The Federal, State and Local Governments News is a periodic newsletter with information for federal tax matters for all types of government entities. On this Page Recent Developments Subscribe 2023 Newsletters 2021-2017 Newsletters Recent Developments Changes to guidance, law and procedures that affect federal, state and local governments. IRS increases mileage rate for remainder of 2022 The IRS announced an increase in the optional standard mileage rate effective July 1, 2022. Taxpayers may use the optional standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other purposes. 2023 inflation adjusted amounts for Health Savings Accounts Revenue Procedure 2022-24PDF provides the 2023 inflation adjusted amounts for Health Savings Accounts (HSAs) as determined under Section 223 of the Internal Revenue Code and the maximum amount that may be made newly available for excepted benefit health reimbursement arrangements (HRAs) provided under Section 54.9831-1(c)(3)(viii) of the Pension Excise Tax Regulations. For calendar year 2023, the annual limitation on deductions for: Individual with self-only coverage under a high deductible health plan is $3,850 Individual with family coverage under a high deductible health plan is $7,750 Subscribe Get email updates on the latest developments for Federal, State and Local Governments: Tax law changes Events calendar Compensation and fringe benefit issues Information return reporting Social Security Administration news and events Subscribe to email updates Expand/Collapse All 2023 February 23 Government entities can now file Form 1099 series information returns using a new online portal. The portal, known as the Information Returns Intake System, is free, secure, accurate and doesn’t require any special software. It also: allows filers to submit automatic extensions and make corrections, acknowledges receipt of the return in as early as 48 hours, keeps issuer information from year to year, and prior years filed through this platform, providing convenience to 1099 filers, and eliminates trips to the post office and can reduce office expenses. The IRS encourages businesses, including governments and organizations that now file on paper, to switch to e-filing through the platform and share in its benefits. 2022 November 22 Filing Information Returns Electronically (FIRE) The IRS is continuing its transition to the new IR-TCC Application for FIRE for customers who received their TCC(s) prior to September 26, 2021. Customers must take action to keep their existing TCCs active. Beginning September 25, 2022, FIRE TCC holders who submitted their TCC Application prior to September 26, 2021, will need to complete and submit a new application. The IR-TCC Application can be done any time between September 25, 2022, and August 1, 2023. Your TCC will remain active for use until August 1, 2023. Upon completion of your application, active TCCs assigned prior to September 26, 2021, will be added to your application. After August 1, 2023, any FIRE TCC without a completed Application will not be available for e-file. August 1, 2022 was the last day Form 4419, Revise Existing Transmitter Control Code (TCC) for Filing Information Returns Electronically (FIRE), was accepted. If you need to update your account, you will need to create a new IR-TCC account. Combined Federal/State Filing Program (CF/SF): Effective September 25, 2022, if you would like to voluntarily participate in the CF/SF program, you will need to complete the new on-line IR-TCC Application and follow the testing procedures outlined in Publication 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2GPDF. If you are an existing FIRE System customer and you complete your application by August 1, 2023, your TCC(s) will automatically be added to your IR-TCC Application. If you are already approved to participate in the CF/SF program, no action is needed. For more Information see Filing Information Returns Electronically (FIRE). 401(k) limit increases to $22,500 for 2023, IRA limit rises to $6,500 WASHINGTON — The Internal Revenue Service announced on October 21, 2022 that the amount individuals can contribute to their 401(k) plans in 2023 has increased to $22,500, up from $20,500 for 2022. The IRS today also issued technical guidance regarding all of the cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2023 in Notice 2022-55PDF, posted today on IRS.gov. For more Information see 401(k) limit increases to $22,500 for 2023, IRA limit rises to $6,500. Worker Classification 101: employee or independent contractor A business might pay an independent contractor and an employee for the same or similar work, but there are key legal differences between the two. It is critical for business owners to correctly determine whether the people providing services are employees or independent contractors. Here's some information to help business owners avoid problems that can result from misclassifying workers. An employee is generally considered anyone who performs services, if the business can control what will be done and how it will be done. What matters is that the business has the right to control the details of how the worker's services are performed. Independent contractors are normally people in an independent trade, business or profession in which they offer their services to the public. Independent contractor vs. employee Whether a worker is an independent contractor, or an employee depends on the relationship between the worker and the business. Generally, there are three categories to considerPDF. Behavioral control − Does the company control or have the right to control what the worker does and how the worker does the job? Financial control − Does the business direct or control the financial and business aspects of the worker's job. Are the business aspects of the worker's job controlled by the payer? Things like how the worker is paid, are expenses reimbursed, who provides tools/supplies, etc. Relationship of the parties − Are there written contracts or employee type benefits such as pension plan, insurance, vacation pay? Will the relationship continue and is the work performed a key aspect of the business? For more Information see Worker Classification 101: employee or independent contractor. Visit Federal, State and Local Governments Website Find tax information and resources for government entities, including tax withholding requirements, information returns and e-services, Taxpayer Identification Number (TIN) matching and employee benefits. Visit FSLG homepage Find Us on Social Media The IRS uses social media to share federal, state and local government information. This includes tax changes, scam alerts, initiatives, tax products and services, and more. IRS social media resources include: Twitter - specific topics: @IRSnews - tax announcements @IRSenEspanol - information in Spanish @IRStaxpros - for tax professionals @IRStaxsecurity - scam alerts @IRSsmallbiz - small businesses and self-employed @RecruitmentIRS - job opportunities Instagram: Access “IRSNews” at https://www.instagram.com/irsnews or the Instagram app. YouTube: Video tips in English, Spanish and American Sign Language. Facebook: News and information for taxpayers and tax return preparers. Also in Spanish. LinkedIn: IRS updates and job opportunities. Subscribe to the platform that best fits your needs. August 25 IRS increases mileage rate for remainder of 2022 The IRS announced an increase in the optional standard mileage rate for the final 6 months of 2022 in recognition of recent gasoline price increases. Taxpayers may use the optional standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other purposes, effective July 1, 2022. 