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Coalition of Filipino American Chambers of Commerce

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US Compliance and Tax Laws

US Compliance Tax Laws

By Ellen Rodriguez-Swing

Article 1 – US Compliance and Tax Laws

New Third Party Tax Reporting Rule to Impact US Small Business Owners 

A new tax rule will impact small businesses who use digital payment services. Starting January 1, 2022, the IRS will look into the digital payment service accounts of small businesses, freelancers, and independent contractors.

Payments of $600 or more with no minimum number of transaction requirements processed from PayPal, Venmo, Zelle, Cash App or any third-party settlement provider accepting credit cards on one’s behalf will need to be reported.

A Form 1099-K will be filed with the IRS by the Third-Party Settlement Organization (TPSO) and one can expect to receive it starting January 2023. In the coming months, it is expected that an extra form will be added during the payment process for the payer to identify the nature of the transaction. Additionally, tax information, like a social security number or tax ID, will be collected, if not yet provided, in order to continue using their TPSO account.

Article 2 – US Compliance and Tax Laws

State-Mandated Retirement Plans Kick in 

More than 30 states have considered enacting state-mandated retirement plan legislation. Of them, 13 have already signed such programs into law and have introduced legislation mandating that employers offer their employees a qualified retirement plan, like 401(k), or a state-run retirement plan to save in. These states have stepped in as a way to address the retirement savings gap and give workers access to a workplace retirement savings program.

Businesses generally have two ways to comply with this state-mandated retirement – enroll their employees into a state-sponsored retirement program or sponsor a plan of their own through the private market. They would have to offer the plans, and employees would be able to opt out. Employers in these jurisdictions who don’t comply with the requirements or miss enrollment deadlines may be penalized. The exact monetary amount of the penalty varies by state. It is advised that businesses check with their state to get these deadlines.

Below are the state-sponsored retirement which are a generally a low-cost solution with few fiduciary responsibilities for employers.

Active state-sponsored retirement plans

State

Retirement Legislation

California CalSavers
Connecticut MyCTSavings
Illinois Illinois Secure Choice
Massachusetts Massachusetts Defined Contribution CORE Plan
Oregon OregonSaves
Washington Washington Small Business Retirement Marketplace
Legislation passed, implementation scheduled

 

State 

Retirement Legislation 

Target Date

Colorado Colorado Secure Savings Program End of 2021-2022
Maine Maine Retirement Savings Program July 2023
Maryland Maryland Small Business Retirement Savings Program Mid 2022
New Jersey New Jersey Secure Choice Savings Plan March 2022
New Mexico New Mexico Work and Save Act January 2022
Virginia Virginia Saves July 2023
Vermont Green Mountain Secure Retirement Plan TBD 2022

 

Legislation passed, implementation not scheduled

State 

Retirement Legislation

New York New York Secure Choice Savings Plan
New York City Retirement Security for All Act

 

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Coalition of Filipino American Chambers of Commerce (COFACC)
22102 Normandie Ave.
Torrance, CA 90502
contact@cofacc.org

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