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IRS Provides Guidance for Payroll Tax Deferrals and Credits

Client Alert
April 13, 2020

Delay of Payment of Payroll Taxes Penalty and Interest Relief

                Under the CARES Act, provision was made for the delay in the payment of the employer portion of the Social Security, Medicare, and Railroad Retirement taxes for wages accrued during the period beginning March 27, 2020 and ending December 31, 2020. Instead of being due on the regular due date for the employer to deposit the taxes, one-half of the employer portion of the taxes for that period would be due on December 31, 2021, and the remaining one-half on December 31, 2022. Employers and self- employed individuals are both eligible for this relief provided they have not had indebtedness forgiven under either Sections 1106 or 1109 of the CARES Act. 

                What was not addressed was the imposition of interest and penalty for failure to make timely deposits of payroll taxes. This was resolved in Notice 2020-22 which was released on March 31, 2020.  Provided the employer pays the amounts by the due dates (December 31, 2021 and December 31, 2022), no penalty or interest will be imposed. However, this does not relieve the employer of making timely deposit of all employee withheld taxes and filing the quarterly Form 941.  

Advance Payment of Employer Credits Due to COVID-19

                On March 31, 2020, the IRS also released Form 7200, Advance Payment of Employer Credits Due to COVID-19. This form allows employers (but not self-employed individuals) who are eligible for tax credits for qualified sick and qualified family leave wages as well as the employee retention credit to request an advance payment of the credits that they will claim on the Form 941, 943, 944 series or Form CT-1. 

                This form may be filed for an advance payment of any credits that an employer anticipates receiving before the end of the month following that quarter.  Simply put, you must file this Form before you file the appropriate quarterly tax reporting form that you normally file.  It is important to remember not to file to request an advance payment for any anticipated credits if you have already reduced your deposits for those amounts. Of particular note is that Form 72 MUST be fax filed to (855) 248-0552.

Date Clarification for Payments Eligible for Qualified Sick and Qualified Family Leave Under FFCRA

                The IRS has also released Notice 2020-21 which states that the official dates between which wages earned (not paid) during the period April 1, 2020, and December 1, 2020, are those which are eligible for the credit. It was further stated in the FAQs on the IRS website that it is the date they are earned or accrued and not the date that the actual payment is made which is key. Therefore, the actual payment may occur in January 2021, but still be an eligible amount. 

For questions, or more information, please contact BMD Tax Member Priscilla Grant at pag@bmdllc.com or 330.253.5934.

Priscilla GrantIRSPayroll Tax Deferrals and CreditsCARES ActQualifed Sick LeaveQualified FMLAInterest ReliefTax PenaltyEmployer Credits
Client Alert

What Inpatient Behavioral Health Providers Need to Know About ODM's New Draft Rule for Reimbursements

November 8, 2023Ohio Department of Medicaid (ODM) recently released a draft rule that will transform how inpatient behavioral health services are reimbursed for some hospitals. ODM will migrate inpatient payments for behavioral health and substance use disorder services (BH/SUD) provided by freestanding psychiatric hospitals (FSPs) from the APR-DRG payment methodology to a per diem payment methodology derived from the APR-DRG system.Press Release, Client Alert

BMD Named to the 2024 U.S. News – Best Lawyers® “Best Law Firms”

November 2, 2023Brennan Manna & Diamond (BMD) is recognized among the leading law firms in the nation according to the 2024 Edition of U.S. News – Best Lawyers®  "Best Law Firms." The firm has ranked in in 13 practice areas and has earned “National Tier 1” rankings in Health Care Law and Litigation-Trusts & Estates.Client Alert

Friendly Physician Models: The Basics Through 5 Frequently Asked Questions

October 27, 2023During the past several years, many health law practices have noticed a dramatic increase in the number of telehealth businesses and private equity backed health care providers. Both of these trends often rely heavily on corporate structures commonly referred to as “friendly physician,” “captive PC” or “MSO” models. Although friendly physician models are used by non-physician health care providers (e.g., physical therapists, psychologists, and dentists), this article focuses on physicians and how the model is used in connection with the provision of professional medical services.Client Alert

The DOL and EEOC Enter a Partnership to Strengthen Federal Employment Law Enforcement

October 23, 2023On September 13, the U.S. Department of Labor’s (DOL) Wage and Hour Division and the Equal Employment Opportunity Commission (EEOC) entered into a Memorandum of Understanding (MOU) agreeing to work together in enforcing federal employment laws. The MOU forms a partnership between the two agencies to encourage coordination through information sharing, joint investigations, training, and outreach.Client Alert

Proposed Laboratory Arrangement Draws Heightened Scrutiny from the OIG

October 18, 2023On September 25, 2023, the Office of Inspector General for the U.S. Department of Health and Human Services (OIG) issued Advisory Opinion 23-06 (AO). The Opinion involved a proposed arrangement between an independent laboratory and other physician laboratories for the purchase of the technical component of anatomic pathology services. The OIG ultimately concluded that the arrangement at issue, if it was entered into with the requisite intent, would implicate the Federal Anti-Kickback Statute (AKS) and constitute grounds for sanctions.
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