2023 inflation adjusted amounts for Health Savings Accounts Revenue Procedure 2022-24PDF provides the 2023 inflation adjusted amounts for Health Savings Accounts (HSAs) as determined under Section 223 of the Internal Revenue Code and the maximum amount that may be made newly available for excepted benefit health reimbursement arrangements (HRAs) provided under Section 54.9831-1(c)(3)(viii) of the Pension Excise Tax Regulations. For calendar year 2023, the annual limitation on deductions for: Individual with self-only coverage under a high deductible health plan is $3,850 Individual with family coverage under a high deductible health plan is $7,750 Election workers: Reporting and withholding Each election year, thousands of state and local government entities hire workers to conduct primary and general elections. To understand the correct tax treatment of these workers, you need to be aware of specific statutes that apply to them as well as whether they are covered by a Section 218 Agreement. Who are election workers? Election workers are individuals hired by government entities to perform services at polling places in connection with national, state and local elections. An election worker may be referred to by other terms and titles, for example, poll worker, moderator, machine tender, checker, ballot clerk, voting official, polling place manager, absentee ballot counter or deputy head moderator. These workers may be employed by the government entity exclusively for election work or may work in other capacities as well. Compensation paid to election workers is includible as wage income for income tax purposes and may be treated as wages for Social Security and Medicare (FICA) tax purposes. Election workers may be compensated by a set fee per day or a stipend for the election period. The election period may include attending training or meetings prior to and after the election. Election workers may also be reimbursed for their mileage or other expenses. To be excludable from wages, expense reimbursements must be made under an accountable plan. For more Information see Election Workers: Reporting and Withholding. Visit Federal, State and Local Governments website Find tax information and resources for federal, state and local government entities, including tax withholding requirements, information returns, employee benefits and e-services such as tools for Taxpayer Identification Number (TIN) matching. You can also find changes in guidance, law and procedures that affect federal, state and local governments. Visit FSLG homepage May 5 Help Improve IRS.gov – Participate in a study We want to make it easier for you to use our website by improving how it’s organized. Sign up to participate in our study and tell us how you want to find the information on IRS.gov that you need. After you schedule your study session, you’ll receive an email from our research team with meeting details. Who can participate in the study You must be at least 18 years of age. You must be an employer, small business owner or retirement plan administrator, or work for a charity or other tax-exempt organization. You MAY NOT be a current or past employee of the IRS or U.S. Department of the Treasury. If you’re unable to participate in this study, there will be future opportunities to help us improve the website. If you have questions about this study, please contact us at irsgovtesting@irs.gov. IRS sends CP2100 and 2100A notices to help payers correct backup withholding errors In April, the Internal Revenue Service sent CP2100 and CP2100A notices to financial institutions, businesses or payers who filed certain types of information returns that don't match IRS records. These notices are sent twice a year; an initial mailing in September and October and a second mailing in April of the following year. CP2100 and CP2100A notices inform payers the information return is missing a Taxpayer Identification Number (TIN), has an incorrect name or a combination of both. For more information see IR-2022-87, April 15, 2022. For additional resources on backup withholding: Backup Withholding Video Learn how to respond to the CP2100 and 2100A notices timely.Backup Withholding Learn what payments are subject to backup withholding.Taxpayer Identification Number (TIN) On-Line Matching Use the TIN Matching program to match your 1099 payee information against IRS records prior to filing information returns.TIN Matching Program Video Watch the video to avoid penalties and expenses from filing invalid Forms 1099.Form 945, Annual Return of Withheld Federal Income Tax Use this form to report withheld federal income tax from nonpayroll payments. Nonpayroll payments include backup withholding.Visit Federal, State and Local Governments Website Find tax information and resources for government entities, including tax withholding requirements, information returns and e-services, Taxpayer Identification Number (TIN) matching and employee benefits. Visit FSLG homepage Section 218 and Retirement Systems Basics: Videos This four-video series helps government entities correct or prevent payroll errors related to their unique participation in Social Security and Medicare coverage. Watch the videos Government Employees SS and Medicare CoverageDetermine if a position is covered by a Section 218 Agreement. March 25 IRS Suspends Mailing The IRS is suspending the issuance of several notices generally mailed to tax-exempt or governmental entities in case of a delinquent return. Due to the historic pandemic, the IRS hasn’t yet processed several million returns filed by individuals and entities. The suspension of the notices will help avoid confusion when a filing is still in process. The IRS will continue to assess the inventory of pending returns to determine the appropriate time to resume mailing these notices. Some taxpayers and tax professionals may still receive the notices during the next few weeks. Generally, there is no need to call or respond to the notices as long as the return was filed timely. The suspended notices are: Number Name CP214 Reminder Notice About Your Form 5500-EZ or 5500-SF Filing Requirement CP217 Form 940 Not Required – Federal, State, and Local Government Agencies CP259A First Taxpayer Delinquency Investigation Notice – Form 990/990EZ/990N CP259B First Taxpayer Delinquency Investigation Notice – Form 990PF CP259D First Taxpayer Delinquency Investigation Notice – Form 990T CP259F First Taxpayer Delinquency Investigation Notice – Form 5227 CP259G First Taxpayer Delinquency Investigation Notice – Form 1120-POL CP259H First Taxpayer Delinquency Investigation Notice – Form 990/990EZ CP403 First Delinquency Notice – Form 5500 or 5500-SF CP406 Second Delinquency Notice – Form 5500 March 4 When to use Forms 1099-MISC and NEC Video Watch the new video, When to use Forms 1099-MISC and NEC, to know when to use Form 1099-MISC, Miscellaneous Information and Form 1099-NEC, Nonemployee Compensation. The video covers the 2021 updates to both forms. This video and others are available on IRSvideos.gov. January 18 IRS issues guidance regarding the retroactive termination of the Employee Retention Credit The Internal Revenue Service issued guidance for employers regarding the retroactive termination of the Employee Retention Credit. The Infrastructure Investment and Jobs Act, which was enacted on November 15, 2021, amended the law so the Employee Retention Credit applies only to wages paid before October 1, 2021, unless the employer is a recovery startup business. Notice 2021-65PDF applies to employers that paid wages after September 30, 2021 and received an advance payment of the Employee Retention Credit for those wages or reduced employment tax deposits in anticipation of the credit for the fourth quarter of 2021 but are now ineligible for the credit due to the change in the law. The notice also provides guidance regarding how the rules apply to recovery startup businesses during the fourth quarter of 2021. Businesses and government entities must report nonemployee compensation Businesses, including government entities and charities, which pay nonemployee compensation of $600 or more must use Form 1099-NEC, Nonemployee Compensation to report these payments to the IRS. Generally, payers must file Form 1099-NEC by January 31. For 2021 tax returns, there is no automatic 30-day extension to file Form 1099-NEC. However, an extension to file may be available under certain hardship conditions. Backup withholding Backup withholding is the payer's requirement to withhold taxes from payments not otherwise subject to withholding. Nonemployee compensation may be subject to backup withholding if a payee has not provided a Taxpayer Identification Number (TIN) to the payer, or the IRS notifies the payer the TIN provided doesn’t match IRS records. The current backup withholding tax rate is 24%. A TIN can be one of the following numbers: Social Security Number Employer identification Individual