Can I Sign North Carolina Profit Sharing Agreement Template

Electronically signed barter agreement template

hello today we're going to be talking about form 1099 federal and state reporting with emphasis on state reporting i'm john montgomery i'm the national partner in charge of kpmg's employment tax practice i've been with kpmg for 18 years and i'm based in the new york city office my group specializes in all u.s payroll reporting and withholding obligations related to process and procedures review and implementation software implementation for payroll systems federal state and local payroll compliance and assisting with issues related to multi-state withholding in addition i have my colleague jerry khan who will now introduce himself hello i'm jerry khan i'm a managing director in kpmg's information reported and withholding practice my practice focuses on all things information reporting related covering chapters 3 4 61 and the common report in standards prior to joining kpmg i worked at barclays capital and bank new york maryland my focus at kpmg has been bridging the gap between tax technical and operational attacks thanks john thanks jerry before we jump in we're going to just cover some logistics and cpe information this session has been pre-recorded however a subject matter expert is participating in the session live to answer any questions you have via the chat polling questions will be incorporated throughout the session to verify attendance and qualify you for your cpe credits please be sure to complete the session survey to provide us with any feedback cpe credits for attending this session live will be added to your synergy cpe certificate which will be emailed to you following the conference the recording of this session will also be available post synergy but will not qualify for any cpe credit our objectives today are really to help you to identify reporting and withholding requirements of forms 1099 at the state level we will also cover states that accept combined reporting with the federal government states that have separate filing requirements and states that may require withholding taxes on payments to recipients as well as for non-resident independent contractor and recipients that are providing services in a state other than their state of residence so for our agenda today we will quickly cover a variety of different 1099 forms that are available but our focus today will be on independent contractor reporting and reporting to pensioneers we will cover that by going through the form 1099 miscellaneous form the new form 1099 nec and form 1099-r in their federal reporting requirements from there we will go into a summary of the combined federal and state reporting program and lastly we will cover some 1099 withholding requirements at the state levels whether it is tied to any required federal withholding as well as specific guidance provided to us by a few states as noted on this slide for non-resident contractors performing services in a state lastly we will leave some time at the end to cover any questions that have come through on the chat which we will be hosting live so we're going to go ahead and dive in form 1099 has a variety of different forms we can use based on the payments they're being made form 1099 div as it's called is to report dividends for u.s and foreign corporations mutual funds and non-taxable money market dividends in addition form 1099 int is issued to recipients who have received taxable and non-taxable interest reportable for for a current year we also have a form 1099-b which is really around stock transactions those are used and reported by brokers and border exchanges to report proceeds from a transaction to the internal revenue service and a form 1099 oid original issue discount these are accrual results from ownership of a long-term obligation that was originally issued at a discount from the amount payable at maturity all of these forms have two filing requirements one to the internal revenue service one to the recipient most of these forms have a dollar threshold on the 1099 div and the 1099 int that will dictate whether or not a filing is required as we continue on and these are the forms that we're going to be focusing on more today form 1099 miscellaneous stuff will reflect a variety of payments which we will cover but also to reflect income from royalty trusts consent payments substitute payments in lieu of dividends we have a new form this year a 1099 nec which stands for non-employee compensation this form is going to replace the box 7 on the 1099 miscellaneous but not any other boxes on the 1099 miscellaneous this was done to capture independent contractor payments and also better to align with federal reporting requirements and the differences between them in the form 1099 miscellaneous which we will discuss further throughout this presentation it also helps alleviate some confusion that occurred in the marketplace with the 1099 misc box 7 being due at the end of january to the irs and the rest of the form being due at the end of february or march depending on whether or not you e file right now you've got two separate form with two separate due dates with the 1099 nac sorry i'm probably jumping ahead that's okay being due the end of january with the 1099 miss having its own two date and it's just the one due date it's tonight it's at the end of february if your paper following the end of march of your e-filing correct and we will cover that later but thank you for clarifying that jerry um we also have a 1099-r these are fairly common we see them quite a bit these are for distributions from pensions annuities for retirement iras or anything that's going to a pensioner and the last form is a 1099-k this is a relatively new form in the last few years and this represents our 1099 reporting for payment card and third-party network transactions now we're going to spend some time on the federal reporting obligations for 1099s as i previously stated copies need to be filed with the internal revenue service as well as to the individual if you're filing paper form 1099s they will be accompanied by a summary form 1096 which is the annual transmittal that summarizes all the 1099s that were