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  • Aug 29 / 2021
What's New

Department of Education Extends Federal Student Loan Relief


The U.S. Department of Education announced it will extend the federal student loan relief until January 31, 2022 [U.S. Department of Education, Press Release, 8-6-21; Federal Student Aid notice]. This final extension sets a “definitive end date” to the relief.

During this extension of relief for federal student loan borrowers, repayments, interest, and collections are still halted, and any borrower with defaulted federally held loans whose employer continues to garnish their wages will receive a refund of those garnishments. The relief had been set to expire on September 30, 2021.

Courtesy of the APA

  • Aug 29 / 2021
What's New

Federal Per Diem Rates Updated for Fiscal Year 2022


The General Services Administration (GSA) issued its annual updated list of federal maximum per diem rates for travel to locations within the continental United States (CONUS). Per Diem Bulletin FTR 22-01 is effective for travel undertaken on or after October 1, 2021 [86 F.R. 45731, 8-16-21].

GSA Per Diem Rates

The federal per diem rate is a combination of the lodging expense rate and the meal and incidental expense (M&IE) rate for the locality of travel. For travel within CONUS, the per diem rates published by the GSA may be used to substantiate certain travel expenses.

The standard CONUS M&IE rate is $59 for fiscal year (FY) 2022. The M&IE rates for non-standard areas (NSAs) increase to $59, $64, $69, $74, and $79.

For all locations within CONUS not shown on the list, the lodging per diem remains at $96, the M&IE rate increases to $59, and the combined maximum standard per diem rate increases to $155. The combined per diem rates for the listed NSA locations range from a low of $155 (off-season) for several locations, to a high of $497 (peak season) for Telluride, Colo. There are 319 NSA locations in FY 2022. All FY 2022 NSA lodging per diem rates will remain at FY 2021 levels.

Courtesy of the APA

  • Mar 30 / 2021
What's New

IRS Releases 2021 Form 941, Instructions for Form and Schedules B and R


On March 9, the IRS released the 2021 Form 941, Employer’s Quarterly Federal Tax Return, and its instructions. The IRS also revised the instructions for Form 941, Schedule B and the instructions for Form 941, Schedule R. When the IRS released the instructions, Congress was considering changes to COVID-19 tax relief. When the new legislation changes these instructions, the IRS will post updates here.

Updates to Form 941

The Form 941 instructions have been updated to include extensions of the COVID-19-related tax credits under the Consolidated Appropriations Act, 2021:

  • The Families First Coronavirus Response Act (FFCRA) tax credit for emergency paid sick leave wages and expanded family and medical leave wages was extended to qualified leave wages paid for leave taken before April 1, 2021.
  • The employee retention credit, established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, was extended to qualified wages paid through June 30, 2021.
  •  The instructions also provide guidance on claiming advance tax credits using Form 7200, paying the employer and employee social security tax deferred in 2020, and a new payroll tax credit for tax-exempt organizations affected by qualified disasters.

Paying Deferred Amount of Social Security Tax

The IRS said it will update its Electronic Federal Tax Payment System (EFTPS) to allow employers to pay the deferred amounts of the employer and employee share of social security tax by March 19. Filers will be able to select the new option to make these payments.

Courtesy of the APA

 

  • Mar 30 / 2021
What's New

California Pay Data Reporting Required by March 31


By March 31, 2021, California private employers with 100 or more employees that are required to file the annual federal Employer Information Report (EEO-1) are required to submit a pay data report to the state. The California Pay Data Reporting Portal is open.

Due to the COVID-19 pandemic, the California Department of Fair Employment and Housing will consider an employer’s request that the agency defer seeking an order for compliance (to submit the required report by the due date). An employer must submit the request before March 31. Requests must be submitted using the online form.

Legislation requiring California pay data reporting in 2021 was passed last year. Guidance is available for employers, including a User Guide, FAQs, and a template that employers may use to submit their data.

