In an earlier alert, we expressed concern about the applicability of Section 139. Our concern was based on the fact that the President’s declaration of an emergency on March 13, 2020, with respect to the COVID-19 pandemic was under
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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Paid Leave Measure Enacted in Response to COVID-19 Outbreak
UPDATE: President Trump signed the bill into law this evening.
This afternoon, the Senate voted 90-8 to approve the House-backed Families First Coronavirus Response Act. The legislation will provide up to ten weeks of paid FMLA leave and two…
House-Passed Coronavirus Relief Bill Leaves Many with More Questions than Answers
This weekend, the House of Representatives passed the Families First Coronavirus Response Act, a relief bill negotiated with the agencies and supported by the President. On Monday night, the House of Representatives substantively modified that bill in a follow-on…
COVID-19 Emergency Declaration: Code Section 139 Uncertain; Leave-Sharing Policies Permitted
UPDATE: We have provided an updated analysis of the issues surrounding the availability of Section 139. Our original post is below.
On March 13, 2020, the President declared the COVID-19 pandemic to be an emergency under Section 501(b) of the…
New Treasury Regulations Ease Payroll Administration Related to Employer-Provided Vehicles
For decades, employers and employees have been effectively precluded from using two of the handiest special valuation rules—the fleet-average and vehicle cents-per-mile valuation rules—to value employees’ personal use of employer-provided vehicles. The 1989 fringe benefit regulations imposed modest maximum vehicle…
IRS Releases Proposed Regulations on the Mechanics of Income Tax Withholding
Today, the IRS published proposed regulations addressing changes made by the Tax Cuts and Jobs Act of 2017 (the “TCJA”) to how an employee instructs an employer to withhold income taxes on his or her Form W-4 (Employee’s Withholding Certificate).…
Justice Department Continues Criminal Prosecutions in Employment Tax Cases
Over the last few years, the Justice Department has worked with the IRS to more aggressively prosecute cases involving employment tax noncompliance and the failure to remit trust fund taxes to the U.S. Treasury. Trust fund taxes are taxes withheld…
IRS Launches New Tax Withholding Estimator
Earlier this year, the IRS issued IR-2020-09, in which it announced the launch of a new and improved Tax Withholding Estimator. The Tax Withholding Estimator (the “Estimator”) is designed to help employees adjust their federal income tax withholdings…
IRS Issues Interim Guidance on Income Tax Withholding from Deferred Income Distributions
The IRS recently released Notice 2020-3, which provides interim guidance on default federal income tax withholding rates applicable to certain periodic payments of deferred income. The Notice also provides clarity as to how the IRS will accommodate a change…
Treasury Finalizes Section 871(m) Regulations and Further Extends Transitory Relief
On December 16, 2019, the Treasury and the IRS released final regulations under section 871(m) of the Internal Revenue Code. The regulations finalize the 2017 temporary and proposed section 871(m) regulations without any substantive change. On the same day, the…