Pursuant to Section 274 of the COVID-related Tax Relief Act of 2020, the IRS recently issued Notice 2021-11 which extends the repayment dates for the payroll tax deferral relief provided under IRS Notice 2020-65 (discussed in our prior blog post here). Under IRS Notice 2020-65, deferred employment taxes had to be withheld and remitted to the IRS in substantially equivalent installments from wages or other compensation paid to employees between January 1, 2021 and April 30, 2021, with interest and penalties on unpaid deferred taxes beginning to accrue on May 1, 2021. Under Notice 2021-11, the timing for withholding and payment of these taxes is extended through December 31, 2021, and the date that interest and penalties begin to accrue on unpaid deferred taxes is delayed until January 1, 2022. Notice 2021-11 is available here.
On Friday, August 28th, just two business days prior to the September 1st effective date of the executive order (the ?Ç£Executive Order?Ç¥) directing the Treasury Secretary to defer the withholding and payment of the employee portion of Social Security taxes otherwise due on wages paid to eligible employees for the last four months of 2020, the IRS issued Notice 2020-65 (the ?Ç£Notice?Ç¥), which provides additional guidance (discussed in the following paragraph) on implementing that tax deferral. Notably, however, the Notice did not answer two key questions for employers and employees alike: (1) is the tax deferral mandatory, and (2) who is ultimately responsible for remitting any deferred taxes to the IRS when they become due (i.e., what if an employee?ÇÖs future paycheck is insufficient to cover the deferred taxes or if the employer is unable to recoup deferred taxes from a former employee). The Executive Order permits the deferral of… Continue Reading
Employee Payroll Tax Holiday or Looming Tax Nightmare: Unanswered Questions on the Payroll Tax Deferral Executive Order
Employee Payroll Tax Holiday or Looming Tax Nightmare: Unanswered Questions on the Payroll Tax Deferral Executive Order.
Executive Order Directs Agencies to Consider Expanding HRAs and Alternatives to the Public Health Insurance Marketplace
On October 12, 2017, President Trump issued an Executive Order directing the U.S. Departments of Health and Human Services, Labor, and the Treasury to ?Ç£consider proposing regulations or revising [existing] guidance?Ç¥ for health reimbursement arrangements (?Ç£HRAs?Ç¥), association health plans (?Ç£AHPs?Ç¥), and short-term coverage related to loosening existing requirements under the Affordable Care Act (?Ç£ACA?Ç¥).?á While the Executive Order does not literally order the agencies to issue regulations or change existing guidance, it is likely that the agencies will do so.?áThis process should take months, and thus the Executive Order is a signal of change rather than change itself.?áThere are few details at this time, but a high-level summary including open issues is below: HRAs ?Çô The clear intent is to enable employers to offer HRAs to current employees that can be used to purchase insurance policies from the individual insurance market.?áThis could be accomplished by either permitting HRAs to integrate… Continue Reading
President Trump signed an executive order on January 20, 2017, generally directing the heads of government agencies to halt enforcement of Affordable Care Act (?Ç£ACA?Ç¥) provisions that cause financial or regulatory burdens on a host of entities, to the extent permitted by law. While this executive order did not specifically use the word ?Ç£employer?Ç¥ in the list of entities, the list can be construed to include employers providing health coverage to employees. The executive order itself does not relieve employers of any obligations to comply with the ACA, and this action should not occur until the various federal agencies issue guidance delaying or halting the enforcement of specific ACA provisions. The Departments of HHS, Labor, and the Treasury are unlikely to take any action until their new Secretaries are confirmed. In the meantime, employers should continue to comply with the ACA pending issuance of future guidance. View the executive order.