© 2021 American Payroll Institute, Inc. Inside this issue... IRS Data Affirms Payroll’s Vital Role in Nation’s Tax System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 DOL Proposes Revised Regulations That Clarify Tip Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Supreme Court Dismisses ACA Case for Lack of Standing Other Updates on Cases of Interest to Payroll Professionals. . . . . . . . . 5 IRS Creates FAQs for Paid Sick and Family Leave Credits for 2nd, 3rd Quarters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 IRS Disagrees With 11th Circuit Interpretation That PEO Was Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 EEOC Extends EEO-1 Data Collection Due Date to August 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Free Virtual Event for Payroll Professionals, Their Teams, and Colleagues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ETAAC Presents Annual Report to Congress. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 IRS Finalizes Rules on Deadlines for Federally Declared Disasters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 USCIS Sends Reminder About Permanent Resident Cards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 IRS Updates Publication on Backup Withholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 House Subcommittees Hold Hearing on Tax Gap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Capitol Hill Update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 USCIS Extends EAD Period by One Year for Certain Applicants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Special Report: Panel Answers Questions at Congress Xstream Part 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 State and Local News. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 July 2, 2021 Volume 29 Issue 7 IRS Releases Form 941 and Instructions for Form 941, Schedules B and R The IRS released: a revised 2021 Form 941, Employer’s Quarterly Federal Tax Return, and its instructions instructions for Schedule B, Report of Tax Liability for Semiweekly Schedule Depositors and Schedule R, Allocation Schedule for Aggregate Form 941 Filers, and its instructions. The revised forms and instructions address how to treat revisions to the COVID-19 tax credits and the new COBRA premium assistance credit, created by the American Rescue Plan Act (ARPA). The previous version of Form 941 (revised in March 2021) should only be used to report taxes for the first quarter of 2021. Form 941 (revised in June 2021) should not be used to report taxes for any quarter ending before April 1, 2021. Form 941 and the instructions use the terms “nonrefundable” and “refundable” when discussing credits. Nonrefundable means the portion of the credit that is limited by law to the amount of certain taxes. Refundable means the portion of the credit that is in excess of those taxes (and will be “refunded” to employers). What’s new Here are some of the changes to the Form 941 instructions. Five new worksheets. The instructions now include five worksheets: (1) Credit for Qualified Sick and Family Leave Wages for Leave Taken Before April 1, 2021 (2) Employee Retention Credit for the Second Quarter of 2021 Only (Wages Paid After March 31, 2021, and Before July 1, 2021) (3) Credit for Qualified Sick and Family Leave Wages for Leave Taken After March 31, 2021 (4) Employee Retention Credit for Third and Fourth Quarters of 2021 Only (Qualified Wages Paid After June 30, 2021) and (5) COBRA Premium Assistance Credit. Changes to qualified leave. The ARPA provides credits for qualified sick and family leave wages similar to the credits previously enacted under the Families First Coronavirus Response Act (FFCRA) and amended and extended by the Consolidated Appropriations Act, 2021 (CAA). The credits are available for qualified wages paid for leave taken between April 1 and September 30, 2021. The ARPA kept the daily wage thresholds that previously existed. The credits are still increased by the qualified health plan expenses allocable to the qualified leave wages. Here are other changes: ū Caps reset on April 1. The aggregate cap on qualified sick leave wages remains at 80 hours (10 days), but the limitation on the number of days reset on April 1. The cap on qualified family leave wages increased to $12,000 (from $10,000), and the aggregate cap reset on April 1. ū New reasons for leave allowed. The ARPA expanded paid qualified leave to include the time an employee is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19 (and the employee has
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