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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

Supreme Court Rules that Employers Must Show Substantial Increased Costs to Legally Decline Employees’ Religious Accommodation Requests

June 29, 2023On June 29, 2023, the Supreme Court ruled in Groff v. DeJoy that under Title VII of the Civil Rights Act of 1964 (“Title VII”) employers must show, in order to decline religious accommodations, that the burden of granting religious accommodations to employees will result in substantial increased costs in relation to the conduct of an employer’s particular business, thus amending the prior, simple standard of a “de minimis” undue hardship.Client Alert

Recent HIPAA Breach Settlements - Lessons Learned

June 19, 2023According to the U.S. Department of Health and Human Services’ (HHS) Office for Civil Rights (OCR), the consequences for providers may include settlements of $30,000 to $240,000. OCR recently released two settlements for improper breaches of protected health information (PHI) that are good examples of the major monetary penalties that can result from common HIPAA mistakes.Client Alert

Supreme Court Issues Major False Claims Act Decision

June 5, 2023Client Alert

Telehealth Flexibility Updates: HIPAA, DEA, and CMS

May 12, 2023The Covid-19 Public Health Emergency (PHE) officially ended on May 11, 2023. But what does that mean for telehealth, a field that expanded exponentially during the PHE? Fortunately, many of the flexibilities will remain intact, at least temporarily. This client alert presents a brief overview of the timelines that providers need to follow, but for a more comprehensive review of telehealth flexibilities and when they will endClient Alert, Multimedia

WEBINAR SERIES RECAP | Ending the Public Health Emergency + Post-Pandemic Check-Up

May 10, 2023Some may take the position that the rest of the country already returned to a new “normal” following the COVID-19 pandemic.  But healthcare providers continue to implement COVID protocols and navigate the ever-changing healthcare regulations at both the federal and state levels.  It is important for healthcare providers to take time for a “Healthcare Check-Up” with the start of 2023 and the ending of the Public Health Emergency (“PHE”).
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