reported and the total amounts that were reported on the form most 1099s are usually due by the last day of january of the following year so for 2020 most 1099s will be due on january 31st of 2021. if you have greater than 250 of the same 1099 forms the irs requires you to file electronically by march 31st of the following year new regulations were passed to have that threshold of 250 full to 100 in 2021 and further below that in 2022 as a result of the current ongoing 2020 situations these rules to reduce the electronic filing threshold have been postponed so for 2021 the electronic filing threshold will still be 250. also as noted below for the form 1099 nec our new form will be due on february 1st 2021 since january 31st falls on a sunday the recipient copies of these forms must also be postmarked on that date so we're going to go to our first question you should be able to answer this now as you're viewing this live do you file 1099s electronically regardless of your thresholds yes or no so if you're under 250 or would you still file electronically so we'll wait as the polls come in in my experience and i'll ask jerry to comment as well the majority of companies i see still will file electronically even if they're under 250 just for ease of filing i don't know what you're seeing jerry that's my experience also i think a great number of companies migrated to filing electronically to avoid any issues related to having additional filings come up later on in the year and ultimately triggering uh penalties because you end up submitting over 100 forms at which point you know you you put yourself in a bad situation so what i'm finding is the majority of withholding agents tend to electronically file regardless of their threshold john yes and i'll add on a practical note anyone that's tried to feed the red paper into printers and had it jam on the last minute prefers to file electronically yeah okay yes because it's becoming harder and harder for people to order forms i can imagine with and the difficulties people are going to have this year receiving those irs copy version of the forms more and more people will be looking to find it this year yes and i think we're hearing more and more throughout the year because the irs offices have also been closed the extensive backlog of paper returns for all tax types that the irs is working to actually log in and accept there are very long delays on doing that so a lot a lot of companies are that have not done electronically in the past are certainly looking to do that now in the future yeah so now we want to focus specifically on the 1099 miscellaneous this is probably the form that the 1099 form that i spend the most of my time on um you know when should an employer employer issue a 1099 miscellaneous form um so we have two thresholds on that a 1099 miss is also used to report the payment of royalties to the extent the payment of the royalty is in excess of ten dollars a 1099 miscellaneous is required for our other boxes the threshold is six hundred dollars so if you've made payments to an individual for rent for example of less than six hundred dollars the 1099 miscellaneous would not be required because they're under the threshold but for payments of at least six hundred dollars in the items here so rents prizes and awards other income payments medical and health care payments crop insurance which i don't see too often but it is out there um and fishing boat proceeds any amounts in greater than six hundred dollars would require the 1099 miscellaneous reporting the six hundred dollar limit does not apply if there is any backup withholding required um jerry do you want to add anything on these 1099s the only thing i will add is because of the split out between the 1099 misc and the 1099 nac the boxes are going to look different this year for the 1099 misc so for those folks that have software please work with your vendors to ensure that the software is updated in the event you have queries that go from your payment system to the software ensure that the queries are properly updated to align with the new boxes in the 1099 mask excellent point jerry the the the form definitely looks different different for 2020. so in addition to the items reported on the last slide this form is also used to report direct sales of at least five thousand dollars of consumer products i think the the key point on this slide and this is a question i get quite often is payments to corporations um payments to corporations are not reported on a 1099 with the exception of law firms and and health care payments um i think this is a key question we get quite often um this is where although it's not necessarily a reporting requirement this is where we see often companies looking at do they have the proper processes in place to determine whether or not a recipient is a corporation an individual what it may be that really comes down to the form w-9 and as you're going to have a payee come on board filling that out so they can verify you their entity classification as well as their federal id number or social security number it will help you from a process standpoint to determine who needs a filing of a 1099 and who does not um we don't what we don't want to see is you don't know whether or not they're a corporation you've filed your 1099s and then someone calls you in march asking for a 1099 that they didn't receive and we have to go back and issue some additional forms again the normal due date of the 1099 miss is january 31st it'll be february 1st in 2021 so now for 2020 we have our new form the 109 and nec for non-employee compensation this form also has a threshold of six hundred dollars as to whether or not you have to file it this is really the replacement of the old 1099 box miscellaneous box seven non-employee compensation this is really for any payment you make to services performed by someone who is not an employee so an independent contractor um which can be in a variety of of things i think the old example the irs always used to use if you're paying someone for instance for cleaning the office for doing your landscaping those types of services that you are engaging with someone or an entity to do but not in the capacity of them