On March 11, 2021, President Biden signed into law the American Rescue Plan Act (“ARPA”). The ARPA mandated several important changes for both employers and employees. One of these is potentially significant for both: full subsidies for employer-paid COBRA premiums. The ARPA requires employers to provide temporary, fully subsidized COBRA continuation coverage premiums for certain individuals for up to six months. Employers will be able to recover the subsidized premiums by claiming a tax credit.
The benefits provided to employers and employees are available to COBRA ...
On March 11, 2021, President Biden signed into the law the American Rescue Plan Act (“ARPA”) containing $1.9 trillion in financial stimulus. Though not highly publicized, the ARPA provides important relief related to plan funding for both single employer and multiemployer pension plans. This article will focus solely on the single employer pension plan provisions of the ARPA.
Pension plans are required to maintain certain funding levels. Funding levels are determined by a series of complex calculations usually performed by actuaries hired by plan sponsors. These ...
One of the key benefits of a Paycheck Protection Program (PPP) loan is the ability to have all or a portion of the loan forgiven. The amount of a PPP loan that will be forgiven is based initially on the qualifying costs an employer incurs during the 8 week period following loan funding (at least 75% of which must be used for payroll costs to qualify for 100% loan forgiveness). The initial forgiveness amount is then subject to reduction under a headcount test and a salary test. The headcount test and salary test reductions, however, do not apply in certain instances when headcount and salary are ...
The South Carolina Department of Employment and Workforce (SCDEW) administers the South Carolina unemployment benefit program for state residents, and which is funded by a state-wide unemployment tax on employee wages. Employers are responsible for the payment of this tax.
SCDEW, and its predecessor agency, the South Carolina Employment Commission Security Commission, have had financial difficulties raising sufficient unemployment taxes to be able to pay unemployment benefits to South Carolina workers. The financial problems became so significant that SCDEW became ...
The Internal Revenue Service (IRS) issued Revenue Procedure 2019-19 on April 19, 2019, updating the Employee Plans Compliance Resolution System (EPCRS) to expand the types of plan errors that can be corrected under EPCRS. EPCRS is available to correct plan document errors, plan operational errors, demographic errors and employer eligibility errors for qualified plans, 403(b) plans, SEPs and Simple IRAs. All of these errors put the plan at risk of tax disqualification. By utilizing EPCRS, a plan sponsor is able to put errors in the past and move forward from them knowing the ...
Employers face a constant struggle to attract and retain quality employees. This is especially true in a strong economy where jobs are plentiful and the demand for well-qualified workers is high. Historically, employer contributions to 401(k) plans have been viewed as an effective and efficient recruitment and retention tool. Unfortunately, many employers are finding this inadequate in today’s market because some employees, especially younger employees, prioritize other financial needs ahead of saving for retirement. For many young employees, student loan debt is a ...
Many employers began to receive notices from the IRS in 2018 proposing the assessment of a payment against the employer for the tax years 2015 and 2016 under Section 4980H of the Internal Revenue Code. The issuance of these notices by the IRS has now increased through 2019 to-date, and where employers may have received an initial notice in 2018 for the 2015 tax year, and now a second and additional notice proposing the assessment of a payment under Section 4980H for the 2016 tax year. Additional IRS notices for 2017 are certainly to follow.
Section 4980H(a) imposes an “assessable ...
Businesses that have employees and pay wages and salaries must withhold federal employee income taxes and the employee's share of federal employment taxes (FICA) from these wages and salaries. The employer must "match" the employee's FICA share, and these three components then become the employer's "federal tax deposit," which the employer must electronically pay to the IRS periodically. The frequency of when federal tax deposits must be made by an employer varies (weekly, bi-monthly, monthly, etc.) depending on the amount of these federal "payroll" taxes that are due.
The ...
On May 4, 2016, the IRS announced that it would begin accepting applications for the voluntary certification of professional employer organizations ("PEOs") beginning July 1, 2016. PEOs are also commonly referred to as employee leasing companies. While the requirements of the certification program may be of interest to the PEO, the designation of a PEO as a certified professional employer organization ("CPEO") should be of major interest to the employers utilizing the CPEO. This blog will review the beneficial tax treatment resulting from a PEO's certification as a CPEO.
Under ...