Courtesy of the APA Lia Coniglio, Esq

  • Mar 09 / 2021
What's New

Biden Administration Extends Relief for Federal Student Loan Borrowers


On January 20, President Biden requested that the Secretary of Education extend COVID-19-related relief for federal student loan borrowers. The U.S. Department of Education has indicated on its Coronavirus and Forbearance Info for Students, Borrowers, and Parents website that the relief will be extended at least through September 30, 2021. Without the extension, the relief measures would have expired on January 31.

During this extension of the payment suspension, collections on defaulted, federally held loans are still halted, and any borrower with defaulted federally held loans whose employer continues to garnish their wages will receive a refund of those garnishments.

New Administration May Have Big Impact on Payroll

The Biden administration has many priorities that, if implemented, will have a big impact on payroll professionals. Some of these policy initiatives include: adjusting the income tax benefits for participation in retirement plans such as 401(k) plan, raising the federal minimum wage to $15 an hour, and reforming labor provisions relating to joint employer status.

Courtesy of Curtis E. Tatum, Esq., Director of Federal Payroll Compliance for the APA.

  • Mar 09 / 2021
What's New

IRS Releases 2021 Forms W-2, W-3, Instructions


The IRS released the 2021 Form W-2, Wage and Tax Statement, Form W-3, Transmittal of Wage and Tax Statements, and the General Instructions for Forms W-2 and W-3. The instructions have been updated to address how employers should handle COVID-19-related employment tax credits.

Items of interest to payroll professionals:

  • Potential discrepancies when reconciling Forms W-2 and W-3 with Forms 941 and 944 due to COVID-19-related employment tax credits.Employers may have a discrepancy when reconciling Forms W-2 and W-3 with Forms 941 and 944 if COVID-19 tax relief was taken in 2020. Paid qualified sick leave and family leave wages are not subject to the employer share of social security tax. Also, the deferred amount of the employee share of social security tax is reported on Forms 941 and 944, but it is not reported on Forms W-2 and W-3.
  • Reporting deferred employee share of social security tax from 2020. Employee social security tax deferred in 2020 under Notice 2020-65 that is withheld in 2021 and not reported on the 2020 Form W-2 should be reported in Box 4 on Form W-2c. Enter tax year “2020” in Box c and adjust the amount previously reported in Box 4 of the Form W-2 to include the deferred amounts withheld in 2021. All Forms W-2c should be filed with the Social Security Administration, along with Form W-3c, as soon as possible after withholding the deferred amounts. For more information, see the IRS webpage on Form W-2 reporting of employee social security tax deferred under Notice 2020-65.
  • Mar 09 / 2021
What's New

IRS Releases 2021 Publications 15 (Circular E) and 15-B

Circular E summarizes the COVID-19-related tax credits and other tax relief on page 2.

COVID-19 Items 

Due to the COVID-19 pandemic, employers with participants in health and dependent care flexible spending arrangements (FSAs) can amend their plans to allow:

  • Participants in health and dependent care FSAs to carry over any unused benefits or contributions remaining in the account from the plan year ending in 2020 to 2021 and also from the plan year ending in 2021 to 2022.
  • A 12-month grace period for unused benefits or contributions in health and dependent care FSAs for plan years ending in 2020 or 2021.
  • Post-termination reimbursements from health FSAs from unused benefits or contributions for 2020 or 2021 through the end of the plan year in which an employee ceases participation in the plan.
  • A midyear change in the election amounts up to the maximum allowable amount for the year for health and dependent care FSAs for plan years ending in 2021.

Reminder on Withholding Tables

The percentage method and wage bracket method withholding tables, as well as the amount to add to a nonresident alien employee’s wages for figuring income tax withholding, are now in Publication 15-T,  Federal Income Tax Withholding Methods.

  • Mar 09 / 2021
What's New

IRS Releases 2021 Publication 15-A


The IRS released the 2021 Employer’s Supplemental Tax Guide (Publication 15-A). The 2021 Circular E, Employer’s Tax Guide (Publication 15), and the Employer’s Tax Guide to Fringe Benefits (Publication 15-B).

