Daily News Updates for April

Here are our news updates for April.  I post one news item per update to our subscribers here on the blog. To receive all of the day’s payroll news updates, subscribe to Payroll 24/7 for only $149 per year.

 

 

 

April 29, 2022: The IRS has issued the following in draft form:

April 20, 2022:  The IRS has released the draft of the Form 941 for the second quarter of 2022. Major changes include marking most COVID19 related lines as “reserved for future use”. The forms 941-SS and 941 PR have also been released draft

April 5, 2022: The Office of Child Support Enforcement has created the electronic version of the National Medical Support Notice.  Known as e-NMSN it is modeled after the highly successful e-IWO process.  Information on this new system can be found on the OCSE website.  Currently Virginia is the only state using this new system.

 

Daily News Updates for March

 

Here are our news updates for March.  I post one news item per update to our subscribers here on the blog. To receive all of the day’s payroll news updates, subscribe to Payroll 24/7 for only $149 per year.

 

 

 

March 29: Utah has passed a law (SB 39) that amends how nonresidents working in Utah are taxed. The “mobile workforce” income tax bill addresses the tax liability and withholding requirements for a nonresident individual earning wages in the state. This bill creates an exemption from income tax if a nonresident individual works in the state for 20 or fewer days during a taxable year and provides the circumstances that the individual’s resident state provides a substantially similar exclusion or does not impose a state individual income tax.

March 25:  Two California cities have minimum wage increases coming in July:

  • Emeryville, California: The city’s minimum wage rate will increase to $17.68 per hour effective July 1, 2022.
  • Pasadena, California: The minimum wage rate for Pasadena will increase to $16.11 per hour on July 1, 2022.

March 9:  The Department of Transportation has released the applicable terminal charge and the Standard Industry Fare Level (SIFL) mileage rates for determining the value of noncommercial flights on employer-provided aircraft in effect for the first half of 2022 for purposes of the taxation of fringe benefits. The unadjusted rates for flights taken during the period from January 1, 2022, through June 30, 2022are as follows:

  • $.2460 per mile for the first 500 miles
  • $.1876 per mile 501 through 1,500 miles
  • $.1803 per mile over 1,500 miles
  • terminal charge is $44.98

Daily News Updates for February

A bit more of a change up for the new year.  Several of my followers have noted that having one blog for news updates per month would be easier rather than breaking it up by week.  To further refine my new blogs I will do one for each month, in this case February, and update daily as my news letters go out.  I hope you find this helpful.

 

February 22, 2022:  I have not posted for a while as the news has been really slow.  But it is coming back now that year end is over and legislatures are coming back to work.  Today we have the minimum wage increase for airport workers in Houston, TX.

The Mayor has signed an Executive Order that will raise the minimum wage for Houston airport workers to the following:

  • $13.00 per hour, eff. April 1, 2022
  • $14.00 per hour, eff. Oct. 1, 2022
  • $15.00 per hour, eff. Oct. 1, 2023.

 

February 3, 2022: Pennsylvania: The Department of Revenue has announced on its website that due to the very high volume of users attempting to upload large volumes of information simultaneously, e-TIDES, the Department of Revenue’s online business tax filing system, has been experiencing technical issues. As a result, the department has extended the filing deadline for W2s, 1099s, and the REV-1667 to February 4, 2022.

 

 

 

 

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Daily News Updates for January, 2022

A bit more of a change up for the new year.  Several of my followers have noted that having one blog for news updates per month would be easier rather than breaking it up by week.  To further refine my new blogs I will do one for each month, in this case January, and update daily as my news letters go out.  I hope you find this helpful.

January 25, 2022: IRS: The IRS has issued guidance for employers regarding the retroactive termination of the Employee Retention Credit. Notice 2021-65 applies to employers that paid wages after September 30, 2021 and received an advance payment of the Employee Retention Credit for those wages or reduced employment tax deposits in anticipation of the credit for the fourth quarter of 2021 but are now ineligible for the credit due to the change in the law.

