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Issue Number: 2020-06

Inside This Issue

1. Deferral of employment tax deposits and self-employment payments through Dec. 31, 2020 FAQs
2. New Employee Retention Credit helps employers keep employees on payroll – IRS’s Fact sheet and FAQs provide details
3. Paid sick and family leave credits FAQs
4. Share the IRS Coronavirus Tax Relief and Economic Impact Payments page
5. Technical guidance: Paycheck Protection Program –when certain expenses are no longer deductible
6. New and draft publications, forms and instructions on IRS.gov

Under the Coronavirus, Aid, Relief and Economic Security Act (CARES Act), employers can defer the deposit and payment of their share of Social Security taxes. The Act also allows self-employed individuals to defer payment of certain self-employment taxes.

The IRS created deferral of deposit and payment of employment taxes FAQs to address specific issues related to this topic.

Bookmark these FAQs and check them often as they’ll be updated to address additional questions as they arise.

Also, find more payroll-related FAQs and information on the IRS Coronavirus and Economic Impact Payments: Resources and Guidance page.

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The CARES Act encourages businesses to keep employees on their payroll by providing them an Employee Retention Credit. It also helps to make sure workers aren't forced to choose between their paychecks and the public health measures needed to combat the coronavirus.

Eligible employers can claim this credit for wages paid after March 12, 2020, and before January 1, 2021.

Fact sheet

The IRS’s Employee Retention Credit fact sheet provides important information about the credit including:

• Who are eligible employers
• What’s the amount of credit
• What are qualified wages
• How to claim the credit
• How to keep good records about the credit

FAQs

The IRS continues to update the Employee Retention Credit FAQs with new information:

• Updated FAQs #64 and #65: How eligible employers treat health care expenses
• New FAQ #79: Businesses that repay their Paycheck Protection Program loan by May 14, 2020

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The IRS posted and continues to update the paid sick and family leave credit FAQs. Stay up-to-date about these tax credits by bookmarking them and checking them often.

These credits reimburse small and midsize employers, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19 under the Families First Coronavirus Response Act.

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The IRS offers tax help for taxpayers, businesses, tax-exempt organizations and others – including health plans – affected by coronavirus (COVID-19).

Share the Coronavirus Tax Relief and Economic Impact Payments page with your clients and partners to help everyone stay informed.

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Notice 2020-32, Deductibility for Federal income tax purposes of certain otherwise deductible expenses (PDF)

This notice provides guidance regarding the deductibility of certain otherwise deductible expenses incurred in a taxpayer’s trade or business when the taxpayer receives a covered loan under the Paycheck Protection Program.

Specifically, this notice clarifies that no deduction is allowed for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a covered loan in accordance with the CARES Act. And the income associated with the forgiveness is excluded from gross income under this Act.

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New publications

• Pub 1693, SSA/IRS Reporter Newsletter
• Pub 5412, Warning: Coronavirus Related Scams
• Pub 5412-A, Economic Impact Payments: Who Needs to Take Action
• Pub 5412-B, Non-filers: Enter Payment Info Here Tool
• Pub 5412-C, Get My Payment Online Tool

Draft forms

• Form 941, Employer's Quarterly Federal Tax Return
• Form 941 (Schedule R), Allocation Schedule for Aggregate Form 941 Filers

Draft instructions

• Inst 941, Instructions for Form 941, Employer's Quarterly Federal Tax Return

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