In each issue of Compliance Corner, we discuss topics that the Greenshades Compliance team tracks and maintains. Here are several more that you may not be aware that Greenshades supports.
Note: The information provided is current as of September 30, 2025. Everything provided is for informational purposes only and does not constitute formal tax, legal, or compliance advice. Always consult with qualified tax advisors, legal counsel, and your organization’s internal teams for guidance specific to your situation. Additional regulations may apply. For the most accurate and up-to-date information, refer to official government resources and regulatory agencies.
In This Issue:
Compliance is not just assigned to one department. We are here for all of the departments that offer products to our many and varied clients.
EEO-1, Component 1
Private sector employers with over one hundred employees are required to file an annual EEO-1 Component 1 to the U.S. Equal Employment Opportunity Commission (EEOC). Some federal contractors with fifty or more employees must also submit workforce demographic data, in addition to private sector employers.
This report takes a snapshot of your employees within the specified period determined by the EEOC. The report groups data together by type of positions held; Male or Female; and Hispanic or Latino, White, Black/African American, Asian, Native Hawaiian/Other Pacific Islander, American Indian, or mixed race. The reporting window for Tax Year 2024 was open from May 20th to June 24th of 2025.
Local Income Taxes
Did you know that there are over 9,000 variations of local taxes? Pennsylvania alone has over 2,600 (Earned Income, both resident and non-resident rates, and Local Service Tax); Ohio has municipal and JEDX taxes, plus School Districts; Kentucky, Maryland, Michigan, Colorado, Alabama, Oregon, West Virginia, Delaware, Missouri, and New York.
We track the changes to the rates, add in new local tax jurisdictions, and monitor and update who are the assigned tax collectors. We review this information quarterly to identify changes and then provide a list of the jurisdictions with changes via email.
When changes occur, compliance provides information on the how and when they will affect the processes in place and the information detailing the changes in portals, specifications, security (MFA and captchas) must be researched and provided to implement on time and correctly.
The Office of Child Support Services (OCSS) announced several upcoming software changes and their release dates [OCSS, Release 25-02, April 2025]. The one of most interest to employers is an enhancement to the Debt Inquiry and Employer Reporting Portal applications,
which will speed up lump-sum reporting. The release date is set for July 2025.
Enhancements to applications
Both applications will be enhanced to allow states to directly respond to employers’ reported lump-sum matches on the Debt Inquiry application. Enhancements to the Debt Inquiry application will enable states to inform employers whether to release or withhold a lump-sum payment. If withholding is required, the state will provide the arrearage amount, the percentage to withhold from the lump-sum payment, along with additional comments or instructions. Further enhancements will allow employers to view the state responses and acknowledge the lump-sum match.
E-NMSM
The electronic National Medical Support Notice (e-NMSN) is an efficient and cost-effective way for child support agencies to exchange NMSNs with employer partners (employers, third-party providers, plan administrators, and unions).
The IRS has a webpage to assist in claiming these credits during the 2025 calendar year.
The Department of Homeland Security was sending case alerts to notify E-Verify employers when they have revoked an employee’s Employment Authorization Document (EAD). Now employers need to monitor the Status Change Report to follow-up on EADs that may have been revoked.
Employers must reverify the employee’s I-9 using Supplemental B based upon the case listed on the Status Change Report. Additional information can be found here.
It is recommended that you monitor Temporary Protected Status (TPS) designations, as many are being terminated that are identified to specific countries. You can monitor this information here. Those with expiring or terminated TPS must be reverified.
Effective January 1, 2026, Arkansas will start to require E-Verify for all new hires.
Currently, the following states require E-Verify:
For all employers: Alabama (April 2012), Arizona (January 2008), Mississippi (July 2011), Montana (July 2025), and South Carolina (April 2012)
For private employers: Georgia (July 2013 – 11+ employees)
For public employers: Colorado (2006), Idaho (2009), Indiana (2011), Michigan (2012), Oklahoma (2007), Virginia (2011), and West Virginia (2024).
Hybrid Version:
Florida (July 2023 – Private employers with 25+ employees and all public employers), Louisiana (January 2012 – Private employers contracting with a LA Public entity for physical services), Minnesota (2011 – state contracts), Missouri (2009 – public employers and state contracts), North Carolina (July 2013 – all public employers and Private employers with 25+ employees), Pennsylvania (Contractors 2020), Tennessee (January 2023 – all public employers and Private employers with 35+ employees, Texas (2015 – State agencies and higher education), and Utah (July 2010 – all public employers and Private employers with 15+ employees).
Note: If employees want to capture the savings during the current tax year, they will need to update their W-4, lines 3 and 4b. Go to this site for additional assistance.
The Treasury Department has provided the list of the qualifying tipped positions. These codes will be entered in box 14b on the 2026 W-2.
In order to claim the deduction, a worker must both be in an occupation on the list and receive qualified tips. IRS Newswire Issue #IR-2025-92 The proposed regulations provide a definition of qualified and not qualified tips which includes the following factors:
List of occupations that receive tips Treasury Tipped Occupation Code, provides a three-digit code and descriptions for the occupations listed within the proposed regulations. The proposed regulations group the occupations into eight categories:
26 CFR Part 1
[REG-110032-25]
RIN 1545-BR63
Employees who enter into a Tipped Employee Participation Agreement as part of the Tip Rate Determination Agreement (TRDA) program or a Model Gaming Employee Tip Reporting Agreement as part of the Gaming Industry Tip Compliance Agreement (GITCA) program agree to report tips to their employer at or above the tip rate established by their employer for their occupational category. In exchange for the employees’ voluntary agreement to report tips at this agreed upon rate, the IRS provides tip examination protection to the employees for the taxable years in which their agreements were in effect. The proposed regulations would clarify that “qualified tips” include tips reported pursuant to an agreement under the TRDA or GITCA program provided that the participating employee in the TRDA or GITCA program is otherwise eligible for the deduction under section 224, and reports tips using the tip rates established under their agreement. Additionally, the proposed regulations would clarify that an employee participating in the TRDA or GITCA program may report additional qualified tips to the IRS on the Form 4137.
Other Requirements
To prevent reclassification of income as qualified tips, and to prevent abuse of the deduction, the proposed regulations would also provide that a payment is not a qualified tip if the tip recipient has an ownership interest in or is employed by the payor of the tip.
The proposed regulations clarify that the term “qualified tips” does not include tips that were received while performing a service that is a felony or misdemeanor under applicable law.
For example, consider Employee C who works as a bartender but does not have the license or certification that is required based on the applicable laws, and these laws specify that serving alcohol without a license is a misdemeanor. Employee C receives $10,000 in tips during the year while serving alcohol at a bar. “Bartender” is on the List of Occupations that Receive Tips, but serving alcohol as a bartender without the proper license violates the applicable law. Because the proposed regulations clarify that the definition of “qualified tips” excludes tips received while performing services that violate the applicable law, Employee C is aware that the $10,000 in tips received while serving alcohol without a license are not qualified tips, and so Employee C does not claim the deduction for these tips
At Greenshades, compliance isn’t an afterthought—it’s built into everything we do. From year-end form updates to real-time payroll tax calculations and garnishment guidance, our team works across departments to ensure our platform stays aligned with evolving regulations. That means fewer surprises and more confidence for you and your team.
We’ll continue highlighting the changes that matter most and the ways our team is helping you stay prepared in our next Compliance Corner. Look for the next update in your quarterly newsletter—and if you haven’t already, make sure you're subscribed so you never miss an issue.