January 14, 2022: Virginia:  The Department of Taxation has revised the Income Tax Withholding Guide for Employers with a January 2022 revision date. The Guide was last revised November 2021. There are no substantive changes. The tax tables are not changed.

January 6, 2022: On the payroll industry phone call this morning the IRS stated to my question that it has still not issued guidance on the electronic filing threshold for Forms W-2 for 2021 W-s filed by 1-31-22. It could be 100 or more or still 250 or more.

January 4, 2022:   Form W-4 has been finalized for 2022. It is available on the IRS website.

 

 

 

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IRS Issues Guidance on ERC for 4th Quarter

Editor’s Note: The Internal Revenue Service today issued guidance for employers regarding the retroactive termination of the Employee Retention Credit. I have included the entire email breakdown provided by the IRS with the Notice for you in this blog. Use the link to access the actual notice for more info.

The Infrastructure Investment and Jobs Act, which was enacted on Nov. 15, 2021, amended the law so that the Employee Retention Credit applies only to wages paid before October 1, 2021, unless the employer is a recovery startup business. Notice 2021-65 applies to employers that paid wages after September 30, 2021, and received an advance payment of the Employee Retention Credit for those wages or reduced employment tax deposits in anticipation of the credit for the fourth quarter of 2021, but are now ineligible for the credit due to the change in the law. The notice also provides guidance regarding how the rules apply to recovery startup businesses during the fourth quarter of 2021.

Employers who Received Advance Payments

Generally, employers that are not recovery startup businesses and received advance payments for fourth quarter wages of 2021 will avoid failure to pay penalties if they repay those amounts by the due date of their applicable employment tax returns.

Employers who Reduced Employment Tax Deposits

Employers that reduced deposits on or before Dec. 20, 2021, for wages paid during the fourth calendar quarter of 2021 in anticipation of the Employee Retention Credit and that are not recovery startup businesses will not be subject to a failure to deposit penalty with respect to the retained deposits if—

 

  • The employer reduced deposits in anticipation of the Employee Retention Credit, consistent with the rules in Notice 2021-24,
  • The employer deposits the amounts initially retained in anticipation of the Employee Retention Credit on or before the relevant due date for wages paid on December 31, 2021 (regardless of whether the employer actually pays wages on that date). Deposit due dates will vary based on the deposit schedule of the employer, and
  • The employer reports the tax liability resulting from the termination of the employer’s Employee Retention Credit on the applicable employment tax return or schedule that includes the period from October 1, 2021, through December 31, 2021. Employers should refer to the instructions to the applicable employment tax return or schedule for additional information on how to report the tax liability.

Due to the termination of the Employee Retention Credit for wages paid in the fourth quarter of 2021 for employers that are not recovery startup businesses, failure to deposit penalties are not waived for these employers if they reduce deposits after Dec. 20, 2021. If an employer does not qualify for relief under this Notice, it may reply to a notice about a penalty with an explanation and the IRS will consider reasonable cause relief.

IRS Releases 2022 Retirement Plan Limits

Section 415 of the Internal Revenue Code (“Code”) provides for dollar limitations on benefits and contributions under qualified retirement plans. Section 415(d) requires that the Secretary of the Treasury annually adjust these limits for cost-of-living increases. The IRS released Notice 2021-61 (PDF) to provide for cost-of-living adjustments to dollar limitations for retirement plan benefits and contributions. This includes the following:

  • Annual benefit under a defined benefit plan under section 415(b)(1)(A) of the Code is increased from $230,000 to $245,000
  • The limitation for defined contribution plans under section 415(c)(1)(A) is increased in 2022 from $58,000 to $61,000.
  • The limitation under section 402(g)(1) on the exclusion for elective deferrals described in section 402(g)(3) is increased from $19,500 to $20,500.
  • The annual compensation limit under sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $290,000 to $305,000.
  • The dollar limitation under section 416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy plan is increased from $185,000 to $200,000.
  • The limitation used in the definition of “highly compensated employee” under section 414(q)(1)(B) is increased from $130,000 to $135,000.

 

Tip Work Yes or No?

