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© 2021 American Payroll Institute, Inc. Inside this issue... IRS Updates FAQs Process Addresses Reliance Concerns. ....................................................................2 DOL Finalizes Dual Jobs Portion of FLSA Tip Rule. ...........................................................................2 State Unemployment Insurance Taxable Wage Bases for 2022. ..............................................................5 IRS Provides Help on First Payment of Deferred Employment Tax. ............................................................5 IRS Explains Penalties for Late Payment of Deferred Employment Taxes. .....................................................6 USCIS Asks for Input on Remote Inspection for Form I-9. .....................................................................7 SSA Offers New Option for Uploading Form W-2 Files. .......................................................................8 Capitol Hill Update .........................................................................................................8 IRS Updates Electronic Return Specifications for 2021 .......................................................................9 APA Presents Year-End Compliance Seminars ..............................................................................10 IRS Revises Form 4419 for Current FIRE Users. ..............................................................................10 IRS Updates Status of Processing Forms 941. ...............................................................................11 Court Affirms DOL’s Authority to Recover Unpaid Wages, Damages in Court for Employees Who Sign Private Arbitration Agreements ............................................................................................................11 Employers Can Now Use OCSE’s New Communication Center. ..............................................................11 DHS to Stop Worksite Enforcement Raids. ..................................................................................12 USCIS Updates E-Verify for TNCs, Open Cases. ..............................................................................12 IRS Extends Videoconferencing to Large Businesses. ........................................................................13 IRS Allows Choice of Three SIFL Rates for the 2nd Half of 2021 ..............................................................13 Appeals Court Holds Daily Rate Must Meet Conditions for Salary Basis. .....................................................13 IRS Corrects Form 941 Instructions for Sick and Family Leave Wages. .......................................................14 IRS Releases Third-Party Sick Pay Recap Form for 2021. .....................................................................14 State and Local News. .....................................................................................................15 November 5, 2021 Volume 29 Issue 11 Social Security Wage Base Increases to $147,000 for 2022 The Social Security Administration (SSA) announced that the 2022 social security wage base will be $147,000, an increase of $4,200 from $142,800 in 2021. Maximum social security tax. 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. Medicare tax. As in prior years, there is no limit to the wages subject to the Medicare tax therefore, all covered wages are still subject to the 1.45% tax. As in 2021, wages paid in excess of $200,000 in 2022 will be subject to an extra 0.9% Medicare tax that will only be withheld from employees’ wages. Employers will not pay the extra tax. Note that the $200,000 threshold for the Additional Medicare tax is not subject to adjustments for inflation. FICA (combined) tax. The FICA tax rate, which is the combined social security tax rate of 6.2% and the Medicare tax rate of 1.45%, will be 7.65% for 2022 up to the social security wage base. Self-employed. The social security wage base for self- employed individuals in 2022 will also be $147,000. There is no limit on covered self-employment income that will be subject to the Medicare tax. The self-employment tax rate will be 15.3% (combined social security tax rate of 12.4% and Medicare tax rate of 2.9%) up to the social security wage base. In 2022, the maximum social security tax for a self-employed individual will be $18,228. TRUSTEES’ ESTIMATE WAS LOW – In its annual report for 2021, the Board of Trustees of the Social Security Trust Fund projected that the 2022 social security wage base would be $146,700, which is $300 less than the actual amount (see PAYROLL CURRENTLY, Issue 9, Vol. 29). Those employers that budgeted for their 2022 FICA tax expense based on the trustees’ projection will need to go back and recalculate that number. Quarters of coverage retirement earnings test The SSA has also announced that the amount of earnings needed to qualify for a quarter of coverage to receive full social On November 4, the IRS released the 2022 Pension Plan Limits. Coverage will be provided in a Compliance Update and the December issue of PAYROLL CURRENTLY (Issue 12, Vol. 29).