The IRS has issued temporary and proposed regulations relating to voluntary withholding agreements. Code Sec. 3402(p) allows for voluntary income tax withholding agreements. Code Sec. 3402(p)(3) authorizes the IRS to provide regulations for withholding: (1) from remuneration for services performed by an employee for the employee's employer that does not constitute wages; and (2) from any other payment with respect to which the IRS finds that withholding would be appropriate, if the employer and employee, or the person making and the person receiving the other type of payment, agree to withholding.
New temporary regulations allow the IRS to issue guidance by publication in the Internal Revenue Bulletin (I.R.B.) describing other payments for which withholding under a voluntary withholding agreement would be appropriate and authorizing payors to agree to withhold income tax on those payments if requested by the payee. This guidance will provide the requirements for the form and duration of such agreements with respect to specific types of payments. The text of the temporary regulations serves as the text of the proposed regulations.
Expanding the use of voluntary withholding agreements to payments designated by the IRS as eligible for voluntary withholding will allow taxpayers to use the withholding regime (rather than the estimated tax payment process) to meet their tax payment obligations on a timely basis, minimize the risk of underpayment of taxes, and achieve administrative simplification for taxpayers and the IRS.
Written or electronic comments and requests for a public hearing must be received by February 25, 2014. Submissions should be sent to: CC:PA:LPD:PR (REG-146620-13), Room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, D.C. 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8:00 a.m. and 4:00 p.m. to CC:PA:LPD:PR (REG-146620-13), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, D.C., or sent electronically via the Federal eRulemaking Portal at http://www.regulations.gov (IRS REG-146620-13).
The temporary and proposed regulations apply on and after November 27, 2013, for a period of three years, at which time the regulations expire. (T.D. 9646, 78 FR 71476, November 29, 2013; Proposed Regulations, NPRM REG-146620-13, 78 FR 71542, November 29, 2013.)(Read Intelliconnect) »
The Minnesota Department of Revenue has revised the personal income tax withholding fact sheet on reciprocity. The guidance document explains the reciprocity exemption under Minnesota's agreements with Michigan and North Dakota; personal income tax withholding for Minnesota and an employee's state of residence; reporting information on the company's Minnesota withholding tax return; completion of Form W-2; penalties; and other matters. (Withholding Tax Fact Sheet No. 20, Minnesota Department of Revenue, November 2013.)(Read Intelliconnect) »
A professional employer organization (PEO) was not eligible to claim the Code Sec. 45B income tax credit for employer FICA tax paid on tips received by employees of its food or beverage business clients. Code Sec. 45B(a) provides that the taxpayer who incurs the tax imposed by Code Sec. 3111 (the employer portion of the FICA tax) is entitled to the credit. Generally, the taxpayer who incurs the employer portion of FICA tax is the common law employer.
Even if another entity could be an "employer" with regard to the FICA tax on the tips, under the facts and circumstances presented, the PEO was not the employer of its clients’ employees. Since the PEO was neither the common law nor the statutory employer of its clients’ employees for the tax years at issue, the PEO did not incur the employer portion of the FICA with regard to the tips received by those employees and was not entitled to claim the credit.
That the PEO filed aggregate employment tax returns for all of its clients under its own FEIN and furnished all of its clients’ employees with W-2s, was not determinative of its status as an employer. The clients controlled their worksites and were responsible for day-to-day supervision of the employees. The clients were also responsible for reporting the employees’ wages and transferring the payroll amounts to the PEO for processing. Moreover, the clients were required to transfer funds to the PEO before the PEO would issue payroll checks to the employees; therefore, the PEO was not in control of the wage payments because they were contingent upon the PEO having first received funds from the client. )
To the extent that the PEO in fact made wage payments to a client’s employees without first receiving the funds to make payroll from its client, the PEO may have been in control of the payment of wages for those periods. However, there was no evidence that the PEO paid wages to employees of its food or beverage establishment clients before receiving funds from the clients. (Technical Advice Memorandum 201347020, LTR Report Number 1916, November 27, 2013.)(Read Intelliconnect) »
The taxable wage base in Colorado for 2014 will be $11,700, up $400 from the 2013 taxable wage base amount of $11,300 (DLE Communication, Colo. ¶1205).(Read Intelliconnect) »
The U.S. Department of Labor (DOL) produces trigger notices indicating which states qualify for EUC08 benefits, and provides the beginning and ending dates of payable periods for each qualifying state. The trigger notices covering state eligibility for this program can be found at: http://ows.doleta.gov/unemploy/claims_arch.asp.
The following changes have occurred since the publication of the last notice regarding the states’ EUC08 trigger status:
Alaska triggered “off” Tier 3 of EUC08 effective August 24, 2013. Based on data from Alaska for the week ending August 3, 2013, the 13-week insured unemployment rate in Alaska was 3.9%, falling below the 4.0% trigger rate threshold to remain “on” in Tier 3 of EUC08. The week ending August 24, 2013, was the last week in which EUC08 claimants in Alaska who had exhausted Tier 2, and were otherwise eligible, could establish Tier 3 eligibility.
Mississippi triggered “off” Tier 4 of EUC08 effective September 14, 2013. Based on data released by the Bureau of Labor Statistics (BLS) on August 19, 2013, the three-month average, seasonally adjusted total unemployment rate in Mississippi was 8.9%, falling below the 9.0% trigger rate threshold to remain “on” in Tier 4 of EUC08. The week ending September 14, 2013, was the last week in which EUC08 claimants in Mississippi who had exhausted Tier 3, and were otherwise eligible, could establish Tier 4 eligibility.
Wisconsin also triggered “off” Tier 3 of EUC08 effective September 14, 2013. Based on data released by the BLS on August 19, 2013, the three-month average, seasonally adjusted total unemployment rate in Wisconsin was 6.9%, falling below the 7.0% trigger rate threshold to remain “on” in Tier 3 of EUC08. The week ending September 14, 2013, was the last week in which EUC08 claimants in Wisconsin who had exhausted Tier 2, and were otherwise eligible, could establish Tier 3 eligibility.
Information for claimants. The duration of benefits payable in the EUC08 program, and the terms and conditions under which they are payable, are governed by Public Laws 110-252, 110-449, 111-5, 111-92, 111-118, 111-144, 111-157, 111-205, 111-312, 112-96, and 112-240, and the operating instructions issued to the states by the DOL. In the case of a state beginning or concluding a payable period in EUC08, the State Workforce Agency (SWA) will furnish a written notice of any change in potential entitlement to each individual who can establish, or has established, eligibility for benefits (20 CFR 615.13 (c)(1) and (c)(4)).
Individuals who believe they may be entitled to benefits in the EUC08 program, or who wish to inquire about their rights under the program, should contact their SWA.
For further information, contact Tony Sznoluch, U.S. DOL, ETA, Office of Unemployment Insurance, 200 Constitution Ave. N.W., Frances Perkins Bldg., Room S-4524, Washington, DC 20210, telephone number (202) 693-3176 (this is not a toll-free number) or by email to email@example.com (78 Fed. Reg. 68865, November 15, 2013).(Read Intelliconnect) »
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