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.
For more info or details on these credits see the IRS website.
In news for tax professionals and small businesses, the IRS has advised those who are beginning to deal with Form 7200, Advance Payment of Employer Credits Due to COVID-19 to do so carefully to avoid making error when completing the new form. Mistakes in completing the form can lead to processing delays, which in turn delays the IRS approving the credits.
However, the IRS has noted some common errors or mistakes in filling out the form, slowing the process. The errors to avoid include:
de new instructions as it relates to the redesigned Form W-4 for 2020.
The IRS (including the Social Security Administration) holds a monthly payroll profession phone meeting. Usually on the first Thursday of the month, it was delayed this month due to the COVID-19 pandemic. It was held yesterday. As expected, the call centered around the latest updates for the pandemic on the new legislation. Here’s the recap for you:
If the IRS determines that an employee does not have enough withholding, they will notify the employer to increase the amount of withholding tax by issuing a “lock-in” letter that specifies the withholding arrangement permitted for the employee. The employer will also receive a copy for the employee that identifies the withholding arrangement permitted and the process by which the employee can provide additional information to the IRS for purposes of determining the appropriate withholding arrangement. If the employee still works for for the employer, the employer must furnish the employee copy to the employee. If the employee NO LONGER WORKS for the employer, NO ACTION IS REQUIRED. However, if the employee should return to work within twelve (12) months, the employer should begin withholding income tax from the employee’s wages based on the withholding arrangement stated in this letter. The employee will be given a period of time before the lock-in rate is effective to submit for approval to the IRS a new Form W-4 and a statement supporting the claims made on the Form W-4 that would decrease federal income tax withholding. The employee must send the Form W-4 and statement directly to the IRS office designated on the lock-in letter. The employer must withhold tax in accordance with the lock-in letter as of the date specified in the lock-in letter, unless otherwise notified by the IRS. The employer will be required to take this action no sooner than 60 calendar days after the date of the lock-in letter. Once a lock-in rate is effective, an employer cannot decrease withholding unless approved by the IRS.
The U.S. Department of the Treasury and the Internal Revenue Service have issued 
The proposed regulations permit employees to use the new IRS Tax Withholding Estimator (
To help workers more effectively adjust their withholding, the improved Tax Withholding Estimator features a customized refund slider that allows users to choose the refund amount they prefer from a range of different refund amounts. The exact refund range shown is customized based on the tax information entered by that user. Based on the refund amount selected, the Tax Withholding Estimator will give the worker specific recommendations on how to fill out their W-4. This new feature allows users who seek either larger refunds at the end of the year or more money on their paychecks throughout the year to have just the right amount withheld to meet their preference.
y based on the worker’s expected filing status and standard deduction for the year. In addition, workers can choose to have itemized deductions, the Child Tax Credit and other tax benefits reflected in their withholding for the year. It is important for people with more than one job at a time (including families in which both spouses work) to adjust their withholding to avoid having too little withheld. Using the Tax Withholding Estimator is the most accurate way to do this.
Keep up on all the latest payroll news for 2020. 
Our new payroll lecture series for 2020 is here. Our first lecture is on 
thholding Estimator makes it easier to enter wages and withholding for each job held by the taxpayer and their spouse, as well as separately entering pensions and other sources of income. At the end of the process, the tool makes specific withholding recommendations for each job and each spouse and clearly explains what the taxpayer should do next.
The Internal Revenue Service (IRS) announced today that starting May 13th only individuals with tax identification numbers may request an Employer Identification Number, or EIN, as the “responsible party” on the application. This change will prevent entities, such as employer, from using their own EINs to obtain additional EINs. The requirement will apply to both the paper Form SS-4, Application for Employer Identification Number, and the online EIN application.
Federal law requires that the NTA’s annual report identify at least 20 of the most serious problems encountered by taxpayers and to make administrative and legislative recommendations to mitigate those problems. The following are the highlights of this year’s recommendations that affect payroll:
independent contractor.