Coronavirus Update

As I posted in my last blog, many states as well as the federal government are making temporary changes to tax filing deadlines, unemployment insurance requirements and other matters during this pandemic.  The following is a recap of the latest updates that have crossed my desk this week:

Note:  I will be offering a webinar on the payroll related items occurring during this pandemic.  See info at bottom of blog for more details.

Federal: the U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor (Labor) announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed by President Trump on March 18, 2020. For full details see IRS website’s Coronavirus webpage.

The following states are providing filing or deposit penalty relief or extending deadlines due to the Corona Virus:

 

Unemployment Insurance Update: The following states are waiving waiting times or making other temporary changes:

The following is provided by these states:

San Francisco, California: Workers and Families First Program will provide paid sick leave to impacted workers.

New York: Guaranteed sick leave for New Yorkers under mandatory or precautionary quarantine

I will be offering a webinar/lecture on major impacts that affect payroll professionals due to the pandemic.  It will be held on Friday, April 10, 2020 from 10 am to 11:30 am Pacific time.  More details will be available next week.

Corona Virus Update

The federal and state governments are focusing on providing either tax relief, lost wages relief or updates when employers are affected by the Corona Virus.  This may include delaying reporting or allowing for penalty relief.  It may also include mandatory sick pay, clarification on current sick pay mandates or changes to unemployment insurance qualifications. The following are some of the actions being taken by the IRS or states during this difficult time:

Internal Revenue Service: The IRS has established a special section focused on steps to help taxpayers, businesses and others affected by the coronavirus. This page will be updated as new information is available. This page includes information on (1) Deferring tax payments and (2) High deductible plans covering the pandemic.

So far, the following states are addressing the pandemic:

States Extending Filing Deadlines:

  • California: 60-day filing extension available
  • Maryland: Extend to June 1

State Unemployment and/or Disability:

The following states have suspended the waiting period for unemployment benefits for any employees affected by the Corona Virus: California, Illinois, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, New York, North Carolina, Rhode Island, Tennessee, Texas, Vermont, and Washington.

Paid Sick Leave Updates or Guidance:

San Francisco: The San Francisco Office of Labor Standards Enforcement (OLSE) has issued guidance regarding the use of San Francisco paid sick leave for situations involving the recent Coronavirus outbreak.

Colorado: Effective March 11, 2020, emergency rules temporarily require employers in certain industries to provide a small amount of paid sick leave (up to four days) to employees with flu-like symptoms while awaiting coronavirus (COVID-19) testing. The DLSS has a webpage dedicated to the emergency rules with further information that will be updated as necessary.

New Jersey: Workers may use sick leave, apply for TDI or apply for Family Leave Insurance due to the Corona Virus.

Washington: Workers who are sick with the virus and have a Certification of a Serious Health Condition form signed by a healthcare provider may be eligible for Paid Family and Medical Leave benefits. The ESD has a comparison guide and a list of frequently asked questions (FAQs) to find out which programs and benefits are available in various circumstances.

As more information comes in for the states, I will update this blog.

Don’t Get Rejected by the IRS…Make Sure Your 941 Balances

A recent article from RIA told of the following problem:              

Mike McGuire from IRS Modernized e-File (MeF) told listeners to the May 4 payroll industry telephone conference call that the IRS has been rejecting “tens of thousands” of 2017 first quarter electronically-filed Forms 941, Schedule B (Report of Tax Liability for Semiweekly Schedule Depositors) because the total tax liability on Schedule B does not agree with the total tax liability on Form 941, line 12 (Total taxes after adjustments and credits). Prior to the 2017 tax year, the total tax liability on Schedule B had to agree with Form 941, line 10 (Total taxes after adjustments), or the IRS would reject it. However, the IRS revised some of the line numbers on Form 941, beginning with the 2017 tax year, to take into account that “qualified small businesses” may now elect to claim a portion of their research credit as a payroll tax credit against their employer FICA tax liability, rather than against their income tax liability.  Beginning with the 2017 tax year, the total tax liability on Schedule B must agree with Form 941, line 12 (Total taxes after adjustments and credits) rather than line 10. Some electronic filers have not adjusted their programs to take this change into account. Rejected returns have to be resubmitted to the IRS.

Make sure your system has made this change.

 

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California Enacting Electronic Filing Requirement for All Employers

The state legislature has passed AB 1245, a bill that requires California employers of 10 or more employees to submit quarterly payroll tax returns and pay the associated payroll taxes electronically over the California Employment Development Department website starting in 2017. The bill also requires all employers to file and pay electronically effective January 1, 2018. The bill awaits the governor signature and he is expected to sign it.

Today is the last day to receive updates through this blog.  Starting on Monday, August 3rd, the blog will be devoted to discussing current payroll issues and questions.

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WV Imposing Failure to Pay by EFT Penalties

Per a West Virginia State Tax Department website notice, taxpayers required to pay by electronic funds transfer (EFT) will be subject to a 3% civil penalty applied to any payment received on or after March 1, 2015, if the payment is not made by electronic funds transfer (EFT) and a waiver to pay electronically has not been obtained.

SC Implements New EFT Program

My sources are telling me that on March 30, 2015, the South Carolina Department of Revenue (SCDOR) will release a new Electronic Funds Transfer (EFT) Program. Taxpayers are being notified by mail of accounts that are impacted by the change. The mailing includes a welcome letter and a separate PIN Notification letter. The EFT process will continue to require the submission of a D128: Application for Electronic Funds Transfer. With the new program, there will be a new web address and contact phone number. However, current EFT Program users should continue using the current process until March 30, 2015. New Contact Information as of March 30, 2015 Web Address for Tax Payments: www.govone.com/tpp/southcarolina Phone Number for Tax Payments: 1-800-834-7733.