Breakdown of Publications 15

  • Publication 15 (Circular E) contains the bulk of the information employers need for tax information. For 2021, Circular E summarizes much of the COVID-19-related tax credits and other tax relief on page 2.
  • Publication 15-A contains specialized and detailed employment tax information supplementing the basic information provided in Circular E.
  • Publication 15-B contains information about the employment tax treatment of various types of noncash compensation.
  • Publication 15-T, Federal Income Tax Withholding Methods, contains the percentage method and wage bracket method withholding tables, as well as the amount to add to a nonresident alien employee’s wages for figuring income tax withholding.
  • Jan 07 / 2021
What's New

Business Standard Mileage Rate Decreases to 56 Cents in 2021


The IRS announced that the business standard mileage rate for transportation expenses paid or incurred beginning January 1, 2021, will be 56 cents per mile, down 1.5 cents from 2020 [Notice 2021-02, 12-22-20].

The mileage rate may be used to compute the amount to reimburse employees who are using their own cars for business purposes. It may also be used by employers that elect to use the “cents-per-mile” valuation method for purposes of determining the amount that needs to be imputed to an employee’s income for personal use of certain company-owned or leased nonluxury vehicles (see The Payroll Source®, §3.2-2). However, it may not be used by employees in claiming a tax deduction for unreimbursed employee business expenses, since such deductions are suspended by the Tax Cuts and Jobs Act.

In addition, the 2021 standard rate for miles driven for medical or moving purposes will decrease to 16 cents per mile, down from the 17 cents-per-mile rate in effect during 2020. The deduction for moving expenses only applies to members of the Armed Forces on active duty who move under a military order and due to a permanent change of station. The standard mileage rate for operating a passenger car for charitable purposes, which is set by law, will stay at 14 cents per mile in 2021.

For vehicles put into service in 2021, the cents-per-mile valuation method can be used only if the vehicle does not have a fair market value of more than $51,100 ($50,400 in 2020). For employer-provided vehicles under the fleet-average valuation rule, applicable to an employer with a fleet of 20 or more automobiles, the 2021 maximum value is $51,100 for an automobile ($50,400 in 2020). Note:The fleet-average valuation rule may not be used if any of the automobiles in the employer’s fleet exceeds its maximum allowable value.

REMINDER– Because of the 1.5 cent decrease in the business standard mileage rate, employers reimbursing employees at the 2020 rate need to be mindful of the rate change. To avoid having to include the extra 1.5 cent in the employee’s income and the accompanying withholding and reporting responsibilities, employers should make sure to change to the 2021 rate for all affected travel on or after January 1, 2021. And remember that business miles driven in December 2020 that show up on an employee’s expense report in 2021 are governed by the rules applicable to the corresponding 2020 mileage rate.

  • Jan 07 / 2021
What's New

States Extend Nexus Guidance for Employees Working Remotely


As the COVID-19 pandemic continues to affect people across the country, states have extended their guidance regarding nexus and withholding requirements. Here are some recent state developments.

Massachusetts

The Massachusetts Department of Revenue has extended pandemic-related state income taxation, withholding, and nexus rules that have been in effect on an emergency basis since April and apply from March 10, 2020.The requirements are now scheduled to expire 90 days after the COVID-19 state of emergency is lifted [TIR 20-15, 12-8-20]. New Hampshire has filed a lawsuit over these rules, which may be decided by the U.S. Supreme Court.

Rhode Island

Under emergency regulations that were extended again to January 18, 2021, income of employees who are nonresidents working outside of the state solely due to the pandemic will continue to be treated as Rhode Island-source income for withholding tax purposes [Department of Revenue, Division of Taxation News, 11-23-20].

South Carolina

The South Carolina Department of Revenue has issued additional guidance, effective from March 13, 2020, through June 30, 2021, stating that it will not use the temporary change of an employee’s work location during the COVID-19 relief period to impose withholding tax requirements [Information Letter #20-29, 11-30-20].

Courtesy of: Lia Coniglio, Esq, APA.

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