taxpayer identification Adoption taxpayer identification For more information, watch Backup Withholding on IRSvideos.gov. Who is an employee webinar is posted to IRS Video Portal Thank you to those who attended the live webinar in December, but if you missed it, the recording of the Who is an Employee Webinar will help you determine which workers you should treat as employees. Topics include: Common law employees Statutory employees Section 218 agreement for government entities Form SS-8 Worker classification issues: Firefighters Tax laws generally apply to firefighters in the same manner as for other types of workers. If the work firefighters do is subject to the will and control of the payer, under the common-law rules, they’re employees for Federal tax purposes, even if you call them volunteers. The determination whether workers are common-law employees or independent contractors is made by applying the same standards used for other workers. See IRS Publication 15, Employer’s Tax GuidePDF, for more information on determining whether a worker is a common-law employee. Similarly, it doesn’t matter if the firefighter is full-time, part-time, or if they’re paid on a “call basis” monthly, hourly, etc. If a worker is a common-law employee, any amounts paid that are not exempt under a special provision are wages subject to withholding for Federal income tax, Social Security, and Medicare that are reported on Form W-2. It doesn’t matter what the payments are called if the worker is a common-law employee. Employers are responsible for withholding on these wages and filing Form 941. For more information, see Issues for Firefighters. De Minimis fringe benefits In determining if a benefit is de minimis, you should always consider its frequency and its value. The essential elements of a de minimis benefit are that it is occasional or unusual in frequency and is so small that accounting for it is unreasonable or impractical. It also must not be a form of disguised compensation. De minimis benefits are excluded under Internal Revenue Code Section 132(a)(4) and include items not specifically excluded under other sections of the Code. These items include: Controlled, occasional employee use of photocopier Occasional snacks, coffee, doughnuts, etc. Occasional tickets for entertainment events Holiday gifts Occasional meal money or transportation expense for working overtime Group-term life insurance for employee, spouse or dependent with face value not more than $2,000 Flowers, fruit, books, etc., provided under special circumstances Personal use of a cell phone provided by an employer primarily for business purposes Whether an item or service is de minimis depends on all the facts and circumstances. In addition, if a benefit is too large to be considered de minimis, the entire value of the benefit is taxable to the employee, not just the excess over a designated de minimis amount. For more Information see De Minimis Fringe Benefits. 2021 November 24 Webinar: Who is an Employee? The IRS is inviting you to attend our live webinar, Who is an Employee?, on December 16, 2021, at 1:00 ET. Register for this free webinar presented by the IRS Office of Federal, State and Local Governments. Information in this webinar will help you determine which workers you should treat as employees. Topics include: Common law employees Statutory employees Section 218 agreement for government entities Form SS-8 Webinar: Reconciliation of Payroll The Office of Federal, State and Local Governments invites you to watch the Reconciliation of Payroll webinar (recorded October 14, 2021) on IRSvideos.gov. This webinar discusses when you should reconcile your payroll and which payroll amounts to use. It also explains how to reconcile gross payroll to taxable income for federal income tax and FICA. October 5 Reconciliation of Payroll Webinar You are invited to register for a free webinar on Payroll Reconciliation hosted by the Office of Federal, State and Local Governments on October 14, 2021 at 2:00 PM (ET). This webinar will cover when your payroll should be reconciled and what payroll amounts to use. It will also explain reconciling gross payroll to taxable income for federal income tax and FICA. September 8 Visit Federal, State and Local Governments Redesigned Website The IRS Office of Federal, State and Local Governments announces the new design and layout of the Tax information for Federal, State and Local Governments Website. The website is an important tax resource providing valuable information and resources for government entities. Visit the homepage at irs.gov/fslg to view the redesigned site. Reconciliation of Payroll Webinar You are invited to register for a free webinar on Payroll Reconciliation hosted by the Office of Federal, State and Local Government on October 14, 2021 at 2 p.m. (ET). This webinar will cover when your payroll should be reconciled and what payroll amounts to use. It will also explain reconciling gross payroll to taxable income for federal income tax and FICA. Tax Credits for Paid Leave Under the American Rescue Plan Act of 2021 for Leave After March 31, 2021 The American Rescue Plan Act of 2021 (ARP) allows small and midsize employers, and certain governmental employers to claim refundable tax credits that reimburse them for the cost of providing paid sick and family leave to their employees due to COVID-19, including leave taken by employees to receive or recover from COVID-19 vaccinations. The ARP tax credits are available to eligible employers that pay sick and family leave for leave from April 1, 2021, through September 30, 2021. For more on these ARP tax credits, see the fact sheet and related FAQs. FIRE System Update Coming September 2021 Any filer, including corporations, partnerships, employers, estates or trusts who files 250 or more Forms 1097, 1042-S, 1098, 1099, 3921, 3922, 5498, 8027, 8955-SSA or W-2G for any calendar year must file their information returns electronically using Filing Information Returns Electronically (FIRE) System. FIRE is the online tool used to transmit information returns and automatic extension requests to the IRS. Before filers can use FIRE, they must complete an online application to obtain a 5-digit alphanumeric code known as a Transmitter Control Code (TCC). Currently, Form 4419 is used to request a TCC. A new online application, Information Returns (IR) Application for Transmitter Control Code, is scheduled to deploy on September 26, 2021 and will replace Form 4419. The new application will be available on the FIRE page. For more information on FIRE changes, see FIRE System Update: Improving the Process and Security for Information Return (IR) Application for Transmitter Control Code (TCC).EIN Holders Must Update Any Change to Responsible Party The IRS is urging those entities with Employer Identification Numbers (EINs) to update their applications if there has been a change in the responsible party or contact information. IRS regulations require EIN holders to update responsible party information within 60 days of any change by filing Form 8822-B, Change of Address or Responsible Party - Business. It is critical that the IRS have accurate information in cases of identity theft or other fraud issues related to EINs or business accounts. For more information see IR-2021-161, July 30, 2021. Find Us on Social Media The IRS uses social media to share federal, state and local government information. This includes tax changes, scam alerts, initiatives, tax products and services, and more. IRS social media resources include: Twitter - specific topics: @IRSnews - tax announcements @IRSenEspanol - information in Spanish @IRStaxpros - for tax professionals @IRStaxsecurity - scam alerts @IRSsmallbiz - small businesses and self-employed @RecruitmentIRS - job opportunities Instagram: Access “IRSNews” at https://www.instagram.com/irsnews or the Instagram app. YouTube: Video tips in English, Spanish and American Sign Language. Facebook: News and information for taxpayers and tax return preparers. Also in Spanish. LinkedIn: IRS updates and job opportunities. Subscribe to the platform that best fits your needs. June 17 Election Workers Webinar The Tax Exempt and Government Entities Division would like to invite you to register to watch the free webinar on Reporting Election Workers