On April 10, the IRS released final regulations to implement and provide guidance regarding new Section 224, enacted as part of the One Big Beautiful Bill Act (P.L. 119-21). Section 224 allows single filers who earn up to $150,000 annually
Tax Withholding & Reporting
The Tax Withholding & Reporting blog, published by Covington & Burling LLP, focuses on developments and guidance related to tax withholding obligations and reporting requirements under U.S. federal tax law. It covers topics such as IRS regulations on compensation deduction limitations for publicly held corporations, tax treatment of contributions and benefits under state paid family and medical leave programs, withholding rules for retirement plan distributions to U.S. taxpayers abroad, and tax implications of employer-provided work-life referral services. The blog addresses regulatory updates, compliance considerations, and practical implications for employers, employees, and payors in various withholding and reporting contexts.
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IRS Issues Proposed Regulations to Expand Limitation on Compensation Deduction for Publicly Held Corporations
On January 16, 2025, the IRS published proposed regulations to implement and provide guidance regarding amendments made to section 162(m) as part of the American Rescue Plan Act of 2021 (ARPA). These proposed regulations expand the compensation deduction limitation for…
IRS Issues Ruling on Tax Treatment of Contributions and Benefits Under State Paid Family and Medical Leave Programs
The IRS issued Rev. Rul. 2025-4 on January 15, 2025, regarding the federal income and employment tax treatment and related reporting requirements of contributions to, and benefits paid under, a mandatory state paid family and medical leave (PFML) program. The ruling…
IRS Issues Final Regulations Governing Withholding on Certain Retirement Plan and Commercial Annuity Distributions Made to U.S. Taxpayers Abroad
On October 18, 2024, the IRS issued final regulations on withholding for qualified retirement plan payments made to United States taxpayers living outside of the country. The final regulations come five years after the IRS issued proposed regulations on the…
IRS Issues FAQs Addressing Tax Treatment of Work-Life Referral Services Provided to Employees
On April 16, 2024, the IRS issued fact sheet FS-2024-13 providing answers to frequently asked questions about the tax treatment of work-life referral services provided to employees under an employer’s work-life referral program. The FAQs clarify that, under certain circumstances,…
Treasury Greenbook Includes Proposal to Alter Work Opportunity Tax Credit
Administration Proposes Increased Childcare Tax Credit for Employers
As we have been discussing in recent blog posts, the Treasury Department released its Fiscal Year 2024 General Explanations of the Administration’s Revenue Proposals, commonly called the “Green Book,” on March 9, 2023. This year’s Green Book includes…
Treasury Greenbook Includes Proposal to Raise the Additional Medicare Tax Rate for High-Income Taxpayers
Treasury Reiterates Position on “On-Demand” Pay
Last week, the Treasury Department released the “Green Book,” formally known as the General Explanations of the Administration’s Revenue Proposals. For the second year in a row, the Green Book addresses the treatment of “on-demand” pay arrangements also…
IRS Repeats Cautions Regarding Aggressive Claims for Employee Retention Credit
On March 7, 2023, the IRS issued a renewed warning to employers considering an Employee Retention Credit (“ERC”) claim. While many businesses with legitimate ERC claims have already made them, a cadre of consulting firms have come forward to, in…