Wishing all of my followers a Happy Thanksgiving.
It is becoming big business to take a purchased recording of a previously offered webinar and then pass it off as a live event and accept registrations. The more popular and accomplished the speaker the more often this occurs. I have now been elected to this club of speakers whose webinars are being fraudulently presented. To combat this I have set up a fraud alert page on my website listing those companies who are offering a webinar by me that I recorded for another company and passing it off as their own. As I find these webinars I will blast out the names as well as add them on my website. This, I hope, will prevent any of my social media followers from being ripped off.
So far the following companies have been listed as fraudulent:
- Compliance World (website spelled ccomplainceworld.com)
Today I am adding 24x7conference.com. They are advertising a year end webinar presented by me on November 17, 2020. I have no such webinar scheduled on that date for any of my vendors.
If you are unsure of a webinar please email me to confirm before registering.
The latest version of Form 941-X and its instructions are now in the draft stage. Although scheduled to be finalized in late September the IRS has issued some advice concerning using the form. This advice appeared in the e-news for Payroll Professionals issued on August 25 and states:
The newest version of the Form 941-X (to allow for corrections to the new lines added to the Quarter 2 Form 941) is expected in late September. In the meantime, for 2020:
- If adjusting Quarter 1 or earlier, you may use the existing Form 941-X.
- If adjusting Quarter 2 (or later) and not making any increase or decrease to the employer share of social security tax or to any of the new COVID-related lines that were added to the Quarter 2 Form 941, the IRS strongly recommends not using the existing Form 941-X, but rather waiting for the new Form 941-X revision to be released.
- If adjusting Quarter 2 (or later) and making any increase or decrease to the employer share of social security tax, or to any of the new COVID-related lines, do not use the existing Form 941-X; instead, wait for the new Form 941-X revision.
- Please do not send a Form 941 with “Amended” (or similar notation) written on the form.
If you have already done either of 3-4 above, wait for correspondence to find out if the IRS was able to process the tax return or had to reject it. Given the backlog of paper forms and correspondence due to COVID-19, the IRS is unable to estimate when correspondence will go out.
Since the pandemic of COVID-19 began I have been getting a tremendous amount of questions about the different tax credits and how those tax credits relate to the Form 941. Although I posted quite a few blog items concerning these credits I thought what I might do now is go through the different FAQs that are on the IRS website and take a closer look at specific information the IRS has provided. Over the next several blogs I will pick one or two of the FAQs and discuss them and how they affect payroll and/or the 941 form. I am not going to be covering them in numerical order but rather picking the ones that I think are the most relevant to the questions I have been receiving. I will give the FAQ number and under what topic they can be found, as well as the link if you want more information. One bad thing about the FAQs on this website is if they do jump around quite a bit. You start off at question four and then must wander off to question 44 to get the remainder of the answer. So, what I am going to try to do is put it all in one place. Today’s blog gets us started with our first question.
Under the IRS topic Covid-19-Related Tax Credits: General Information FAQs. FAQ number 4 deals with documentation. The question reads:
What documentation must an eligible employer retain to substantiate eligibility to claim the tax credits?
In this case the question is asking about the tax credits under the paid family leave and paid sick leave along with the allocable qualified health plan expenses and the eligible employer share of Medicare taxes. In answering this question, the IRS is not giving us any specifics when it comes to the type of records that we need to maintain. They simply list the normal records that we would maintain in a payroll department including Form 941. However, they do refer to another FAQ, specifically number 44 under the IRS Topic Covid-19-Related Tax Credits: How To Substantiate Eligibility And Periods Of Time For Which Credits Are Available FAQs. But to truly answer the question we not only need number 44 but also number 45 and number 46 under this topic.
Number 44 reads: what information should an eligible employer received from an employee and maintain to substantiate eligibility for the sick leave our family leave credits? The answer provided is as follows: An Eligible Employer will substantiate eligibility for the sick leave or family leave credits if the employer receives a written request for such leave from the employee in which the employee provides:
- The employee’s name
- The date or dates for which leave is requested
- A statement of the COVID-19 related reason the employee is requesting leave and written support for such reason
- A statement that the employee is unable to work, including by means of telework, for such reason.
In the case of a leave request based on a quarantine order or self-quarantine advice, the statement from the employee should include the name of the governmental entity ordering quarantine or the name of the health care professional advising self-quarantine, and, if the person subject to quarantine or advised to self-quarantine is not the employee, that person’s name and relation to the employee.
In the case of a leave request based on a school closing or child care provider unavailability, the statement from the employee should include the name and age of the child (or children) to be cared for, the name of the school that has closed or place of care that is unavailable, and a representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave and, with respect to the employee’s inability to work or telework because of a need to provide care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care.