On October 28, 2021, the U.S Department of Labor announced publication of the Tips Dual Jobs final rule that sets reasonable limits on the amount time an employer can take a tip credit when a tipped worker isn’t doing tip producing work. It clarifies that an employer may take a tip credit only when an employee is performing work that is part of a tipped occupation, specifically; performing work that is tip producing or performing work that directly supports work that is tip producing for a limited amount of time.

The Final Rule also amends the provisions of the Executive Order 13658 regulations, which address the hourly minimum wage paid by contractors to workers performing work on or in connection with covered federal contracts consistent with the amendments to the dual jobs regulations.

Under the final rule, an employer can take a tip credit only when the worker is performing tip producing work or when:

  • A tipped employee performs work that directly supports tip producing work for less than 20 percent of the hours worked during the employee’s workweek. Therefore, an employer cannot take a tip credit for any of the time that exceeds 20 percent of the workweek. Time for which an employer does not take a tip credit is excluded in calculating the 20 percent tolerance.
  • A tipped employee performs directly supporting work for not more than  30 minutes. Therefore, an employer cannot take a tip credit for any of the time that exceeds 30 minutes.

The final rule becomes effective December 28, 2021.  See the Department of Labor website for more information.

 

YouTube News Alerts for Payroll 24/7

I want to let all my blog followers know that the Payroll Advisor now has a YouTube channel where I post my breaking news alerts.  These alerts are almost daily and help you keep abreast of the breaking news especially during this hectic time of year-end. If you are a subscriber to my news e-alert, Payroll 24/7 these updates will be already available to you first through that service.  Of course we only cover one news item per day in these news alerts so if you need all the news each day, you may consider subscribing to our news service.  I hope you find these news videos helpful and informative. If you do I hope you will hit the subscribe button to ensure you receive all future videos.

In the near future I will be adding other videos on various topics for subscribers to my YouTube channel.  These will include brief instructional videos on various payroll related topics.  So please check out our channel and hit the like and subscribe button.

IRS Releases Deposit Schedules and Rules for 2022

The IRS has issued the annual deposit schedules in Notice 931. To review, there are two deposit schedules—monthly or semiweekly—for determining when you deposit social security and Medicare taxes and withheld federal income tax. These schedules tell you when a deposit is due after a tax liability arises (for example, when you have a payday). Before the beginning of each calendar year, you must determine which of the two deposit schedules you must use. The deposit schedule you must use is based on the total tax liability you reported during a lookback period. Your deposit schedule isn’t determined by how often you pay your employees or make deposits. These rules don’t apply to federal unemployment (FUTA) tax. See the Instructions for Form 940 for information on depositing FUTA tax.

Your deposit schedule for a calendar year is determined from the total taxes reported on your Forms 941 in a 4-quarter lookback period. The lookback period begins July 1 and ends June 30, as shown in the chart below. If you  reported $50,000 or less of Form 941 taxes for the lookback period, you’re a monthly schedule depositor; if you reported more than $50,000, you’re a semiweekly
schedule depositor. The lookback period for a 2022 Form 941 filer who filed Form 944 in either 2020 or 2021 is calendar year 2020.

You’re a monthly schedule depositor for a calendar year if the total tax reported for your lookback period was $50,000 or less. Under the monthly deposit schedule, deposit accumulated taxes on payments made during a calendar month by the 15th day of the following month. New employers. Your tax liability for any quarter in the lookback period before the date you started or acquired
your business is considered to be zero. Therefore, you’re a monthly schedule depositor for the first calendar year of your business. You’re a semiweekly schedule depositor for a calendar
year if the total taxes during your lookback period were more than $50,000. Your deposit schedule is in the chart below:

However, it is possible to have to deposit taxes the next day. If you accumulate a tax liability of $100,000 or more on any day during a deposit period, you must deposit the tax by the close of the next business day, whether you’re a monthly or semiweekly schedule depositor. And If you’re a monthly schedule depositor and accumulate a $100,000 tax liability on any day, you become a semiweekly schedule depositor on the next day and remain so for at least the rest of the calendar year and for the following calendar year.