telework

Without notice or fanfare, the New York Department of Taxation updated guidance on its website to address the application of its “convenience of the employer” rule to COVID-19 telecommuters.  The question of whether New York would consider employees who are working remotely due to the pandemic as doing so for “convenience” or “necessity,” has been vexing employers and employees since April.  New York’s latest update, which is disappointing but not surprising, has come down on the side of convenience.  As a result, an employee whose principal office is in New York State but who is working outside of the state during the pandemic will generally remain subject to New York State income tax, and the employer should generally continue to withhold New York State tax from the employee’s compensation.
Continue Reading Bad News for New York Nonresident Telecommuters: New York Issues COVID-19 Telecommuting Guidance

On Friday, June 19, the IRS updated several FAQs on its website related to the Employee Retention Credit adopted as part of the Coronavirus Relief, Aid, and Economic Security (“CARES”) Act.  The updated FAQs provide additional insight into the IRS’s current thinking regarding employer eligibility for and determination of the credit.  Unfortunately, the updated FAQs still leave significant uncertainty regarding the eligibility of some employers, many of whom will be making a determination of their eligibility before filing their Forms 941, Employer’s Quarterly Federal Tax Return, for the second quarter in July.
Continue Reading IRS Updates FAQs on Employee Retention Credit Enacted as Part of CARES Act

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