But that still does not tell us exactly what that documentation should look like. That is addressed in question number 45, which reads: what additional records should an eligible employer maintained to substantiate eligibility for the sick leave or family leave credit? This answer gets down to the actual documentation from the payroll system. The employer would need to create and maintain records that include the documentation to show how the employer determine the amount of qualified second family leave wages paid to employees are eligible for the credit, including records of work, telework and qualified sick leave and qualified family leave. The documentation should also show how the employer determine the amount of qualified health plan expenses that the employer allocated to those wages. This of course is in addition to the completed 941 form and any copies of Form 7200. These records could come from your payroll system directly via a report, or if that is not possible, an Excel spreadsheet.
Finally question number 46 deals with record retention time limits. Covid-19 related records fall under the same category as all other employment tax records. This is basically four years plus current.
I have webinar companies who are stealing my webinars and presenting them as if I were doing it live. I want my blog followers to be aware of this so they don’t get ripped off. The latest is ComplainceWorld (that’s how they spell it). They are advertising a live 6-hour boot camp with me as the instructor on July 1st. I do not work with this company and I am not leading this webinar. I only found out about it via a spam email I received. Please do not use this company for your training needs! One of the other speakers they list has also never heard of them and his webinar was also stolen. If you see a webinar with my name on it, feel free to contact me via my email, email@example.com to confirm it is genuine. I don’t want any of my followers to get ripped off.
The U.S. Department of Labor will host four webinars in June and July to discuss how the Department is helping workers and employers by reducing regulatory burdens and making it easier to understand and comply with the law. The webinars will also provide an opportunity for workers, employers, and state and local governments to ask questions and discuss how the Department can expand and improve access to its compliance assistance materials.
All events will include U.S. Department of Labor Deputy Assistant Secretary for Policy Jonathan Wolfson.
The webinars will be hosted by the Department’s Office of the Assistant Secretary for Policy and its Office of Compliance Initiatives. Attendance is free, but attendees must pre-register online. If you have questions, please contact Marisela Douglass at firstname.lastname@example.org.
The four webinars are:
Guest Speaker: Wage and Hour Division Administrator Cheryl Stanton
Tuesday, June 23, 2020, 1:00 p.m. to 2:15 p.m. EDT
Register at: Compliance Assistance Webinar 1
Manufacturing and Construction
Guest Speaker: Occupational Safety and Health Administration Principal Deputy Assistant Secretary Loren Sweatt
Thursday, June 25, 2020, 1:00 p.m. to 2:15 p.m. EDT
Register at: Compliance Assistance Webinar 2
Food Service, Hospitality, and Retail
Guest Speaker: Employment and Training Administration Deputy Assistant Secretary Amy Simon
Tuesday, June 30, 2020, 1:00 p.m. to 2:15 p.m. EDT
Register at: Compliance Assistance Webinar 3
Health Care and Emergency Responders
Guest Speaker: Employee Benefits Security Administration Acting Assistant Secretary Jeanne Klinefelter Wilson
Wednesday, July 1, 2020, 1:00 p.m. to 2:15 p.m. EDT
Register at: Compliance Assistance Webinar 4
The IRS is attempting to provide as much information on the various tax credits available to employers during the COVID-19 pandemic. In its latest bid to streamline the information, the IRS has issued Publication 5419, New Employer Tax Credits. The flowchart style publication can be found on the IRS website. The chart breaks the tax credits into two sections. The first section is on the Employee Retention Credit portion. It explains the purpose of the credit…to encourage employers to keep employees on their payroll…the amount of the credit…50%…and who is eligible for the credit…all employers regardless of size, but not governments or businesses who received a PPP loan.
Page 2 of the chart outlines the leave credits for paid sick leave and paid family leave. This applies to employers with 500 or less employees.
The U.S. Department of Labor (DOL) has issued three new opinion letters that address compliance issues related to the Fair Labor Standards Act (FLSA). As a reminder to my readers, an opinion letter is an official, written opinion by the DOL’s Wage and Hour Division (WHD) on how a particular law applies in specific circumstances presented by the employer that requested the letter. The current group of letters issued include:
FLSA2020-3: Addresses excludability of longevity payments from the regular rate of pay. This opinion rules that longevity payments made to employees that clearly “must or shall” be paid cannot be excluded and must be used to calculate the regular rate of pay. However, if the longevity payment is worded as that it may or may not be awarded, up to the discretion of the employer, then it would not need to be included in the calculation for regular rate of pay.
