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Everything you need to know about BMD and the industry.

IRS Provides Guidance for Payroll Tax Deferrals and Credits

Delay of Payment of Payroll Taxes Penalty and Interest Relief

                Under the CARES Act, provision was made for the delay in the payment of the employer portion of the Social Security, Medicare, and Railroad Retirement taxes for wages accrued during the period beginning March 27, 2020 and ending December 31, 2020. Instead of being due on the regular due date for the employer to deposit the taxes, one-half of the employer portion of the taxes for that period would be due on December 31, 2021, and the remaining one-half on December 31, 2022. Employers and self- employed individuals are both eligible for this relief provided they have not had indebtedness forgiven under either Sections 1106 or 1109 of the CARES Act. 

                What was not addressed was the imposition of interest and penalty for failure to make timely deposits of payroll taxes. This was resolved in Notice 2020-22 which was released on March 31, 2020.  Provided the employer pays the amounts by the due dates (December 31, 2021 and December 31, 2022), no penalty or interest will be imposed. However, this does not relieve the employer of making timely deposit of all employee withheld taxes and filing the quarterly Form 941.  

Advance Payment of Employer Credits Due to COVID-19

                On March 31, 2020, the IRS also released Form 7200, Advance Payment of Employer Credits Due to COVID-19. This form allows employers (but not self-employed individuals) who are eligible for tax credits for qualified sick and qualified family leave wages as well as the employee retention credit to request an advance payment of the credits that they will claim on the Form 941, 943, 944 series or Form CT-1. 

                This form may be filed for an advance payment of any credits that an employer anticipates receiving before the end of the month following that quarter.  Simply put, you must file this Form before you file the appropriate quarterly tax reporting form that you normally file.  It is important to remember not to file to request an advance payment for any anticipated credits if you have already reduced your deposits for those amounts. Of particular note is that Form 72 MUST be fax filed to (855) 248-0552.

Date Clarification for Payments Eligible for Qualified Sick and Qualified Family Leave Under FFCRA

                The IRS has also released Notice 2020-21 which states that the official dates between which wages earned (not paid) during the period April 1, 2020, and December 1, 2020, are those which are eligible for the credit. It was further stated in the FAQs on the IRS website that it is the date they are earned or accrued and not the date that the actual payment is made which is key. Therefore, the actual payment may occur in January 2021, but still be an eligible amount. 

For questions, or more information, please contact BMD Tax Member Priscilla Grant at pag@bmdllc.com or 330.253.5934.

BMD Appellate Win Clarifies Waiver of Contractual Right to Arbitrate

Brennan, Manna & Diamond, LLC attorneys David M. Scott, Lucas K. Palmer, and Krista D. Warren prevailed before the United States Court of Appeals for the Sixth Circuit regarding if/when a party waives a contractual right to arbitrate. Borror Property Management, LLC v. Oro Karric North, LLC, No. 20-3146 (the “Decision”).

Relief for Ohio Under the Federal American Rescue Plan Act

On March 11, 2021, President Biden signed the American Rescue Plan Act (the “Act”) — a $1.9 trillion COVID-19 relief package — a significant portion of which will be directed to the State of Ohio to support economic recovery, as outlined below.

Cleveland Manufacturer Violated OFAC Sanctions By Allowing Shipments To Iran - Know Your Customer and Know Their Customer

UniControl, Inc., a Cleveland, Ohio manufacturer of process controls, airflow pressure switches, boiler controls and other instruments, agreed to pay the Office of Foreign Assets Control “OFAC,” the financial enforcement agency of the U.S. Treasury Department, $216,464 to settle its liabilities for violations of the Iran Sanctions Program. OFAC stated that “this enforcement action highlights the importance of identifying and assessing multiple warning signs that indicate a foreign trade partner may be re-exporting goods to a sanctioned jurisdiction.”

Ohio Breach of Contract Statute of Limitations Shortened to 6 Years

On March 16, 2021, Governor DeWine signed into law S.B. 13 which shortens Ohio’s statute of limitations for filing lawsuits based on breach of contract. A statute of limitation is the time period within which a party must file a lawsuit before its claim expires as a matter of law.

Chinese Product Tariff Challenge Causes Flurry of Importer Lawsuits

A lawsuit filed late in 2020 at the U.S. Court of International Trade (“CIT”) challenging the U.S. Trade Representative’s (USTR) implementation of Section 301 “List 3” and “List 4” duties on products from China, HMTX Industries LLC et al. v. United States (Court No. 20-00177), has resulted in the filing of thousands of additional lawsuits brought by other affected importers. There are now 3,700+ companies added to the list, including Ford, Home Depot, Target, Tesla, and Walgreens, along with many other smaller importers.