e-News for Payroll Professionals - Special Edition Update

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Issue Number:  2020-09

Inside This Issue

1. Employers who have received a PPP loan may defer deposit and payment of the employer's share of Social Security tax
2. IRS resumes processing of paper Forms 94x and Form 8655
3. Additional signature requirement for Reporting Agents that sign/submit Forms 7200 on behalf of clients

The Paycheck Protection Program Flexibility Act, enacted on June 5, 2020, amends section 2302 of the CARES Act. It strikes the rule that would have prevented an employer from deferring the deposit and payment of the employer’s share of Social Security tax after the employer receives a decision that its PPP loan was forgiven by the lender.

Therefore, an employer that receives a PPP loan is entitled to defer the payment and deposit of the employer’s share of Social Security tax, even if the loan is forgiven.

Prior to the enactment of the PPP Flexibility Act, an employer that received a PPP loan was not permitted to defer deposit and payment of the employer’s share of Social Security tax after the receipt of the lender’s decision forgiving all or a portion of the employer’s PPP loan.

Find more information on the Deferral of employment tax deposits and payments through December 31, 2020 webpage on IRS.gov.

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The IRS is processing paper employment tax returns (Forms 941, 943, 944, 945) and Form 8655, Reporting Agent Authorizations. The Ogden and Kansas City campuses recently reopened at safe social distancing staff levels. Employees there are working on processing backlogs and new submissions of these forms.

If a Form 8655 is not yet processed, Reporting Agents can still e-file and electronically deposit on behalf of their clients. These processes never stopped.

Check the Update for Reporting Agents webpage on IRS.gov frequently for more up-to-date information.

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There is a new requirement for Reporting Agents (RAs) that sign and submit Form 7200, Advance Payment of Employer Credits Due to COVID-19. This new requirement applies to reporting agents that have the authority to sign and file 94x employment tax returns via a Form 8655, Reporting Agent Authorization.

The signatory must be the principal or responsible official listed on the RA’s e-file application. The signatory for the RA must sign, date, and print his or her name in the relevant boxes on Form 7200. In the box “Printed Title,” the signatory must include the RA’s company name or name of business as it appeared on line 9 of the Form 8655. For the complete requirements, see Employee Retention Credit Q/A-88.

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