Search This Blog

Wednesday, July 31, 2019

Audit Season

Have you recently been selected for a State Fund audit on your workers compensation policy?  State Fund conducts mandatory premium audits on all new policies after the first year of coverage.  After that, they randomly select roughly 25% of policies each year for an audit.  

If you have questions on a premium audit, we're happy to assist, even if we don't process your payroll regularly.  We can review your records ahead of time so there's no surprises and then handle the audit from our office so that you don't have to deal with the stress. So don't panic when you get correspondence in the mail with that dirty little word and don't hesitate to ask us for help. 

Here's some information from Montana State Fund related to premium audits:

Why a Premium Audit?  
The purpose of an audit is to ensure you pay fair and accurate premium for your business operations during the policy period. When you purchased your policy, premium was estimated based upon the type of work and the anticipated payroll you expected to have. A premium audit is conducted at the end of the policy period to obtain the actual business operations and records to determine your final premium. The result - whether a return in premium, additional premium due, or no change to your premium - is your assurance that you paid the correct amount.

Types of Audit
There are two types of audits. An on-site audit, also known as a physical or field audit, involves a visit to your business location by our representative to review your operations and records. A phone audit involves a review of operations and records over the phone. In both cases, you will be notified in advance to arrange the audit appointment. During the process it is essential to have someone familiar with your overall operations present to answer the auditor’s questions and/or complete any necessary forms. You may have the audit performed with your accountant or other third party, however they must be familiar with your operations, staff duties and be able to accurately answer the auditor’s questions.

Are you hiring independent contractors?
If you enter into an agreement with others to perform duties for you, you are required to maintain and provide the auditor access to the following records for each of them: 

  • A certificate of workers’ compensation coverage 
  • An Independent Contractor Exemption Certificate (ICEC) issued by the Montana Department of Labor and Industry.
If you do not have documentation confirming others you paid to perform duties lawfully secured their workers’ compensation obligations, any payments made to these workers may be treated as wages when calculating your policy premium.  

To obtain additional information regarding Independent Contractors and your responsibilities as the hiring agent, go to: or contact the Montana Department of Labor and Industry (DLI) at 406-444-9029. The web site contains search options to assist you with confirming current workers’ compensation insurance coverage and/or ICEC status.

Tuesday, July 23, 2019

Independent Contractor Exemption Certificate (ICEC) – Frequently Asked Questions

Montana Workers’ Compensation Laws for Independent Contractors from the Department of Labor & Industry

What are Montana’s workers’ compensation laws for independent contractors?
The law requires independent contractors to obtain either an independent contractor exemption certificate or self-elected coverage under a Montana workers’ compensation insurance policy. Refer to MCA, 39-71-417.

What is the purpose of an independent contractor exemption certificate?
It allows an independent contractor to waive all their rights and benefits that would otherwise be provided by a workers’ compensation insurance policy. If an independent contractor were to suffer a work-related injury or occupational disease while performing the occupations specified on the certificate, they would not be eligible for workers’ compensation benefits. The certificate concludes the person’s status is conclusively presumed to be that of an independent contractor. Refer to MCA, 39-71-417(7).

What is the purpose of self-elected workers’ compensation insurance coverage?
Self-elected workers' compensation insurance coverage provides wage-loss and medical benefits to an independent contractor should a work-related injury or occupational disease occur.

What is the risk of hiring an independent contractor without an independent contractor exemption certificate or self-elected workers’ compensation insurance coverage?
It would result in the state treating the independent contractor as an employee of the hiring agent. This means the hiring agent may be responsible for claims related to work-related injuries or occupational diseases and incur penalties from the Uninsured Employers’ Fund. Labor agreements and issuance of 1099s do not make a person an independent contractor.

Are there penalties for making a person obtain an independent contractor exemption certificate?
Yes. Montana law prohibits employers from avoiding their responsibility to provide workers' compensation insurance coverage for employees. An employer may not require an employee through coercion, misrepresentation, or fraudulent means to adopt independent contractor status or exert control to a degree that destroys the independent contractor relationship. An employer who violates a provision of the law is subject to a fine to be assessed by the department of up to $1,000 for each violation. Refer to MCA, 39-71-419(2).

Wednesday, July 10, 2019

Form 2290 Heavy Vehicle Highway Use Tax Return

If you have a vehicle with a GVW of 55,000 lbs or more that will be used on public roads and/or is otherwise required to be licensed, then you must annually file Form 2290 Heavy Vehicle Highway Use Tax with the IRS. If your vehicle will travel less than 5,000 miles for commercial purposes or less than 7,500 miles for agricultural purposes, you are exempt from the tax but still must file Form 2290 each year. Federal regulations require all states to verify payment of, or exemption from, the tax before issuing or renewing vehicle registrations. Before a vehicle is registered, the owner must provide proof this tax has been paid. This is done at the time of licensing at the county or in MCS when registering under the IRP. The reporting period is July 1—June 30 and returns are due annually by August 31.

Filing is now open for the July 1, 2019 - June 30, 2020 period and Gardner & Billing CPAs are here to help! We can prepare your return for either paper or electronic filing.

Tuesday, July 2, 2019

Happy 4th of July!

Happy Powder River County Centennial Week! Wishing you all a safe and spectacular 4th of July celebration! Our office will be closed on Thursday and Friday this week and will reopen with regular summer hours on Monday, July 8th.