© 2021 American Payroll Institute, Inc. Government Relations Task Force Establishes Form W-4 Workgroup The APA Government Relations Task Force Subcommittee on Federal Issues formed a new subgroup, the Form W-4 Workgroup, in June. The workgroup comprises APA members who worked with the IRS and U.S. Department of the Treasury on changes to the Form W-4, Employee’s Withholding Certificate, following passage of the Tax Cuts and Jobs Act (TCJA) in 2017. The workgroup was created because the Form W-4 continues to be difficult for employees to understand. Payroll managers often are faced with unhappy employees resulting from the challenges of trying to understand the differences between the previous and new versions of the form. These differences may lead to employees believing there are inaccuracies in withholding when they complete the new version of the form and then owe income taxes later. The new workgroup will re-examine the form and related instructions to develop recommendations for the IRS to make improvements in the form’s design or instructions. Because the form was revised to comply with tax law changes made by the TCJA, if any recommendations require legislative action, the workgroup will consider contacting appropriate leaders in the U.S. House of Representatives and Senate. Problems under consideration Issues for employees and payroll departments include: Calculating amounts for multiple jobs, Assessing income for the household not just the employee, Understanding allowances vs. dollar amounts, Maintaining old and new forms in payroll systems, Understanding employee and employer instructions, and Training new and entry-level payroll team members. How to get involved APA members interested in participating in the workgroup can contact the Government Relations Division by visiting the APA website and clicking on “contact us.” Payroll Management and the New Juneteenth Federal Holiday On June 17, President Biden signed S. 475, the Juneteenth National Independence Day Act, into law, which makes Juneteenth a new federal holiday starting in 2021, with the official holiday observed on June 18 since June 19 was a Saturday [Pub. L. 117-17]. The holiday recognizes the date June 19, 1865 when Union Gen. Gordon Granger arrived in Galveston, Texas, to inform enslaved African Americans of their freedom and that the U.S. Civil War had ended. Employment tax deposits For employers that had a June 18 employment tax deposit deadline, the sudden addition of a new federal holiday raised the question of whether the deadline would be moved to the next business day, which was Monday, June 21. The general rule is that when a due date falls on a Saturday, Sunday, or legal holiday, the due date becomes the next business day. This seems straightforward, but there is a question of how to define a “legal holiday.” In 1996, the IRS issued regulations that changed the definition of “legal holiday” by eliminating the list that had been in the regulations and substituting a reference to “legal holidays in the District of Columbia.” In 2010, the IRS further clarified this issue as part of the regulations that require all employers to deposit federal employment taxes through its Electronic Federal Tax Payment System (EFTPS). The rules clearly state that only Saturdays, Sundays, and federal legal holidays those observed in the District of Columbia delay the due date for filing a return or making a deposit. While the legislation made Juneteenth a federal holiday, there is some question as to whether it was an official holiday for the District of Columbia. In a press release, Washington, D.C., Mayor Muriel Bowser did announce that the District of Columbia government would observe the holiday. APA’s Government Relations Division has contacted the IRS to ask for guidance as to whether late filing penalties for deposits made on June 21 that were originally due on June 18 will be waived. Other payroll considerations Private-sector employers are not required to recognize any federal or state holidays or provide paid or unpaid leave for the Juneteenth holiday. The Fair Labor Standards Act does not require payment for time not worked. In addition to determining how to handle the holiday for 2021, employers that decide to recognize the Juneteenth holiday going forward need to update their payroll systems accordingly. Payroll managers may be on employer teams regarding paid time-off decisions. They also may be asked by employees about their employers’ policies. Payroll managers should seek written statements from employers so they can direct employees to the company’s official leave policies. July 2021 A Supplement to Payroll Currently, Issue 7, Volume 29
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