The Employee Retention Tax Credit (ERTC) is a valuable tax break that was extended and modified by the American Rescue Plan Act (ARPA), enacted in March of 2021. Here’s a rundown of the rules. Background Back in March of 2020, Congress originally enacted the ERTC in the CARES Act to encourage employers to hire and retain employees during the pandemic. At that time, the ERTC applied to wages paid after March 12, 2020, and before January 1, 2021. However, Congress later modified and extended the ERTC to apply to wages paid before July 1, 2021. The ARPA again extended and modified the ERTC to apply to wages paid after June 30, 2021, and before January 1, 2022. Thus, an eligible employer can claim the refundable ERTC against “applicable Read More...
COBRA and the New Subsidy
COBRA Premiums Now Being Paid by Employers Are you aware of the COBRA rules we now live in under the Federal American Rescue Plan Act (ARPA)? From April 1st to September 30th, 2021, employers are required to pay COBRA premiums for employees who were involuntarily separated or had a reduction in hours. Under this federally subsidized program, the government will reimburse employers dollar for dollar against their quarterly payroll tax obligations. How Does it Work? As a standard, employers are already required to offer COBRA coverage for 18 months after the involuntary termination and some states have implemented continuation plans. But under the new subsidy, employees and their qualifying dependents can be covered at no cost for Read More...
Daycare Tax Savings
Are You Making the Right Election? While many parents are still shoring up their 2020 tax filing, they are probably passing up major savings in 2021 that will need a decision now before it's too late. Not only did the pre-tax maximum Dependent Care Flex amount increase from $5,000 to $10,500 for 2021 (if employers choose to participate), but as of this March's tax reform, there's an adjusted Dependent Care Credit that might outweigh flexing this year. By potentially forgoing the pre-tax flex option, families could qualify for up to an $8,000 refundable credit on their tax return. But you cannot do both. There are a variety of factors that go into the calculation, which will be unique to each taxpayer, including income level and Read More...
Payroll Tax Deferral, Now What?
The President’s memorandum deferring the employee’s portion of Social Security tax starts September 1, 2020 and goes through December 31, 2020. With no additional payroll guidance as of August 27th being provided for the memorandum’s implementation, employers are left questioning if they have to participate, what their responsibility is to their employees, and what they may be liable for. Even though Treasurer Secretary Mnuchin has stated that the payroll tax deferral will be voluntary, but is it voluntary by the employer or by the employee? If it is voluntary for the employee, does an employer need to develop a process for making that election? If an employee makes the election to defer their payroll tax, can they later elect to revoke Read More...
8 Steps to Temporarily Closing a Business
8 Steps to Temporarily Closing a Business This is an unprecedented time that has forced many small business owners to make the difficult decision to close their business. Some businesses have chosen to close permanently during this pandemic, while others are temporarily shutting the doors. A temporary closure requires a little more than hanging a “closed” sign and locking the door. The recognition of a closure needs to go further than the patrons and be recognized federally and by the state. There are proper steps that must be considered when temporarily closing and today, we take a look at those 8 steps. 1. Contact Your CPA During a period of transition or closure, your CPA will be your best friend. It's important to be strategic Read More...
Do I Have to Report a New Hire?
At Christianson, we are always looking out for small businesses and making sure they have all the information they need to keep their minds at ease. Lately, we have heard questions surrounding MN New Hire Reporting so we wanted to give you some tips! First, have you hired a new employee recently? Did you know you need to report the new hire with the State of Minnesota? The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 requires ALL employers to report newly hired or re-hired employees to a state directory within 20 days of their hire date. New hire reporting speeds up the child support income withholding order process and expedites the collection of child support. What new hire information needs to be Read More...
Department of Labor Overtime Rule
At Christianson, we do everything we can to keep our individual and business clients in the know when it comes to legislative changes and updates. On August 31, 2017, the final ruling related to the new Department of Labor (DOL) overtime rule was issued which officially struck down the Obama-era rule. U.S. District Judge Amos Mazzant is saying that the Department of Labor (DOL) set excessively high salary thresholds which were proposed to go from $23,660 to $47,476 annually. Twenty-one states and many business organizations also argued that the salary limit and three year raises were not the intent of Congress. It doesn't look like the Trump administration will appeal this ruling but may decide on a middle ground salary in the Read More...
Federal Judge Blocks Overtime Rule
Federal Judge Blocks Overtime Rule An employee’s exempt status is based on duties performed, not wages paid. A U.S. District Judge issued a nationwide injunction stopping implementation of the Department of Labor’s rule on overtime pay for exempt employees. It was set to take effect on December 1. According to the Washington Times, the judge ruled: “Congress defined the … exemption with regard to duties, which does not include a minimum salary level,” Judge Mazzant wrote. “The Department’s role is to carry out Congress’s intent. If Congress intended the salary requirement to supplant the duties test, then Congress, and not the Department, should make that change.” The full ruling is 20 pages, but this paragraph captures the essence Read More...
C&A Hosting Overtime Rule Workshop September 15th
The Willmar Lakes Area Chamber of Commerce has looked to the experts at Christianson & Associates to communicate upcoming changes to federal overtime regulations to local businesses. The Department of Labor’s Overtime Final Rule goes into effect on December 1, 2016 and includes some major changes pertaining to local businesses. The threshold for all salaried employees has increased significantly and employers will need to review all salaried employees to make sure they are in compliance with the new regulations. To discuss the changes coming with the Overtime Final Rule and how these changes will affect local businesses, Christianson & Associates will be hosting a free workshop on September 15th from 7:30 to 9:00am at the Willmar Read More...
