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Issue Number: 2021-11

Inside This Issue

1. New IRS CP256V Notice – Repayment of deferred Social Security taxes under the CARES Act
2. COBRA election period and premium grace period extensions due to COVID-19
3. IRS reminds e-file providers to complete annual self-certification and URL registration
4. It’s a great time to check tax withholding
5. New forms, instructions and publications on IRS.gov

In October and November of 2021, the IRS will be sending informational-only CP256V Notices to self-employed individuals and household employers that chose to defer paying certain Social Security taxes under the CARES Act. The new notice reminds them that the first installment of deferred Social Security taxes will be due by the end of the year.

The CARES Act allowed these types of taxpayers to defer the payment of certain Social Security taxes on their Form 1040 for tax year 2020 over the next two years. Half of the deferred Social Security tax is due by December 31, 2021, and the remainder is due by December 31, 2022.

The IRS will continue to issue these courtesy notices before each installment is due – no response is needed.

Helpful IRS COVID Tax Tips on this topic:

• What employers need to know about repayment of deferred payroll taxes
• How self-employed individuals and household employers repay deferred Social Security tax
• Making payments for deferred tax reported by third party payers

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On October 6, 2021, the IRS published Notice 2021-58 to clarify the application of the extension of timeframes under certain Emergency Relief Notices to COBRA elections and premium payments during the COVID-19 National Emergency.

The Notice provides timelines and examples for calculating when individuals will need to elect and make their initial COBRA payments, based upon when these individuals elected COBRA under the Emergency Relief Notices.

Individuals can continue to elect and pay for COBRA under the pre-COVID timeframes, but the relief provided by the Emergency Relief Notices is automatically available should they need it.

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The IRS is reminding Authorized IRS e-file Providers that they must complete the annual self-certification questions to ensure they comply with Publication 1345 IRS e-file security, privacy and business standards.

Authorized IRS e-file providers owning or operating websites that collect, transmit, store or processe taxpayer information, must also register those URLs on their e-file Application. The annual certification process includes the registration of these websites.

For more information see FAQs for Authorized e-file Providers with websites.

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The final quarter of 2020 is the perfect time to remind employees, customers and partners that life brings constant changes to their financial situations. Events like marriage, divorce, a new child or home purchase can all be reasons to adjust withholding.

The IRS Tax Withholding Estimator makes it easier for everyone to have the right amount of tax withheld. The tool offers workers, as well as retirees, self-employed individuals and other taxpayers, a user-friendly, step-by-step tool for effectively tailoring the amount of income tax they have withheld from wages and pension payments.

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New forms

• Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund  
• Form 941-X (PR), Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund (Puerto Rico Version)

New instructions

• Inst 941-X, Instructions for Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund
• Inst 941-X (PR), Instructions for Form 941-X (PR), Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund (Puerto Rico Version)

New publications

• Pub 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G
• Pub 4164, Modernized e-file Guide for Software Developers and Transmitters
• Pub 5164, Test Package for Electronic Filers of Affordable Care Act (ACA) Information Returns (AIR)

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