Month: February 2021

Wisconsin Legislature to Vote on Half-Billion Dollar Tax Cut

Posted on February 16, 2021 by

The Wisconsin Legislature was scheduled to vote Tuesday on approving a half-billion dollar tax cut for businesses that received loans to help them keep employees on the payroll during the pandemic, one of several measures related to the coronavirus that are slated for consideration.

The bill cutting business taxes by $540 million by the middle of 2023 was up for a vote in both the Senate and Assembly. If passed, it would then go to Democratic Gov. Tony Evers who was non-committal last week about whether he would sign or veto the measure.

The bill would benefit recipients of loans administered through the federal government’s Paycheck Protection Program. The loans are already tax deductible under federal law and Republicans say they are simply trying to bring state tax code into compliance. But Democratic opponents said the move would blow a hole in the state budget.

The Senate was voting Tuesday on a myriad of virus-related bills, including ones to bar employers from mandating vaccinations for workers, not allow prisoners to get priority for vaccinations and prohibit the closing of churches during the pandemic.

Governor Evers Proposes Allowing Local Governments to Raise Taxes

Posted on February 15, 2021 by

Governor Tony Evers wants to allow counties to be able to double their existing sales tax and allow larger municipalities to impose a new half-cent sales tax, if local voters approve.

The proposal announced Friday drew widespread support from local governments that would benefit from the additional money, which they said would lessen their reliance on property taxes. But the idea divided the state’s business community, with the statewide chamber of commerce opposing it but Milwaukee economic development groups backing it.

Evers said state budget plan will include the tax increase option for those local governments, which could generate additional money that he said could be put toward local roads, services, maintenance, public safety and public health.

Evers’ proposal would require approval of a referendum in the affected county or municipality before the local sales tax could be increased. Evers said by doing that, those who live in the area and would be affected by higher taxes could decide if they want to impose it on themselves.

Current law allows counties to impose a half-cent sales tax. Evers’ plan would allow them to double that. All but four of the state’s 72 counties currently impose the tax. Under the plan, municipalities with 30,000 or more residents could impose a half-cent sales tax for the first time. That would apply to more than two dozen cities across the state, including Milwaukee, Madison, Green Bay, Kenosha, Racine, Appleton, Eau Claire, Oshkosh, Janesville, La Crosse, Wausau and Beloit.

The state sales tax rate is 5%.

IRS Updates FAQs on Paid Sick Leave Credit and Family Leave Credit

Posted on February 1, 2021 by

On Friday, the Internal Revenue Service (IRS) posted updated FAQs about recent legislation that extended and amended tax relief to certain small- and mid-sized employers under the Families First Coronavirus Response Act (FFCRA).

The FAQs are available at COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs.

The updates to the FAQs cover how the COVID-related Tax Relief Act of 2020, enacted December 27, 2020, extends the availability of the tax credits created by the FFCRA to eligible employers for paid sick and family leave provided through March 31, 2021, as well as other amendments to the credits.

The paid sick and family leave credits, which previously were available only until the end of 2020, have been extended for periods of leave taken through March 31, 2021.

In addition, an eligible employer can receive the paid sick leave credit for employees who are unable to work due to caring for someone with coronavirus or caring for a child because the child’s school or place of care is closed, or the paid childcare provider is unavailable due to the coronavirus. Eligible employers may claim the credit for paid sick leave provided to an employee for up to two weeks (up to 80 hours) at 2/3 the employee’s regular rate of pay, or up to $200 per day and $2,000 in total.

Employers are also entitled to a paid family leave credit for paid family leave provided to an employee equal to 2/3 of the employee’s regular pay, up to $200 per day and $10,000 in total. Up to 10 weeks of qualifying leave can be counted towards the family leave credit.

Eligible employers are entitled to immediately receive a credit in the full amount of the paid sick leave and family leave plus related health plan expenses and the employer’s share of Medicare tax on the leave provided through March 31, 2021. The refundable credit is applied against certain employment taxes on wages paid to all employees.

Eligible employers may claim the credits on their federal employment tax returns (e.g., Form 941, Employer’s Quarterly Federal Tax Return), but they can benefit more quickly from the credits by reducing their federal employment tax deposits. If there are insufficient federal employment taxes to cover the amount of the credits, an eligible employer may request an advance payment of the credits from the IRS by submitting a Form 7200, Advance Payment of Employer Credits Due to COVID-19.