Updated Guidance and Resources from the IRS

July 15 tax deadline approaching

As the 2019 tax filing and payment deadline approaches (click here for more), the IRS reminds businesses and self-employed individuals that 2019 income tax liabilities as well as postponed April 15 and June 15, 2020 estimated tax payments are due July 15, 2020 (click here for more).

 


Deferral of employment tax deposits and payments through December 31, 2020

The Coronavirus, Aid, Relief and Economic Security Act (CARES Act) allows employers to defer the deposit and payment of the employer’s share of Social Security taxes and self-employed individuals to defer payment of certain self-employment taxes. These FAQs address specific issues related to the deferral of deposit and payment of these employment taxes. The FAQs will be updated to address additional questions as they arise.  Click here for more.

 


IRS provides guidance on employer leave-based donation programs that aid victims of the COVID-19 pandemic

The IRS recently provided guidance for employers whose employees forgo sick, vacation or personal leave because of the COVID-19 pandemic.

Notice 2020-46 provides that cash payments employers make to charitable organizations that provide relief to victims of the COVID-19 pandemic in exchange for sick, vacation or personal leave which their employees forgo will not be treated as compensation. Similarly, the employees will not be treated as receiving the value of the leave as income and cannot claim a deduction for the leave that they donated to their employer.  Click here for more.

Additional information about tax relief for those affected by the COVID-19 pandemic can be found clicking here.

 


Mid-year amendment to safe harbor 401(k) or 401(m) plans

Notice 2020-52 clarifies the requirements that apply to a mid-year amendment to a safe harbor 401(k) or 401(m) plan that reduces only contributions made on behalf of highly compensated employees.  This notice also provides temporary relief in connection with the ongoing Coronavirus Disease 2019 (COVID-19) pandemic from certain requirements that would otherwise apply to a mid-year amendment to a safe harbor 401(k) or 401(m) plan adopted between March 13, 2020, and August 31, 2020, that reduces or suspends safe harbor contributions.  Click here for more.