3 Stories to Start Your Week: November 1, 2021

The IRS has been sending notices out to those who chose to defer their Social Security Taxes last year, warning that half the taxes will be due by year-end. Some payroll professionals received an email this past Friday from the IRS with CP256V Notices on a strictly informational basis. These notices were purposed to alert self-employed and household employers who chose to defer Social Security Taxes under the CARES Act in October and November, that their first installment of deferred taxes will be due by the end of December, and the remainder by the end of next year.

This payroll tax deferral assisted those who found they needed funding to pay regular expenses during the pandemic, however it is now coming due. The IRS has stated that it will continue to send out these notices before each installment is due, but there is no response required for the notice.

After months of discussion between leaders of the world’s largest economies, the G20 finally came to an agreement to endorse an OECD (Organization for Economic Co-Operation and Development) deal on a global minimum corporate tax. Drafted rules following the conclusion of the two-day summit were presented on Saturday, with a proposition to have the rules enforced by 2023.

The 15% global minimum will ensure large corporations, especially those in tech, are hit with a levy seeing as some companies historically have avoided taxation by establishing an office in low-tax jurisdiction countries. Janet Yellen the U.S. treasury Secretary says that the endorsement would help U.S. businesses and workers even though several companies will now be paying more in taxes. Yellen has been quoted saying, “This deal will remake the global economy into a more prosperous place for American business and workers.”

Filings for unemployment benefits declined last week to their lowest level since the beginning of the COVID-19 pandemic, dropping to 281,000 this past week. However, employers are having to fight harder than ever before to hire as the labor market continues to shrink. Those having the hardest time hiring are employers looking to fill positions in low-paid service jobs as they are also having issues keeping workers on staff.

In addition to a new pandemic low for unemployment, there is also a low in terms of lay-offs. This is all happening while workers are quitting their jobs at record levels. About 4.3 million workers left their jobs in August, which is the highest recorded figure since 2000. These workers through quitting, will not qualify for unemployment benefits, ensuring they are not included in the unemployment figures.

In light of all of these figures, employers are competing harder than ever before to fill their open roles. Companies are using many different tactics such as starting bonuses, higher pay, and more benefits. In addition to this, there is a heavier focus on employee retention than ever before.

Thoughts?  Let us know by giving us a call at (516)541-6549, and don’t forget— have a great week!