The IRS released: a revised Form 941, Employer’s Quarterly Federal Tax Return, and its instructions; instructions for Schedule B, Report of Tax Liability for Semiweekly Schedule Depositors; Schedule R, Allocation Schedule for Aggregate Form 941 Filers, and its instructions; and Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund, and its instructions.

All of the forms and instructions were updated to reflect the expiration of COVID-19-related relief.

Changes to Form 941, Instructions

The updated Form 941 and its instructions have a revision date of June 2022 and can be used for the second, third, and fourth quarters of 2022. Form 941 was last updated in March for use in the first quarter of 2022 only.

The instructions now include only two worksheets. Worksheet 3, COBRA Premium Assistance Credit, is no longer included.

Changes to Form 941-X

The IRS also updated Form 941-X to match changes made to Form 941. The Form 941-X instructions have a revision date of April 2022 and should be used with the April 2022 revision of Form 941-X for all years for which the statute of limitations on corrections has not expired.
Courtesy of the American Payroll Association, Jyme Mariani, Esq.

The IRS announced the 2023 maximum contribution levels for health savings accounts (HSAs) and out-of-pocket spending limits and deductible minimums for high deductible health plans (HDHPs) that must be used in conjunction with HSAs [Rev. Proc. 2022-24].

Annual Contribution Levels for HSAs

The maximum annual HSA contribution for an eligible individual with self-only coverage is $3,850 ($3,650 in 2022).

For family coverage, the maximum annual HSA contribution is $7,750 ($7,300 in 2022).

Amounts for Out-of-Pocket Spending on HSA-Compatible HDHPs

The maximum annual out-of-pocket amount for HDHP self-only coverage is $7,500 ($7,050 in 2022), and the maximum annual out-of-pocket amount for HDHP family coverage is twice that at $15,000 ($14,100 in 2022).

Minimum Deductible Amounts for HSA-Compatible HDHPs

The minimum deductible for HDHPs is $1,500 ($1,400 in 2022) for self-only coverage and $3,000 ($2,800 in 2022) for family coverage.

Maximum Amount Available Under an Excepted Benefit HRA

The maximum amount that may be made available for an excepted benefit health reimbursement arrangement (HRA) is $1,950 ($1,800 in 2022).

Courtesy of the American Payroll Association Jyme Mariani, Esq.

On April 6, the U.S. Department of Education announced it will extend the federal student loan relief until August 31, 2022 [U.S. Department of Education, Press Release, 4-6-22].

During this extension of relief for federal student loan borrowers, repayments, interest, and collections are still halted, and any borrower with defaulted federally held loans whose employer continues to garnish their wages will receive a refund of those garnishments.

The relief had been set to expire on May 1. The Department of Education will release information about the payment restart as the end of the pause approaches
Courtesy of the APA Jyme Mariani, Esq.

The IRS has announced the cost-of-living adjustments (COLAs) to the dollar limits on benefits and contributions under qualified retirement plans, as well as other items, for tax year 2022.

• The limitation on the exclusion for elective deferrals under §402(g)(1) (e.g., §401(k) and §403(b) plans) increases to $20,500 (from $19,500).
• The limit on annual additions to defined contribution plans under §415(c)(1)(A) increases to $61,000 (from $58,000).
• The limit on the annual benefit under a defined benefit plan contained in §415(b)(1)(A) increases to $245,000 (from $230,000).
• The annual compensation limit under §401(a)(17), §404(l), §408(k)(3)(C), and §408(k)(6)(D)(ii) increases to $305,000 (from $290,000).
• The compensation amount under §408(p)(2)(E) regarding elective deferrals to SIMPLE retirement accounts increases to $14,000 (from $13,500).
• The limitation under §457(e)(15) concerning elective deferrals to deferred compensation plans of state and local governments and tax-exempt organizations (§457(b) plans) increases to $20,500 (from $19,500).
• The limitation under §416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy plan increases to $200,000 (from $185,000).
• The limitation under §414(v)(2)(B)(i) for catch-up contributions to §§401(k), 403(b), and 457(b) plans for individuals age 50 or over remains unchanged at $6,500; the limitation under §414(v)(2)(B)(ii) for catch-up contributions to an employer’s SIMPLE plan for individuals age 50 or over remains unchanged at $3,000.
• The limitation used in the definition of “highly compensated employee” under §414(q)(1)(B) increases to $135,000 (from $130,000).
• The annual compensation limit under §401(a)(17) for eligible participants in certain government plans that, under the plan as in effect on July 1, 1993, allowed cost-of-living adjustments to the compensation limit under the plan under §401(a)(17) to be taken into account, increases to $450,000 (from $430,000).
• The compensation amount under §408(k)(2)(C) regarding simplified employee pensions (SEPs) remains unchanged at $650.
• The compensation amount under Treas. Reg. §1.61-21(f)(5)(i), concerning the definition of “control employee” for fringe benefit valuation purposes, increases to $120,000 (from $115,000). The compensation amount under §1.61-21(f)(5)(iii) increases to $245,000 (from $235,000).
• The limit on annual contributions to an Individual Retirement Arrangement, remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