Earnings on June 24, 2021 at 1:00 p.m. (ET). This webinar explains which workers should be treated as election workers and when taxes should be withheld from wages. It will also cover what should be included in earnings. For more information, see Webinars for Tax Exempt & Government Entities. Submit Forms 2848 and 8821 Online Did you know you can now electronically sign third-party authorization Form 2848, Power of Attorney, and Form 8821, Tax Information Authorization? With the new tool, Submit Forms 2848 and 8821 Online , tax professionals can now upload the forms directly to the IRS. For details, see IRS News Release or Fact Sheet 2021-1. Form W-2/SSN Data Theft: Information for Businesses and Payroll Service Providers The Tax Exempt and Government Entities Division would like to alert businesses and payroll service providers to a new email scam. This email scam uses a corporate officer's name to request employee Forms W-2 from company payroll or human resources departments. The email is sent to an employee in the payroll or human resources departments requesting a list of all employees and their Forms W-2. See the full article; Form W-2/SSN Date Theft: Information for Businesses and Payroll Services Providers, for steps to take in contacting the IRS if businesses and payroll service professionals received the email and/or lost data to this scam. Worker Classification (Independent Contractors vs. Employees) Are your payees independent contractors or are they employees? Before you can determine how to treat payments for services, you must first know the business relationship between you and the person performing the services. For more information, see Worker Classification Video or Independent Contractor (Self-Employed) or Employee? Help Us Improve IRS.gov We want to make it easier for you to use our website by improving how it's organized. Tell us how you want to find the information you need. Be a part of our study. Background and Research Goals Our goal with this study is to learn how people like you think about the things you need to do on IRS.gov – how you sort different tasks or topics into groups, and what you would call those groups. By joining this study, you'll be helping us improve the site's navigation by putting content where most people expect it to be. Your time is precious – and we want to make sure that when you go to IRS.gov, you can do what you need to quickly and easily. Find Us on Social Media The IRS uses social media to share federal, state and local government information. This includes tax changes, scam alerts, initiatives, tax products and services, and more. IRS social media resources include: Twitter - specific topics: @IRSnews - tax announcements @IRSenEspanol - information in Spanish @IRStaxpros - for tax professionals @IRStaxsecurity - scam alerts @IRSsmallbiz - small businesses and self-employed @RecruitmentIRS - job opportunities Instagram: Access "IRSNews" at https://www.instagram.com/irsnews or the Instagram app. YouTube: Video tips in English, Spanish and American Sign Language. Facebook: News and information for taxpayers and tax return preparers. Also in Spanish. LinkedIn: IRS updates and job opportunities. Subscribe to the platform that best fits your needs. May 24 The Tax Exempt and Government Entities Division would like to invite you to register to watch the free webinar on Reporting Election Workers Earnings on June 24, 2021 at 1:00 p.m. (ET). This webinar is designed to explain which workers should be treated as election workers and when taxes should be withheld from wages. It will also cover what should be included in earnings. Questions emailed to: mailto: TEGE.outreach@IRS.gov with the subject line “Pre-submitted questions for Election Worker webinar (June 24)” will be answered as time permits. The deadline for submitting questions is June 10, 2021. For more information, see Webinars for Tax Exempt & Government Entities. May 7 Live Webinar on Election Workers on June 24 The Tax Exempt and Government Entities Division would like to invite you to register to watch the free webinar on Reporting Election Workers Earnings on June 24, 2021 at 1:00 p.m. (ET). This webinar is designed to explain which workers should be treated as election workers and when taxes should be withheld from wages. It will also cover what should be included in earnings. Questions emailed to: mailto: TEGE.outreach@IRS.gov with the subject line “Pre-submitted questions for Election Worker webinar (June 24)” will be answered as time permits. The deadline for submitting questions is June 10, 2021. For more information, see Webinars for Tax Exempt & Government Entities. April 9 The Tax Exempt and Government Entities Division invites you to register for the free Taxable Fringe Benefit Essentials for Employers Webinar on April 14, 2021 at 1:00 p.m. (ET). This webinar is designed to explain what a fringe benefit is and how to value a fringe benefit. It will cover the most common fringe benefits and explain if those fringe benefits are taxable. For more information, see Webinars for Tax Exempt & Government Entities. March 17 Taxable Fringe Benefit Essentials for Employers Webinar The Tax Exempt and Government Entities Division would like to invite you to register to watch the free Taxable Fringe Benefit Essentials for Employers Webinar on April 14, 2021 at 1 p.m. (ET). This webinar is designed to explain what a fringe benefit is and how to value a fringe benefit. It will cover the most common fringe benefits and explain if those fringe benefits are taxable. For more information, see Webinars for Tax Exempt & Government Entities. Redesigned Form W-4 The 2020 Form W-4 was redesigned to reduce the form's complexity and to increase transparency and accuracy in the withholding system. While it uses the same underlying information as the old design, it replaces complicated worksheets with more straightforward questions that make accurate withholding easier for employees. Who must furnish a new Form W-4? All new employees first paid after 2019 must use the redesigned form. Existing employees who want to adjust their withholding. Existing employees that claim to be exempt from federal income tax withholding. For additional information about Form W-4, see the links below: Video: How to Use Form W-4 to Calculate Withholding Publication 15-T, Federal Income Tax Withholding Methods FAQs on the 2020 Form W-4 Improved Tax Withholding Estimator helps workers target the refund they want; shows how to fill out new 2020 W-4 What’s New with Fringe Benefits The business mileage rate for 2021 is 56 cents per mile down from 57.5 cents in 2020. You may use this rate to reimburse an employee for business use of a personal vehicle, and under certain conditions, you may use the rate under the cents-per-mile rule to value the personal use of a vehicle you provide to an employee. For more information on Fringe Benefits, if they are taxable and how they should be reported, see the links below: Publication 15-B, Employer's Tax Guide to Fringe Benefits Publication 5137, Fringe Benefit GuidePDF 403(b) Contribution Limits The limit on elective salary deferrals has not changed for 2021. The amount an employee can contribute to a 403(b) account out of salary is $19,500 for 2020 and 2021. Age 50 catch-up: A plan may permit employees who are age 50 or over at the end of the calendar year to make additional salary deferrals of $6,500 in 2020 and 2021. 