The COVID-19 pandemic has caused turmoil throughout the economy as states have issued stay-at-home, shelter-in-place, and other orders closing offices and forcing employees who traditionally go to work each morning to work from their dining room tables or spare bedrooms of their own homes or from alternative locations such as rentals away from COVID-19 hotspots or the homes of relatives. Among those employees include employees in the human resources, payroll, and tax departments of employers. Similarly, employees of payroll processors—both large and small—may be working remotely and processing payroll using new processes and systems. Throw in a series of new federal payroll tax credits, the deferred deposit of employer social security taxes, new section 139 plans, and millions of furloughed and laid off employees, and the stage is set for a host of unintentional payroll processing errors that may subject employers to tax penalties. While the IRS is hard-at-work on a new Form 941 to reflect the changes adopted as part of the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) some states have taken steps to address some of the payroll difficulties caused by the COVID-19 pandemic.
Continue Reading State Approaches to Telework and Withholding Taxes Differ During COVID-19 Pandemic