T&K Tax Knowledge

IRS Issues Updated Guidance on Employee Retention Credit

Posted by Neely Munnerlyn

    

The IRS has expanded its informal FAQ guidance on the employee retention credit (the “ERC”) which was enacted as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The ERC is a refundable payroll tax credit for employers equal to 50% of qualified wages (including allocable qualified health plan expenses) that eligible employers pay their employees after March 12, 2020 and before January 1, 2021. The maximum amount of qualified wages that may be taken into account with respect to each employee is $10,000 (for a maximum credit of $5,000 per employee). 

Employers Should Consider Equity Compensation in Lieu of Cash

Posted by Jason Loden

   

In the current economic climate, employers should consider granting equity compensation to officers and employees in lieu of cash compensation. Subject to the terms of any existing employment agreements or similar contracts, employers may be able to reduce cash compensation paid to employees in exchange for equity incentives. While equity incentives are not typically a replacement for an employee’s base salary, they may be used as a replacement for bonuses and other cash incentives and potentially a portion of an executive’s base salary.

IRS Issues Guidance on Payroll Tax Deferral Provisions in the CARES Act

Posted by Neely Munnerlyn

 

The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) allows employers and self-employed individuals to defer payment of the employer share of the 6.2 percent social security tax that they are otherwise responsible for paying for the period beginning on March 27, 2020 (the date of enactment of the CARES Act) through December 31, 2020. It requires that the deferred taxes be paid over the following two years, with half of the amount required to be paid by December 31, 2021 and the other half to be paid by December 31, 2022.

Partnerships Can Amend 2018 and 2019 Tax Returns for COVID-19 Relief

Posted by Abbey Garber, Lee Meyercord, and Jessica Kirk

     

Earlier this week the IRS released an advanced version of Rev. Proc. 2020-23, which allows partnerships subject to the centralized audit regime to file amended tax returns and take advantage of retroactive tax relief provisions in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

IRS Issues Additional Guidance on Payroll Tax Credits

Posted by Neely Munnerlyn

  

The Families First Coronavirus Response Act (the “FFCRA”) allows an employer to claim refundable payroll tax credits for the emergency paid sick leave and emergency paid family leave that an employer is required to provide to employees who are absent from work due to the COVID-19 crisis.  On its website, the IRS has released a series of frequently asked questions (“FAQs”) which provide further information about the requirements, limitations, and application of the FFCRA payroll tax credits.

Covid-19 and Employee Benefit Plans: Frequently Asked Questions

Posted by Russell Gully, Jason Loden, Jessica Morrison, and Neely Munnerlyn

 

The COVID-19 pandemic has resulted in economic hardships for many employers and employees.  These challenges, along with a number of legislative and administrative developments, have led employers to consider making adjustments to their employee benefit programs.  To assist employers with assessing the requirements and considerations for their employee benefit programs, we have answered some commonly-asked questions in a client alert, available here.  Please contact the above authors or the TK tax attorney with whom you regularly work if you have any questions regarding the information in the client alert.

Impacts of the COVID-19 Response to Tax-Exempt Organizations

Posted by David Rosenberg, Neely Munnerlyn, and Jana Wight

     

On March 27, 2020, in response to the COVID-19 pandemic, the President signed the “Coronavirus Aid, Relief, and Economic Security Act” (“CARES Act”) in to law. The CARES Act includes the following provisions intended to provide relief to tax-exempt organizations:

Estate Planning Dos and Don’ts During a Lockdown

Posted by Bill Mureiko, Eric Reis, Barbara Ferguson, Sarah Marks, and Rachel Deming

   

During these unprecedented times, many people may be wondering about the status of their estate plans and, in particular, whether it is possible to make changes to their estate planning documents.  Our estate planning group has prepared a client alert with a few “Dos and Don’ts” to help people think through what can and cannot be done while sheltering in place.  Click here to read the client alert.

Please contact any of the above authors or the TK tax attorney with whom you regularly work if you have any questions or need assistance.

Potential Business Tax Relief in COVID-19 Legislation

Posted by Dean Hinderliter

    

The Senate and the House have each released proposed legislation to be Phase 3 of the COVID-19 economic stimulus package. This legislation, although not yet enacted, proposes the following important tax provisions in an effort to assist businesses:

Claiming Payroll Tax Credits Under the Families First Coronavirus Response Act

Posted by Neely Munnerlyn

  

The IRS has issued Information Release 2020-57 announcing that employers can begin taking advantage of the two new refundable payroll tax credits created by the Families First Coronavirus Response Act. 

The Information Release says that under guidance to be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of the qualifying sick and child care leave that they paid, rather than deposit those taxes with the IRS.  The payroll taxes that are available for retention include withheld federal income taxes, the employee share of FICA taxes, and the employer share of FICA taxes.