15-years of service catch-up: A 403(b) plan may permit employees who have at least 15 years of service with the same eligible 403(b) employer (a public school system, hospital, home health service agency, health and welfare service agency, church, or convention or association of churches (or associated organization)), to make additional salary deferrals equal to the lesser of: $3,000, $15,000, reduced by the amount of additional elective deferrals made in prior years because of this rule, or $5,000 times the number of the employee’s years of service for the organization, minus the total elective deferrals made for earlier years. For employees eligible for both the age 50 and 15-years of service catch-ups, salary deferrals in excess of the deferral limit ($19,500 in 2020 and 2021) are first applied to the 15-year catch-up and then the age 50 catch-up. For more information about 403(b) contributions limits, see the links below: Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans) Retirement Topics – 403(b) Contribution Limits Participants Who Make Excess Salary Deferrals Find Us on Social Media The IRS uses social media to share federal, state, and local government information. This includes tax changes, scam alerts, initiatives, tax products and services, and more. IRS social media resources include: Twitter - specific topics: @IRSnews - tax announcements @IRSenEspanol - information in Spanish @IRStaxpros - for tax professionals @IRStaxsecurity - scam alerts @IRSsmallbiz - small businesses and self-employed @RecruitmentIRS - job opportunities Instagram: Access “IRSNews” at https://www.instagram.com/irsnews or the Instagram app. YouTube: Video tips in English, Spanish and American Sign Language. Facebook: News and information for taxpayers and tax return preparers, Also in Spanish. LinkedIn: IRS updates and job opportunities. Subscribe to the platform that best fits your needs. March 11 Taxable Fringe Benefit Essentials for Employers Webinar The Tax Exempt and Government Entities Division would like to invite you to register to watch the free Taxable Fringe Benefit Essentials for Employers Webinar on April 14, 2021 at 1:00 p.m. (ET). This webinar is designed to explain what a fringe benefit is and how to value a fringe benefit. It will cover the most common fringe benefits and explain if those fringe benefits are taxable. For more information, see Webinars for Tax Exempt & Government Entities. Find Us on Social Media The IRS uses social media to share federal, state, and local government information. This includes tax changes, scam alerts, initiatives, tax products and services, and more. IRS social media resources include: Twitter - specific topics: @IRSnews - tax announcements @IRSenEspanol - information in Spanish @IRStaxpros - for tax professionals @IRStaxsecurity - scam alerts @IRSsmallbiz - small businesses and self-employed @RecruitmentIRS - job opportunities Instagram: Access “IRSNews” at https://www.instagram.com/irsnews or the Instagram app. YouTube: Video tips in English, Spanish and American Sign Language. Facebook: News and information for taxpayers and tax return preparers, Also in Spanish. LinkedIn: IRS updates and job opportunities. Subscribe to the platform that best fits your needs. March 1 Who is entitled to Covid‐19 Relief Credits? The Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act provided two new employer tax credits: Sick and Family Leave Credit Employee Retention Credit. As a reminder, federal, state and local government entities, and any agencies or instrumentalities of those entities, are not entitled to either of these credits. However, tribal governments may be eligible to claim both the Sick and Family Leave Credit and the Employee Retention Credit. For more information on eligible employers, see: What is an Eligible Employer? (FFCRA - Sick & Family Leave Credits) – Questions 19b, 19c and 19g. Determining Which Employers are Eligible to Claim the Employee Retention Credit (CARES Act) – Questions 18, 19, 21 and 21a. If a Form 941, Employer's Quarterly Federal Tax Return, claiming either of these credits has been filed by or on behalf of a federal, state or local government entity, or any agency or instrumentality of a government entity, the claimed credits will be disallowed and result in a balance due tax liability. The following information provides more details on the credits: IR‐2020‐62, IRS: Employee Retention Credit available for many businesses financially impacted by COVID-19 COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs FAQs: Employee Retention Credit under the CARES Act February 25 Thank You for Attending the Form 1099-NEC Awareness Day Event The IRS Tax Exempt and Government Entities Division and the Office of Indian Tribal Governments thanks the over 5,000 participants who attended the Form 1099-NEC Awareness Day Zoom meetings January 12, 14 and 21, 2021. These meetings provided an overview of the Form 1099-Non-Employee Compensation (NEC) and reporting requirements for the 2021 filing season. Check out these links to resources discussed during the presentations: Online Tools and Resources: 2020 Instructions for Forms 1099-MISC and 1099-NEC General Instructions for Certain Information Returns (Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G) Taxpayer Identification Number (TIN) Matching Filing Information Returns Electronically (FIRE) Educators can now deduct out-of-pocket expenses for COVID-19 protective items Eligible educators can deduct unreimbursed expenses for COVID-19 protective items to stop the spread of COVID-19 in the classroom. COVID-19 protective items include, but are not limited to: face masks; disinfectant for use against COVID-19; hand soap; hand sanitizer; disposable gloves; tape, paint or chalk to guide social distancing; physical barriers (for example, clear plexiglass); air purifiers; and other items recommended by the Centers for Disease Control and Prevention (CDC) to be used for the prevention of the spread of COVID-19. Rev. Proc. 2021-15PDF provides guidance related to educators and their expenses under the COVID-related Tax Relief Act of 2020, which was enacted as part of the Consolidated Appropriations Act, 2021. The new law clarifies that unreimbursed expenses paid or incurred after March 12, 2020, by eligible educators for protective items used to stop the spread of COVID-19 in the classroom qualify for the educator expense deduction. The educator expense deduction rules permit eligible educators to deduct up to $250 of qualifying expenses per year ($500 if married filing jointly and both spouses are eligible educators, but not more than $250 each). Eligible educators include any individual who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during a school year. This deduction is for expenses paid or incurred during the tax year. Taxpayers claim the deduction on Form 1040, Form 1040-SR or Form 1040-NR (attached Schedule 1 (Form 1040)). Find Us On Social Media The IRS uses social media to share federal, state and local government information. This includes tax changes, scam alerts, initiatives, tax products and services, and more. IRS social media resources include: Twitter - specific topics: @IRSnews - tax announcements @IRSenEspanol - information in Spanish @IRStaxpros - for tax professionals @IRStaxsecurity - scam alerts @IRSsmallbiz - small businesses and self-employed @RecruitmentIRS - job opportunities. Instagram: Access “IRSNews” at https://www.instagram.com/irsnews or the Instagram app. YouTube: Video tips in English, Spanish and American Sign Language. Facebook: News and information for taxpayers and tax return preparers, Also in Spanish. LinkedIn: IRS updates and job opportunities. Subscribe to the platform that best fits your needs to supplement your GovDelivery subscription. January 8 The Tax Exempt and Government Entities Division (TEGE) invites you to join us for a free Zoom awareness meeting on either January 12, 2021 or January 14, 2021. This meeting is designed to help governmental entities understand the new Form 1099-NEC (Non-Employee Compensation) reporting requirements for the 2020 filing season. Each session is limited to the first 950 participants. Dates and Times: Several dates and times offered to maximize the reach of the event. Tuesday January 12, 2021 9 a.m. Eastern - Meeting ID: 161 617 7980 2 p.m. Eastern - Meeting ID: 160 527 4160 Thursday January 14, 2021 11 a.m. Eastern - Meeting ID: 160 684 3808 4 p.m. Eastern - Meeting ID: 161 660 1009 Participants may also join via voice call using the following information: Dial by your location and input the meeting ID when prompted: 669-254-5252 US (San Jose) 646-828-7666 US (New York) 2020 December 14 Reporting nonemployee compensation and backup withholding The IRS reminds employers that starting in tax year 2020, payers must complete the new Form 1099-NEC, Nonemployee Compensation, to report any payment of $600 or more to a payee. Generally, payers must file Form 1099-NEC by January 31. For 2020 tax returns, the due date is February 1, 2021. There is no automatic 30-day extension to file Form 1099-NEC. However, an extension to file may be available under certain hardship conditions. Also, nonemployee