statute. Post merger, one company continues to exist while other ceases to exist Movement of employees and assets
Federal Successor qualification Carryover of YTD taxable wage bases Tax deposit compliance/reconciliation Payroll Systems Integration Successor must file one Forms W-2 for entire year Forms W-4 Successor must file one Forms 1099 for entire year Year-end notifications to IRS
State Successor qualification Carryover of YTD taxable wage bases SUI experience transfers (optional or mandatory) Payroll Systems Integration State Employee Withholding Allowance Certificate State correspondence/notification Account closure
Typically involves Corp to LLC conversion Apply to IRS to retain FEIN Many states require new SUI account numbers SUI registrations must be closely monitored and reviewed Ensure SUI rates are carried over Agencies will help with SUI account transition Name change required for SIT purposes
Jointly made election between purchaser and target company of a stock purchase The stock purchase is ignored for corporate tax purposes The target company is generally treated as having made a deemed sale of its assets and then liquidated
Federal/State Generally same considerations as that of an asset acquisition. SUI regulations/rules should be consulted as some states will consider the transaction a stock transaction
Are employees AND assets involved Are employees and assets transferring at the same time Related party transactions In some states, the employees are enough to establish common ownership/management Working with 3rd party payroll processors Local Tax compliance Forms W-4 Compliance
Thank you and please remember to complete your evaluation for this session.