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  • May 10 / 2020
What's New

DOL Issues Temporary Regulations to Implement the FFCRA


The U.S. Department of Labor (DOL) released a temporary rule to implement the emergency paid sick leave and expanded family and medical leave requirements included in the Families First Coronavirus Response Act (FFCRA) [85 F.R. 19326, 4-6-20]. The rule is effective April 1, 2020, until December 31, 2020.

In general, the FFCRA requires covered employers to provide eligible employees up to two weeks (80 hours) of paid sick leave for certain COVID-19-related reasons. The leave must be paid at either full pay or 2/3 pay, depending on the employee’s reason for taking leave.

The FFCRA also requires covered employers to provide up to 12 weeks of expanded family and medical leave, up to 10 weeks of which must be paid at 2/3 pay, when an eligible employee is unable to work because of a need to care for a son or a daughter whose school or place of care is closed, or whose child care provider is unavailable, due to COVID-19-related reasons.

The temporary rule explains what emergency paid sick leave and expanded paid family and medical sick leave benefits must be provided, which employees are eligible, employer notice requirements, and employer recordkeeping responsibilities.

Courtesy of the APA

  • May 10 / 2020
What's New

IRS Adds Note to Form 941 for Employee Retention Credit


On April 3, the IRS added a note to the Form 941, Employer’s Quarterly Federal Tax Return, and its instructions to provide guidance to employers that will claim the employee retention credit. The employee retention credit was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act to support employers that operate a business during 2020 and retain their employees, despite experiencing economic hardship related to the COVID-19 crisis.

The employee retention credit is a refundable tax credit equal to 50% of qualified wages paid to employees after March 12, 2020, and before January 1, 2021. Eligible employers that paid any qualified wages between March 13, 2020, and March 31, 2020, will include 50% of those wages together with 50% of any qualified wages paid during the second quarter of 2020 on their second quarter Form 941 to claim the employee retention credit. The credit should not be included on the first quarter Form 941.

The IRS created FAQs on the employee retention credit.

Courtesy of the APA

  • May 10 / 2020
What's New

CARES Stimulus Payment May Be Reduced for Past Due Child Support

The Office of Child Support Enforcement (OCSE) issued a Dear Colleague Letter stating that noncustodial parents who receive stimulus payments under the CARES Act may have the checks offset by past due child support payments [DCL-20-02, 4-13-20].

Background

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act became law. The CARES Act provides qualifying individuals a recovery rebate of up to $1,200 (or $2,400 if married and filing jointly), plus up to $500 for each qualifying child. The IRS has started sending the payments already.

Past Due Payments

The CARES Act intentionally exempts these payments from reduction or offset against certain debts, but there is no exemption for child support debt. “As a result, the economic impact payments made to eligible noncustodial parents who owe past-due child support and who are subject to intercept under the Federal Income Tax Refund Offset Program will be offset by the amount of past-due child support,” OCSE said.

The noncustodial parent’s payment will not be offset if the debt does not exceed the minimum requirement for federal tax refund offset at the time of the match. Generally, this is at least $150 in past due support for the offset to apply for Temporary Assistance for Needy Families (TANF) or Title IV-E foster cases and $500 for non-TANF/IV-E or Medicaid-only cases.

Courtesy of the APA

  • May 10 / 2020
What's New

Social Security Trustees Project Wage Base for 2021

The Board of Trustees of the Social Security Trust Fund reports each year on the financial condition of the social security program. The 2020 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, issued on April 22, includes both short- and long-term projections about the social security system.

Using the “intermediate” projections, the board projects the social security wage base will be $141,900 in 2021 (up from $137,700) and will increase to $192,900 by 2029. The formal announcement of the 2021 social security wage base will not come until mid-October.

The projections, which are only an indication of the expected trend, are based on social security program provisions in current law and do not take into account any changes in these provisions that might be made in the future.

Courtesy of the APA

  • May 10 / 2020
What's New

Reporting of COVID-19 Employment Tax Credits

At the end of April, the IRS issued drafts of the 2020 Form 941Employer’s Quarterly Federal Tax Return, and its instructions to be used beginning with the second quarter return (April 1 to June 30) that must be filed by July 31. The revised form will have “significant changes” to allow reporting of new employment tax credits and other tax relief related to the novel coronavirus (COVID-19). The draft form cannot be filed, but the IRS should release the final version soon.

Significant Changes

The revised Form 941 will contain extensive changes, including:

  • Parts 1 and 3 of Form 941 will be significantly expanded to account for the new credits eligible employers can claim for COVID-19-related qualified paid sick leave and expanded family and medical leave and the employee retention credit. Employers choosing to defer their portion of social security tax will also report the deferral on the Form 941.
  • Employers will use the new Worksheet 1, Credit for Sick and Family Leave Wages and the Employee Retention Credit, to calculate these credits.
  • Employers that requested an advance of the qualified leave credits and/or the employee retention credit by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19, will report the amount of the advances on the revised Form 941.