compensation may be subject to backup withholding if a payee has not provided a taxpayer identification number to the payer or the IRS notifies the payer that the TIN provided was incorrect. Guidance on reporting qualified sick and family leave wages paid The IRS provided guidance in Notice 2020-54PDF to employers requiring them to report the amount of qualified sick and family leave wages paid to employees under the Families First Coronavirus Response Act (FFCRA) on Form W-2. The Notice also provides employers with optional language to use in the Form W-2 instructions for employees. Additional information about tax relief for those affected by the COVID-19 pandemic can be found on IRS.gov. Do you hire election workers? Each election year, thousands of state and local government entities hire workers to conduct primary and general elections. Compensation paid to election workers is income and may be subject to taxes and reporting requirements. Election Workers: Reporting and Withholding will help you understand their unique reporting and withholding requirements and which election workers may be covered by a Section 218 Agreement. Deposit Requirements for Employment Taxes, Notice 931 Before the beginning of each calendar year, you must determine if you should use a monthly or semiweekly deposit schedule for employment taxes. The deposit schedule you must use is based on the total tax liability you reported during a lookback period. Your deposit schedule isn't determined by how often you pay your employees or make deposits. Instead of making deposits during the current quarter, you can pay your total Form 941 tax liability when you timely file Form 941 if: Your total Form 941 tax liability for either the current quarter or the preceding quarter is less than $2,500, and You don't incur a $100,000 next-day deposit obligation during the current quarter. Refer to Notice 931PDF for deposit requirements and more information about the lookback period for calendar year 2021. Check out Filing and Paying to find additional information on paying and depositing your employment taxes. October 21 The IRS Tax Exempt and Government Entities Division invites you to view the Worker Classification webinar (recorded October 7, 2020) on IRSvideos.gov. This webinar is designed to help government and private sector entities determine whether a worker is an employee or independent contractor. It will also cover Form SS-8, Classification Settlement Agreements and what to do if an individual is an employee. Webinars on IRSvideos Check out this presentation on payroll reporting. 10 Minutes on Reconciling Forms 941/W-3/W-2 to Gross Payroll Learn about reconciling your payroll to eliminate discrepancies and reduce the number of W-2C’s filed. Find these presentations and more on IRSvideos.gov. October 5 Reminder: Worker Classification Webinar on October 7 The Tax Exempt and Government Entities Division invites you to register for the free Worker Classification Webinar on October 7, 2020 at 1:00 p.m. (ET). This webinar is designed to help government and private sector entities understand the definition of an employee and determine whether a worker is an employee or independent contractor. It will also cover Form SS-8, Classification Settlement Agreements and what to do if an individual is an employee. Questions emailed to: TEGE.outreach@IRS.gov with the subject line “Pre-submitted questions for the Workers Classification webinar (October 7)” will be answered as time permits. For further details, see Webinars for Tax Exempt & Government Entities. September 29 Reminder: Worker Classification Webinar on October 7 The Tax Exempt and Government Entities Division invites you to register for the free Worker Classification Webinar on October 7, 2020 at 1:00 p.m. (ET). This webinar is designed to help government and private sector entities understand the definition of an employee and determine whether a worker is an employee or independent contractor. It will also cover Form SS-8, Classification Settlement Agreements and what to do if an individual is an employee. Questions emailed to: TEGE.outreach@IRS.gov with the subject line “Pre-submitted questions for the Workers Classification webinar (October 7)” will be answered as time permits. For further details, see Webinars for Tax Exempt & Government Entities. Application Deadline for TEGE Commissioner Extended to October 9 The IRS has extended the application deadline for the Tax Exempt and Government Entities Division Commissioner position until October 9, 2020. The IRS encourages interested applicants to visit USAjobs.gov for full details. For a complete application, applicants need to include the following documents: Resume Separate document for Executive Core Qualifications (ECQ) narrative Separate document for Technical Competencies (TC) narrative SF-50 for current or former federal employees If a current or former Senior Executive Service (SES) employee, SF-50 should indicate your SES status Additional details are available on USAJobs.gov, including more information for current and former federal Senior Executives interested in applying. September 16 Worker Classification Webinar The Tax Exempt and Government Entities Division would like to invite you to register to watch the free Worker Classification Webinar on October 7, 2020 at 1:00 p.m. (ET). This webinar is designed to help government and private sector entities understand the definition of an employee and determine whether a worker is an employee or independent contractor. It will also cover Form SS-8, Classification Settlement Agreements and what to do if an individual is an employee. Questions emailed to: TEGE.outreach@IRS.gov with the subject line “Pre-submitted questions for the Workers Classification webinar (October 7)” will be answered as time permits. For further details, see Webinars for Tax Exempt & Government Entities. September 17 deadline approaching to apply for TE/GE Commissioner With the Sept. 17 application deadline approaching, the IRS is seeking qualified candidates to serve as the commissioner of the Tax Exempt and Government Entities division. One of the four business operating divisions, TE/GE serves a diverse population of entities that include small local community organizations, major universities and philanthropic organizations, hospitals, large pension funds, small business retirement plans, local and state government, participants in complex tax-exempt bond transactions, and Indian tribal governments and tribal associations. This Senior Executive Service position involves working closely with the IRS’s top leadership and, in turn, providing executive leadership and direction to a nationwide staff of executives and managers to continue supporting creative and innovative solutions to the challenges facing the IRS as it deals with TE/GE’s important stakeholders. The open position follows the August announcement by Tammy Ripperda, the current TE/GE commissioner, that she plans to retire from the government at the end of September following 32 years of public service. During her career, Tammy has been at the forefront of many improvement initiatives for the IRS’s tax enforcement functions. In her numerous executive positions, she has served in three of the IRS’s four operating divisions. For more information and how to apply, see the posting on USAJOBS.gov. The application period for this Senior Executive Service position runs through Sept. 17, 2020. All qualified candidates are encouraged to apply. July 9 IRS Letter 2800C and Employer Federal Income Tax Withholding IRS sends Letter 2800C, also called a “lock-in” letter, to instruct employers to follow a specific federal income tax withholding arrangement for an employee who doesn’t have enough income taxes withheld from their wages. The employee has 60 days from the date of the letter to discuss the determination with the IRS before the withholding arrangement takes effect. Starting 60 days after the date of the letter, the withholding rate in Letter 2800C is locked in and the employer must begin withholding from the employee at that new rate. There are two situations in which the employer may withhold at a rate that is different from the rate in Letter 2800C. The first occurs if the employee submits a new Form W-4 with a statement supporting a decrease