On August 16, President Biden signed H.R. 5376, the Inflation Reduction Act of 2022, into law.
Although the law is generally not payroll related, it does allow small businesses to claim $250,000 more in qualifying research expenses as a payroll tax credit against the employer’s share of Medicare tax. It will take effect for tax years beginning after December 31, 2022.
The law also provides an additional $80 billion in funding for the IRS to improve taxpayer services, allow the agency to modernize its technology, and increase enforcement to close the tax gap. Specifically, the legislation grants up to $45.6 billion for IRS enforcement over the next nine years. The funds are to provide digital asset monitoring and compliance activities and to enforce criminal statutes related to violations of IRS laws and other financial crimes.
Over the years, APA Government Relations has continuously requested increased funding for the IRS.
To learn more about federal and state laws, regulations, and information to keep your company’s payroll operations in compliance, check out Payroll Source Plus!
Jyme Mariani, Esq., is Managing Editor of Payroll Currently and Senior Manager of Payroll Information Resources for the APA.