Withholding Requirements

News & Analysis as of

Changes to Accounting Rules Alter Approach to Share-Based Withholding

Earlier this year the Financial Accounting Standards Board released Accounting Standards Update No. 2016-09 (the “ASU”) to improve the accounting treatment of certain stock-based compensation payments. Among other updates,...more

Proposed QI Agreement Addresses Cascading Withholding on Dividend Equivalents

On July 1, the U.S. Internal Revenue Service issued Notice 2016-42, which proposes changes to the qualified intermediary (QI) agreement to address cascading U.S. withholding tax on dividends and “dividend equivalents”...more

Withholding Agents–Obligation to Withhold On Payments to Foreign Persons When Source of Payment Uncertain

In recent guidance to auditors, the IRS discusses what happens when a payor withholding agent pays items to a foreign payee when the withholding agent is uncertain whether the payment is U.S. source....more

An HR Checklist for New Employers: You have Your Ship, and Now You Need Your Crew; How to Get Your 'Ship' Together

Starting a business is not always simple. Being an employer carries with it a number of obligations and it is important to know the ropes prior to even hiring your first employee. Below is a condensed HR checklist that...more

IRS Proposed Regulations Under Section 305(c)

In April, the IRS issued proposed regulations interpreting deemed distributions under Section 305(c). Specifically, the proposed regulations would clarify the amount and timing of deemed distributions that result from an...more

IRS Proposes Updates to Rules for Deemed Distributions of Stock and Stock Rights

On April 13, 2016, the U.S. Department of the Treasury issued proposed regulations under Section 305(c) of the Internal Revenue Code that would resolve certain issues relating to the amount and timing of deemed distributions...more

USA FDI News - April 2016

USA FDI News highlights the FAQs arising from your projects - from how to finance a deal to selecting the right visa or tax strategy and more. We want to keep USA FDI News interactive and relevant to your international...more

PATH Act Creates New FIRPTA Withholding Tax Rate and Exemption for Foreign Pension Funds

The Protecting Americans from Tax Hikes Act of 2015 (the “PATH Act”), signed into law on December 18, 2015, has resulted in a number of changes to the taxation of investments in U.S. real property by foreign investors. Among...more

Corporate E-Note - February 2016

With the start of the 2016 tax reporting season, taxpayers making certain payments to a person or entity with a Tennessee address may find that Tennessee has added to the number of information returns they need to...more

New FIRPTA Regulations

As previously noted, the Protecting Americans from Tax Hikes Act of 2015 modify the withholding provisions under FIRPTA. The Service has now issued regulations implementing the statutory changes. ...more

Withholding Tax Set to Increase

The Foreign Investment in Real Property Tax Act (FIRPTA) subjects foreign sellers to U.S. tax when they sell their interest in real property located in the U.S., including interests in companies that predominately hold real...more

Changes To FIRPTA Affecting Real Estate Transactions

The Foreign Investment in Real Property Tax Act ("FIRPTA") is applicable to all transactions involving interests in real property where the Seller is a "foreign person" (this includes entities). According to the IRS, FIRPTA...more

Banking & Financial Services E-Note - January 2016

In Deutsche Bank Nat’l Trust Co. v. Estrella Perez, et al., No. 3D15-58, 2015 WL 8347002 (Fla. 3d DCA Dec. 9, 2015), Florida’s Third District Court of Appeal held that the trial court erred in dismissing a foreclosure case on...more

FIRPTA Withholding Amounts Change

On December 18, 2015, President Obama signed into law the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) as part of the Consolidated Appropriations Act, 2016. The new PATH Act reforms the Foreign Investment in...more

PATH Act Presents Opportunities for Tax-Efficient Non-U.S. Investment in U.S. Real Estate

On December 18, 2015, President Obama signed into law the Protecting Americans from Tax Hikes Act of 2015 (the “PATH Act”). Among its numerous revisions to federal tax law, the PATH Act significantly amended various...more

Employers Need 2015 Year-End Planning to Meet Employee Reporting and Withholding Requirements

To avoid tax reporting and withholding penalties as 2015 draws to a close, employers need to properly plan and check their reporting for employees under non-qualified deferred compensation, fringe benefits, health benefits or...more

Year-End Tax Tips

As 2015 comes to a close, folks have a lot on their plates – and that’s not just from the holiday hors d’oeuvres being passed around. A variety of different individual and business objectives use December 31st as a deadline...more

California Court Upholds Payroll Tax Withholding on Back Pay and Front Pay Judgment - Tax Update Vol. 2015, Issue 4

The opinion adopts well-established federal law and overturns a 22-year-old California case that held that withholding was not required. Everyone knows that, when an employer pays wages to an employee, the employer...more

Best in Law: Tax Ruling Confirms Protocol on Job-Related Judgments

The California Court of Appeal recently confirmed that employment-related settlements or judgments are wages from which employers must withhold payroll taxes. In Cifuentes v. Costco Wholesale Corp., Cifuentes...more

New 871(m) Regulations Finalize Dividend Equivalent Payment Withholding Rules for Equity Derivatives

On September 17, 2015, the IRS and the Treasury Department issued final, temporary, and proposed regulations under section 871(m) of the Internal Revenue Code (collectively, the “new regulations”) that provide the rules for...more

Employers Must Withhold FICA Taxes for Students who Change Status to H-1B Starting October 1

As students and scholars’ status change from F-1, J-1 or other FICA exempt statuses to H-1B starting October 1, these employees will become subject to FICA taxes upon the effective date of their H-1B status....more

Treasury, IRS Extend Certain FATCA Transitional Rules

IRS Notice postpones several key deadlines and provides other relief. On September 18, the US Internal Revenue Service (IRS) released Notice 2015-66 (the Notice) announcing that the US Department of the Treasury and the...more

FATCA: IRS Extends Transitional Rules

On September 18, 2015, the IRS announced its intention to amend the U.S. FATCA regulations to extend the effectiveness of certain transitional rules, including...more

IRS Will Extend Some FATCA Transition Rules

In new Notice 2015-66 the IRS said it plans to amend FATCA regulations to reduce certain collateral restrictions on grandfathered obligations and extend the following transition rules: (1) the date for when withholding on...more

California Appellate Court Holds Employer Must Withhold Taxes on Back Pay

On June 26, 2015, a California appellate court rendered a precedential opinion that should hopefully put to rest the issue of whether an employer must withhold taxes on settlements or judgments made to former employees in...more

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