in their withholding rate and the IRS approves. In this situation, the IRS will inform the employer and the employee with a Letter 2808C. Letter 2808C specifies the changes to the employee’s withholding rate that have been approved by the IRS. The changes in Letter 2808C are effective immediately. There is no 60-day waiting period. The second situation involves increasing the rate of withholding above what is stated in the “lock-in” letter. This situation occurs if the employee submits a new Form W-4 that results in more withholding than the rate in the “lock-in” letter. In this situation, the employer may accept and process the employee’s request. The employer must disregard any new Form W-4 the employee submits that decreases the amount of withholding. Employers should block the employee’s access to make changes to online Forms W-4 if that access may allow the employee to decrease their withholding below the rate specified in a Letter 2800C. Employers that do not withhold federal income tax from their employee as instructed by a “lock-in” letter will be liable for paying the additional tax required to be withheld. You can find more information at Withholding Compliance Q&As and view our Lock-In Letter Video. February 19 Revised Form W-4 and new Income Tax Withholding Assistant for Employers The Internal Revenue Service has revised Form W-4 and launched two new online tools: The Income Tax Withholding Assistant for Employers (obsolete) is a spreadsheet-based tool designed to help employers, especially small businesses, easily transition to the redesigned withholding system (no longer based on withholding allowances), which went into effect on Jan. 1. IRS has posted a webinar, Understanding the 2020 Form W-4 and How to Use it to Calculate Withholding (video, 1:10:42), to the IRS video portal. A new and improved Tax Withholding Estimator that incorporates the changes from the redesigned Form W-4, Employee’s Withholding Certificate, that employees can fill out and give to their employers this year. The IRS urges everyone to see if they need to adjust their withholding by using the Tax Withholding Estimator to perform a Paycheck Checkup. Watch our video (2:00) on the IRS Tax Withholding Estimator. New filing addresses for Form 941, employer’s quarterly federal tax returns The addresses for where to file paper Form 941 tax returns have changed. The IRS recommends checking any pre-printed envelopes used to mail business returns to ensure the correct address and avoid delays. Or, you may file and pay electronically for the quickest processing. Recent IRS News Releases IRS recommends business owners e-file payroll tax returns IRS provides tax inflation adjustments for tax year 2020 Feb. 20 IRS webinar focuses on gig economy IRS urges tax professionals, taxpayers to protect tax software accounts with multi-factor authentication Issue snapshot Qualified Tuition Reduction IRS videos Individual Taxpayer Identification Number (ITIN) (video, 2:30) How to complete Form W-9 (video, 6:42) IRS launches Taxpayer First Act webpage and email account The Taxpayer First Act of 2019 expands and strengthens taxpayer rights. The Act also requires the agency to develop a comprehensive customer service strategy, modernize its technology and enhance its cyber security. The IRS is requesting commentary from taxpayers, including those in the small business and self-employed industries. Those interested in providing feedback on reorganization or other components of the TFA are encouraged to send it to TFAO@irs.gov. For more information about the TFA, visit IRS.gov/taxpayer-first-act. 2019 November 25 We are looking for feedback to improve the Federal, State or Local government section of IRS.gov to help you easily find what you need. We want IRS.gov to be the place our customers come for correct and timely information to meet their tax obligations. Your participation will help us improve our navigation menus and labeling, which will save you valuable time. The study takes approximately 10-15 minutes to complete. Responses are confidential and anonymous. Note: This study is now closed. We constantly strive to provide excellent service. Thank you for helping us improve our website! Cost-of-Living Adjustments The IRS released the 2020 COLA limits for retirement plans and IRAs. See which contribution, deferral and compensation limits have increased for 2020. You may also want to review the tax year 2020 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. October 4 CP 2100 Notices The IRS will issue a CP2100 or CP2100A Notice if the payee’s name and Taxpayer Identification Number (TIN) on the information return filed does not match IRS records. This notice informs payers they may be responsible for beginning backup withholding, if they haven’t already done so. Publication 1281, Backup Withholding on Missing and Incorrect Name/TIN(s)PDF, contains all the information payers need to comply with backup withholding requirements. These resources will help you avoid receiving a CP2100: About General Instructions for Certain Information Returns helps you file correct Forms 1099 W-9 Saves Time and Money discusses the benefits of securing Form W-9 from service vendors TIN Matching Video explains the free Taxpayer Identification Number (TIN) On-Line Matching program offered by the IRS Social Security Number Verification Service Do you hire election workers? Each election year, thousands of state and local government entities hire workers to conduct primary and general elections. Compensation paid to election workers is income and may be subject to income tax and FICA taxes as well as reporting requirements. Election Workers: Reporting and Withholding will help you understand their unique reporting and withholding requirements and which election workers may be covered by a Section 218 Agreement. July 31 Taxpayer Identification Matching (TIN) Tools Learn about: The online TIN Matching Program and the Social Security Number Verification Service May 30 Have questions on whether government entities need a tax-exempt number or a determination letter? Our Government Information Letter webpage and video can answer: How can you prove your “tax-exempt” status as a government entity? Why don’t government entities require a determination letter from the IRS to secure tax-exempt status? What does it mean to be a dual-status entity? How do I know if someone I hire is an employee or an independent contractor? Government employers have unique employment tax classification issues. Worker classification can be difficult but our Employer and Pay Related Issues webpages and TE/GE Worker Classification: Employee or Independent Contractor? video will help you by answering common questions. You can also find links to IRS payroll forms and publications that include information specific to government entities in the Public Employer's Toolkit. IRS Nationwide Tax Forums Offer More than Continuing Education Educational seminars are just one benefit you get when you attend the 2019 IRS Nationwide Tax Forums. Others include the Case Resolution Program, opportunities to talk with IRS subject matter experts, workshops, and networking opportunities with your colleagues. Register now at www.irstaxforum.com. Paycheck Checkup Please help IRS spread the word that following major tax law changes, workers should review their withholding to make sure they have the right amount of tax taken out of their paychecks. March 29 Tax Information for Federal, State and Local Governments On IRS.gov/fslg, you’ll find information for government employers on getting started, information returns, the filing process, employment tax due dates and information return penalties. Watch the videos on the IRS Video Portal for more information on how federal, state and local government employers can meet their tax compliance requirements. Taxpayer Identification Number (TIN) Matching Tools Read about the TIN Matching tools you can use to check the TIN furnished by the payee against the name/TIN combination in the IRS database before filing Forms 1099 and W-2. See Publication 2108-A, On-Line Taxpayer Identification Number (TIN) Matching ProgramPDF. Tax Cuts and Jobs Act Learn more about the provisions of the Tax Cuts and Jobs Act that affect federal, state and local government employers at