The Social Security Administration announced that the 2022 social security wage base will be $147,000, which is an increase of $4,200 from $142,800 in 2021.

The maximum social security tax employees and employers will each pay in 2022 is $9,114, an increase of $260.40 from $8,853.60 in 2021.

The U.S. Department of Education announced it will extend the federal student loan relief until January 31, 2022 [U.S. Department of Education, Press Release, 8-6-21; Federal Student Aid notice]. This final extension sets a “definitive end date” to the relief.

During this extension of relief for federal student loan borrowers, repayments, interest, and collections are still halted, and any borrower with defaulted federally held loans whose employer continues to garnish their wages will receive a refund of those garnishments. The relief had been set to expire on September 30, 2021.

Courtesy of the APA

The General Services Administration (GSA) issued its annual updated list of federal maximum per diem rates for travel to locations within the continental United States (CONUS). Per Diem Bulletin FTR 22-01 is effective for travel undertaken on or after October 1, 2021 [86 F.R. 45731, 8-16-21].

GSA Per Diem Rates

The federal per diem rate is a combination of the lodging expense rate and the meal and incidental expense (M&IE) rate for the locality of travel. For travel within CONUS, the per diem rates published by the GSA may be used to substantiate certain travel expenses.

The standard CONUS M&IE rate is $59 for fiscal year (FY) 2022. The M&IE rates for non-standard areas (NSAs) increase to $59, $64, $69, $74, and $79.

For all locations within CONUS not shown on the list, the lodging per diem remains at $96, the M&IE rate increases to $59, and the combined maximum standard per diem rate increases to $155. The combined per diem rates for the listed NSA locations range from a low of $155 (off-season) for several locations, to a high of $497 (peak season) for Telluride, Colo. There are 319 NSA locations in FY 2022. All FY 2022 NSA lodging per diem rates will remain at FY 2021 levels.

Courtesy of the APA

On March 9, the IRS released the 2021 Form 941, Employer’s Quarterly Federal Tax Return, and its instructions. The IRS also revised the instructions for Form 941, Schedule B and the instructions for Form 941, Schedule R. When the IRS released the instructions, Congress was considering changes to COVID-19 tax relief. When the new legislation changes these instructions, the IRS will post updates here.

Updates to Form 941

The Form 941 instructions have been updated to include extensions of the COVID-19-related tax credits under the Consolidated Appropriations Act, 2021:

• The Families First Coronavirus Response Act (FFCRA) tax credit for emergency paid sick leave wages and expanded family and medical leave wages was extended to qualified leave wages paid for leave taken before April 1, 2021.
• The employee retention credit, established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, was extended to qualified wages paid through June 30, 2021.
•  The instructions also provide guidance on claiming advance tax credits using Form 7200, paying the employer and employee social security tax deferred in 2020, and a new payroll tax credit for tax-exempt organizations affected by qualified disasters.

Paying Deferred Amount of Social Security Tax

The IRS said it will update its Electronic Federal Tax Payment System (EFTPS) to allow employers to pay the deferred amounts of the employer and employee share of social security tax by March 19. Filers will be able to select the new option to make these payments.

Courtesy of the APA