Employee Retention Credit Wages Paid in March

Employers that paid qualified wages and qualified health plan expenses allocable to those wages between March 13-31, 2020, for the employee retention credit will report that information on their second quarter Form 941.

Courtesy of the APA

  • Apr 04 / 2020
What's New

Economic Stimulus Legislation Includes Payroll Provisions

On March 27, President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law [Pub. L. 116-136]. The economic stimulus legislation contains many payroll provisions.

Delayed Payment of Employment Taxes

Employers can defer payment of their 6.2% employer share of social security taxes due between the date of enactment (March 27, 2020) and before January 1, 2021. Employers will be required to deposit 50% of the amount due by December 31, 2021, and the remaining 50% by December 31, 2022.

Employer Retention Credit

The CARES Act provides a tax credit that is intended to help employers retain employees on their payroll. Employers may claim a payroll tax credit against “applicable employment taxes” (the employer share of social security taxes) for each calendar quarter equal to 50% of the qualified wages paid to employees.

An “eligible employer” is one that had its operations fully or partially suspended during the calendar quarter due to government orders limiting business activities or that has suffered a loss of 50% in gross receipts compared to the same period in the previous year due to COVID-19.

Qualified wages for the credit per employee are capped at $10,000 per quarter (and include certain employer-paid qualified health plan expenses). Employers with more than 100 full-time employees (as defined under the Affordable Care Act) can claim the credit on wages paid to employees who are retained but not working due to COVID-19. Employers with fewer than 100 employees can claim the credit for wages paid to all employees.

Additional Payroll Provisions

The CARES Act also includes provisions creating “paycheck protection” loans for small businesses, extended relief for federal student loan borrowers, relaxed rules for COVID-19-related withdrawals and loans from qualified retirement plans, and extended unemployment insurance benefits.

Courtesy of the APA

 

  • Apr 04 / 2020
What's New

Federal Agencies Announce Plans to Implement Emergency Paid Sick Leave

The U.S. Treasury Department, Internal Revenue Service (IRS), and Department of Labor (DOL) announced plans to allow small and midsize employers to begin claiming two new refundable payroll tax credits, designed to immediately and fully reimburse them for the cost of providing COVID-19-related leave to their employees [IR-2020-57, 3-20-20]. The agencies are moving swiftly to implement the Families First Coronavirus Response Act (Pub. L. 116-127), which was signed into law on March 18, 2020.

  • Apr 04 / 2020
What's New

USCIS Releases New Form I-9, Instructions

On January 31, U.S. Citizenship and Immigration Services (USCIS) released the new Form I-9, Employment Eligibility Verification, along with the updated instructions. Employers must begin using the new version of Form I-9 (dated October 21, 2019) by April 30, 2020 [85 F.R. 5683, 1-31-20].

Employers should begin using the new Form I-9 immediately, but USCIS allows employers 90 days to make necessary updates and adjust their business processes for the new version.

  • Apr 04 / 2020
What's New

DOL Announces Annual Adjustments for FLSA, FMLA Violations

The U.S. Department of Labor (DOL) released inflation adjustments to the civil penalties for violations of certain laws, including the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA) [85 F.R. 2292, 1-15-20]. The new amounts apply only to civil penalties assessed after January 15, 2020, whose associated violations occurred after November 2, 2015.

Here are some of the inflation adjustments for 2020:

  • FLSA minimum wage and overtime penalties.The penalty for willful violations of the minimum wage and overtime provisions increases from $2,014 to $2,050.
  • FLSA child labor penalties:
    •  Child labor violation penalties increase from $12,845 to $13,072.
    • Penalties for child labor violations resulting in serious injury or death increase from $58,383 to $59,413.
    • Penalties for child labor violations that are willful and result in serious injury or death increase from $116,766 to $118,826.
  • FMLA. The penalty for willfully failing to comply with the FMLA notice requirements increases from $173 to $176.
  • Contract Work Hours and Safety Standards Act. The daily liquidated damages fine remains at $27.

Courtesy APA

  • Apr 04 / 2020
What's New

IRS Releases 2020 Publication 15-T

The IRS released the 2020 Publication 15-T, Federal Income Tax Withholding Methods, which describes how to figure withholding using the Percentage Method and the Wage Bracket Method and also describes alternative methods for figuring withholding. The publication explains how to withhold income tax based on pre-2020 Forms W-4 and 2020 Forms W-4, Employee’s Withholding Certificate.

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