© 2020 American Payroll Institute, Inc. Inside this issue... ACA Affordability Percentage Increases to 9.83% for 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 IRS Instructs Filers Not to Report COVID-19 Credits on Form 8994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 IRS Issues Temporary, Proposed Regulations for Reconciling Refunds of Erroneously Claimed COVID-19-Related Tax Credits. . . . . . . . . 3 Court Rules DOL Exceeded Authority in Administering FFCRA Leave . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 IRS Clarifies Address for Federal Tax Levy Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 IRS Releases Draft 2021 Form W-4P to Reflect Tax Law Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 IRS Revises Form 941 Substitute Specifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 DHS Extends Temporary Requirements for Form I-9 Compliance Again . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 National Payroll Week Celebrates Payroll Professionals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 DOL Publishes Guidance on FFCRA Leave . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 DOL Requests Information on Paid Leave, FMLA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 APA Answers Questions About COVID-19-Related Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 IRS Issues Tax Year 2020 Specifications for Substitute Forms 1099, 1042-S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Payroll Solutions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Agencies Propose Regulations on Grandfathered Health Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Nacha Proposes Two Rules That Could Impact Direct Deposit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 IRS Warns Payroll Professionals of Tax Scams in Annual Dirty Dozen List. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 IRS Encourages Employees to Complete a ‘Paycheck Checkup,’ Updates Publication 505 to Help With Complex Tax Situations. . . . . . 10 TIGTA Report Recommends Improvements to ACA Penalty Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Wage and Hour Roundup. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Special Report: Panel Answers Questions at Congress Xstream Part 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 State and Local News. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 August 7, 2020 Volume 28 Issue 8 IRS Sends Letters to Employers for Form 7200 Processing Delays Iif n mid-July, the IRS started sending letters to employers there is a delay in the processing of their Forms 7200, Advance Payment of Employer Credits Due to COVID-19 [IR-2020-158, 7-15-20]. Background Employers may file Form 7200 to claim advance tax credits for qualified paid emergency sick and expanded family and medical leave wages (together, qualified leave) under the Families First Coronavirus Response Act (FFCRA) and for the employee retention credit created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Employers will later reconcile and claim the tax credits on Form 941, Employer’s Quarterly Federal Tax Return Form 944, Employer’s Annual Federal Tax Return or Form CT-1, Employer’s Annual Railroad Retirement Tax Return. Employers are not required to submit a Form 7200. The two letters sent by the IRS The IRS will send one of two letters if there is a delay in processing the advance credit. Rejected forms. Employers will receive Letter 6312 if the IRS either rejected their Form 7200 or made a change to the requested amount due to a calculation error. The letter will explain the reason for the rejection or list the corrected payment amount. Address verification. Employers will receive Letter 6313 if the IRS needs written verification of the business’ current mailing address. Do not use Form 7200 for address changes The IRS told businesses not to use Form 7200 to notify the agency about mailing address or business location changes [e-News for Small Business, 2020-12, 7-16-20]. If an employer’s Form 7200 specifies an address different from its last known address in IRS records, the IRS will send Letter 6313 to the business to confirm its address. Employers that want the payment sent to the address of record should check the box on Letter 6313 and return it to the IRS. To change its address of record, a business must file Form 8822-B, Change of Address or Responsible Party Business. The IRS said it will not process the Form 7200 until the business replies to confirm or clarify.
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