© 2020 American Payroll Institute, Inc. Inside this issue... Social Security Trustees Project $141,900 Wage Base for 2021. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 IRS Lists Common Mistakes to Avoid When Filling Out Form 7200. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 IRS Provides Penalty Relief for Failure to Deposit Employment Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 IRS Urges Electronic Filing of Employment Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 IRS Suspends TFRP Collections Until July 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 DOL Posts Minor Changes to FFCRA Temporary Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 SBA Announces Interim Final Rule on Paycheck Protection Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 CARES Stimulus Payment May Be Reduced for Past Due Child Support. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 APA Answers Questions About COVID-19-Related Legislation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 APA to Hold Annual Event as Congress Xstream in June. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 USCIS Posts Q&As for Temporary Policies on Form I-9, E-Verify . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 IRS Updates Foreign Earned Income Exclusions for 2019, 2020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 APA Updates Electronic Payments Guide. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Special Report: APA’s 2020 Virtual Capital Summit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 State and Local News. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 May 8, 2020 Volume 28 Issue 5 IRS Updating Form 941 to Accommodate New Employment Tax Credits A941, t the end of April, the IRS issued drafts of the 2020 Form Employer’s Quarterly Federal Tax Return, and its instructions to be used beginning with the second quarter return (April 1 to June 30) that must be filed by July 31. The form has “significant changes” to allow reporting of new employment tax credits and other tax relief related to the novel coronavirus (COVID-19). The IRS issued a draft of the Form 941, Schedule R, Allocation Schedule for Aggregate Form 941 Filers, to account for the Form 941 line changes. The draft forms cannot be filed, but the IRS should release the final versions soon. The IRS is significantly revising Form 941 to account for refundable employment tax credits included in the Families First Coronavirus Response Act (FFCRA) and the employee retention credit and the deferral of the employer portion of social security tax included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Background Qualified leave. The FFCRA requires employers with fewer than 500 employees to provide emergency sick leave and expanded family and medical leave (together, qualified leave) related to COVID-19. These businesses are eligible to claim the credit for qualified leave wages for the period from April 1 to December 31, 2020. The credit consists of the qualified leave wages and the qualified health plan expenses (amounts paid or incurred by the employer to maintain or provide a group health plan) and the employer share of Medicare tax allocated to those wages. Employee retention credit. The CARES Act creates an employee retention credit equal to 50% of qualified wages paid to employees between March 13 and December 31, 2020. Qualified wages are limited to a maximum of $10,000 per employee total. Qualified wages are wages for social security and Medicare tax purposes paid to certain employees during a quarter in which operations are fully or partially suspended due to a government order or during a quarter with a significant decline in gross receipts (less than 50% of what they were in the same calendar quarter in 2019). The qualified wages calculation depends on the size of an employer’s workforce: Eligible employers with an average number of 100 or fewer full-time employees during 2019 count wages paid to all employees. Eligible employers with more than 100 full- time employees in 2019 may count only wages paid to employees for time these employees were not working due to the COVID-19-related crisis. Reducing deposits for COVID-19 credits. Employers eligible to claim the qualified leave credit and/or the employee retention credit can reduce their deposits by the amount of their anticipated credits. Employers will not be subject to penalties for reducing their deposits if certain
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