IRS.gov/taxreform. TE/GE Fiscal Year 2019 Program Letter The 2019 Program LetterPDF shares where we are heading in the new fiscal year, including executing compliance strategies, building better processes, and providing useful information and guidance on the Tax Cuts and Jobs Act. TE/GE Fiscal Year 2018 Accomplishments Letter The Accomplishments LetterPDF lists each TE/GE functions’ accomplishments under our compliance program. Be prepared to validate your identity if contacting the IRS Taxpayers and tax professionals will be asked to verify their identities if they call the IRS; having the right information can save you time. The Dirty Dozen represents the worst of the worst tax scams Compiled annually, the “Dirty Dozen" lists a variety of common scams that taxpayers may encounter anytime but many of these schemes peak during filing season as people prepare their returns or hire someone to help with their taxes. TE/GE job announcements The IRS/Department of Treasury has announced revenue agent (GS 05-11) openings in multiple locations for both Exempt Organizations and Employee Plans. These announcements are open on USAJOBS until January 29, 2020. Apply today to become part of our team. Internal Revenue Agent (Exempt Organizations) Internal Revenue Agent (Employee Plans) 2018 October 26 Election Workers: Reporting and Withholding Each election year, state and local government entities hire temporary workers to conduct primary and general elections. Election workers are subject to unique reporting and withholding requirements and may be covered by a Section 218 Agreement. IRS Videos Watch the latest presentations made for federal, state and local governments. Why File Form 1099-MISC – Learn about the basic filing requirements for reporting payments on Form 1099-MISC. Taxpayer Identification Number (TIN) Matching Program (obsolete) – Use TIN Matching to validate whether the TIN and name combinations provided on Forms W-9 match IRS tax filing records prior to submitting related information returns. 10 Minutes on Reconciling Forms 941/W-3/W-2 to Gross Payroll – Employers who reconcile payroll can avoid discrepancies by ensuring that employees’ wages and taxes reported to the IRS and the Social Security Administration match. Find these presentations and more on the IRS Video Portal. May 24 Issue Snapshots Issue Snapshots are IRS employee job aids that provide analysis and resources along with audit tips or issue indicators for technical tax issues. The most recent Issue Snapshots for federal, state and local government employers are: Third Party Payer Arrangements - Professional Employer Organizations – An introduction to Professional Employer Organizations and the related employment tax responsibilities. Third Party Payer Arrangements - Payroll Service Providers and Reporting Agents – An introduction to Payroll Service Providers and Reporting Agents and the employment tax roles of each. Common Paymaster – An explanation of the basic components of a common paymaster arrangement that may enable a related corporation (the common paymaster) to be treated as a single employer for purposes of the FICA and FUTA wage bases. IRS Videos Watch the latest recorded webinars for federal, state, and local governments. Find these presentations and more on the IRS Video Portal. Correcting Employment Taxes Using Form 941-X – Learn how to use Form 941-X to correct errors on employee wages; income tax withheld from wages; taxable Social Security wages and tips; taxable Medicare wages and tips subject to Additional Medicare Tax withholding. IRS “B” Notices and Backup Withholding (obsolete) – Learn about backup withholding, who is responsible and how it’s reported, plus what to do with a B-Notice. 2017 December 18 Early Due Dates for W-2, W-3 and Form 1099-MISC Employers face a January 31, 2018, due date for filing 2017 Forms W-2 and W-3 with the Social Security Administration. This date applies to both electronic and paper filers. Form 1099-MISC is due to the IRS and individuals by January 31 when reporting non-employee compensation payments in box 7. Penalties for failure to file correct information returns or furnish correct payee statements have increased and are now subject to inflationary adjustments. These increased penalties are effective for information returns required to be filed after December 31, 2015. Form 1098-T Reporting Changes and Limited Penalty Relief for 2017 Returns Eligible educational institutions are required to report the total amount of payments received for qualified tuition and related expenses from all sources during the calendar year on Form 1098-T, Tuition Statement. Announcement 2016-42PDF provides relief from penalties under Section 6721 and 6722 to 2017 Forms 1098-T. The IRS will not impose penalties on eligible education institutions that report the aggregate amount billed (instead of amount received) for qualified tuition and related expenses on 2017 Form 1098-T. November 6 Issue Snapshots Issue Snapshots are employee job aids that provide analysis and resources along with audit tips or issue indicators for a given technical tax issue. The most recent Issue Snapshots for federal, state, and local governments are: Taxpayer Identification Matching Tools Learn how to perfect your payee data before filing Forms 1099 and W-2 using the IRS Taxpayer Identification Number (TIN) Matching Program and the Social Security Number Verification Service offered by the Social Security Administration. Third Party Payer Arrangements Many employers use a third party to perform acts such as withholding, reporting and paying federal employment taxes on wages paid for the employer. Learn about some of the issue indicators and audit tips used on audits of these employers. Student FICA Exception FICA tax generally applies to wages paid to an employee on account of employment. Learn when the FICA exception applies to an employee who has the status of a student. IRS Videos Watch the latest videos made for federal, state, and local governments. Find these presentations and more on the IRS Video Portal. 10 Minutes on Reconciling Forms 941/W-3/W-2 to Gross Payroll Employers who reconcile payroll can avoid discrepancies by ensuring that employees’ wages and taxes reported to the IRS and Social Security Administration match. Backup Withholding: When and Why Learn when you need to backup withhold, how to report and pay backup withholding to the IRS, how to furnish that information to the payee, and what happens if you don’t backup or withhold when it’s required. September 25 The IRS is providing several types of tax relief for those affected by hurricanes hitting Texas, Florida, Georgia, Puerto Rico and the U.S. Virgin Islands. We’re monitoring the situation closely to resolve potential tax related issues as they’re identified. IRS Gives Tax Relief to Victims of Hurricane Harvey; Parts of Texas Now Eligible Hurricane Harvey victims in parts of Texas have until Jan. 31, 2018, to file certain individual and business tax returns and make certain tax payments. This relief also applies to Form 5500 series returns of eligible taxpayers. IRS Gives Tax Relief to Victims of Hurricane Irma; Additional Relief Planned Hurricane Irma victims have until Jan. 31, 2018, to file certain individual and business tax returns and make certain tax payments. This relief also applies to Form 5500 series returns of eligible taxpayers. Retirement Plans Can Make Loans, Hardship Distributions to Victims of Hurricane Harvey The IRS relaxed procedural and administrative rules for retirement plan loans and hardship distributions to certain participants in 401(k), 403(b) and 457(b) plans. Retirement plans can provide this relief for participants who are victims of Hurricane Harvey or for certain family members who lived or worked inside the disaster area. Like Harvey, Retirement Plans Can Make Loans, Hardship Distributions to Victims of Hurricane Irma The IRS announced that 401(k)s and similar employer-sponsored retirement plans can make loans and hardship distributions to victims of Hurricane Irma and members of their families. Beware of Fake Charity Scams Relating to Hurricanes Harvey and Irma Fake charity scams proliferate after disasters like Hurricane Harvey and Hurricane Irma. We encourage you to seek out recognized charitable groups for your donations.