FLSA2020-4: Addresses excludability of referral bonuses from the regular rate of pay. The employer is offering a referral bonus to employees not involved in recruiting or human resources and would be issued in two parts, one immediately and one if the employee is still employed after a year and so is the employee who was referred. The opinion states that the first portion of the bonus would not be included in the regular rate of pay calculations as it is not remuneration for employment as it is a voluntary program. However, the second installment of the bonus would be included as it would be considered the same as a longevity bonus. If the employee received the bonus whether they were still employed or not, it would not be includable.
FLSA2020-5: Addresses excludability of an employer’s contributions to a group-term life insurance policy from the regular rate of pay. In essence, the opinion states that just because a wage paid is subject to federal taxes under the Internal Revenue Code, does not make the same payment includable in the regular rate of pay.
For more information on opinion letters, see the WHD website.
Today is the last day to register for our upcoming webinar, Form 941: CCOVID-19 Edition being held tomorrow. The passage of the Families First and Cares Acts have caused massive changes to IRS Form 941 that affect the final three quarters in 2020! 16 new lines now appear on this form along with changes to two others! Are you ready to meet these changes and handle them correctly? Join me tomorrow, Thurs., May 28th at 10 am Pacific as I examine the Form 941–COVID-19 edition in depth. Use coupon code cjyfrqa6 at checkout for a 10% discount.
The webinar will cover:
- What’s New for Q2-Q4 2020
- Families First Act: Credits for Paid Sick Leave and Paid Family Leave
- CARES Act: including deferring Employer’s Social Security
- IRS Form 7200: Purpose for the form and how it applies to you
- Line by line review of the massive changes of the New Revised Form 941
Submitted to the APA for approval for 1.5 RCHs
The Office of Child Support Enforcement published a guide for employers to begin sending child support payments electronically. According to the guide:
All states and territories accept child support payments at their State Disbursement Unit (SDU) by Electronic Funds Transfer (EFT)/Electronic Data Interchange (EDI), the primary method of sending payments electronically. The EDI portion of the transmission includes identifying information so the payment can be properly credited to the payor’s case(s). SDUs centralize the collection and disbursement of all child support payments withheld by employers as well as other types of payments. Using EFT/EDI is well worth the initial effort. Employers that switch from sending paper checks to electronic payments will enjoy lower costs, fewer errors, and faster processing.
Sending child support payments electronically will save an employer time and money
- Eliminates the cost of printing paper checks and supporting documents
- Eliminates the cost of postage and delays due to lost or misdirected mail
- Reduces check handling and processing costs
- Reduces data entry errors
- Gets child support payments to custodial parents faster
Getting Started with EFT/EDI
There are several ways to send a child support payment electronically:
- By using your own payroll software to send Automated Clearing House (ACH) credit payments (similar to direct deposit) through the Federal Reserve’s banking system with EFT/EDI, using the standard child support addendum segment
- Through a state’s web-based payment service—contact the state child support agency where you send payments for details
- By using a payroll service provider that is already sending child support payments electronically
- By using your bank’s online bill-paying serviceThree Steps to Implement
Step 1: Determine whether your payroll/accounting system supports electronic payments for child support. If it does not, you may want to explore these options:
- In-house information technology staff may be able to make programming changes so that you can produce electronic payments for child support, including the EDI DED (Deduction) child support addendum record that child support agencies need to identify the payments.
- Your payroll/accounting software developer may have an enhancement that supports electronic payments for child support. Contact your user’s group or software representative.
- Your bank may have a software package that will enable you to produce the file formats necessary for electronic payments. Contact your bank and ask for someone in Cash Management, Treasury Management, or Treasury Services.
- This is not always the child support agency or SDU where you are located. It is the agency or SDU in the state that issued the underlying child support order or where you currently send funds.
- Find out the EFT/EDI start-up procedures for the child support agency where you send funds. Do not attempt to transmit child support payments electronically without this information.
Step 3: Conduct the EFT/EDI start-up procedures for each of the child support agencies you contacted in Step 2. These procedures will typically include:
- An exchange of basic banking information (routing codes, account numbers), Federal Employer Identification Number (FEIN), and locator code information with the child support agency.
- A reconciliation between child support agency records and employer records of names, Social Security numbers, and case identification numbers so that each employee’s withholdings are properly credited.
- A transmission of an initial test file, or pre-note, to ensure that the ACH records are formatted and transmitted properly.
Where to go for more information
There are standard record specifications for child support payments. NACHA (National Automated Clearing House Association) publishes the User Guide for Electronic Child Support Payments (PDF)visit disclaimer page to provide SDUs, employers, and their financial institutions with current formats, definitions, and implementation recommendations to remit child support payments and payment information electronically through the ACH network using current conventions and standards.