being an employee um i think this is also good to note from an 1099 nec perspective that any payments to an employee whether current or former probably should not be reported on a 1099 nec and you should consider whether or not those should actually be reported on a form w-2 the nec should also be for payments made to an attorney and similar to the 1099 miscellaneous we have item payments that should not be reported on the 1099 nec which again are payments to a corporation payments for merchandise rent which has always been reported on the 1099 miscellaneous but those should still be and those should still be reported there and not reported on the 1099 nec payments to employees as i stated and former employees and payments to tax-exempt organizations and jerry i would think as we mentioned the systems issues around the 1099 miscellaneous there's probably going to be some systems review to make sure the 1099 nec is uploaded and ready to go as well absolutely this is a whole new form types this is a whole new form type that withhold agents should be looking at probably around this time of the year if you haven't already done so mainly because it usually takes some time to work with it to get new queries built to get data out of the system so because they're different boxes because um the dit process is complicated you want to give yourself as much lead time to work with it to get the new queries out you also want to get your new specification from your software provider so that you can get the query to align with the new specification for the 1099 nac one other key point john is unlike the 1099 misc which is due to the recipient at the end of january but isn't due to the irs until the end of march of your e filing the 1099 nac is due both to the irs and to the recipient at the end of january agreed and i think especially this year with a lot of companies not in the office um i would move as quickly as possible on the software side um to make sure this is up and running i think what we don't want is um you know we get to january 15th and all of a sudden something is not working on the new form and it's not being uploaded correctly yeah this is definitely not something anybody wants to tackle in january with all that goes on in january exactly um and as jerry just mentioned absolutely to recipient and irs by january 31st um and the the reason jerry touched on this earlier the the reason one of the one of the reasons this form came to be was because the 109 miscellaneous had various filing deadlines but if you were reporting in box 7 it had to be filed by january 31st whereas the other boxes did not so the irs has carved that box seven away from the miscellaneous to here but the absolute final requirement should be the 31st and you may truncate the recipient's social security number at fein most of the software systems i see actually are automatically truncating which is which is your option next forms 1099-r so when do we issue a 10-inr to an individual this is for any distribution of 10 or more so this is a relatively low threshold point um on any types of profit sharing retirement plans iras annuities pensions i i always explain to people like when i think of my old-fashioned like grandparents pension a check that comes on the first of the month every month for an extended period of time we would normally say that's what we would call a pension that would go on a tenant or um but it also includes permanent and total disability payments under life insurance contracts charitable gift annuities this form tends to be somewhat voluminous since the threshold is a ten dollar amount you would also report death benefit payments made by employers not part of the pension and disability payments made from a retirement plan so generally on a 1099-r um similar to the statement i made on the 1099 miss in nec we don't want to report any payments that are subject to withholding of social security taxes or medicare taxes on this form any payments that would be subject to those taxes still need to go on a w-2 even if it's for a former employee i'll see this question come up quite often for employees that might have a deferred compensation or some type of equity compensation that's paid out after they are have retired or left the company are no longer an employee to the extent those have a social security or medicare withholding requirement they would not go on the 1099-r they should go on a w-2 it is a fairly common error that we see there are other items you know we don't want to report tax exempt such as workers compensation um unless it's part of a distribution so for 1099 ours again we must furnish it to the recipient by january 31st of most years february 1st for next year and filed by the irs by march 1st of filing paper march 31st of electronic though most of my clients i see here report electronically because of the number of 1099-rs that they have um one interesting question on 1099. ours relates to state withholding state withholding on 10 on pension payments that are reported on 1099r is voluntary it is something that the recipient can request most employers and and employees are familiar with form w-4 or the state equivalence which is something an employee would fill out to determine their number of allowances and to be used on tax tables to determine what your employees withholding will be each pay cycle the federal government has a w4p for pensions most states have an equivalent w4p where an employee or former employee now a recipient of this 1099-r payments can request a percentage of taxes to be withheld from that payment so now we're going to go to the combined federal and state reporting program when you have a 1099 miscellaneous or 1099 nec state filing requirement if the state participates in the combined federal state program the internal revenue service is going to forward the to the state for you and separate reporting may not be necessary there are going to be situations where separate reporting is necessary but if the federal state program exists we usually let the irs do the work for us there are about 30 states that are in the federal state filing program and there are a few states that do not allow the filing in a combined status with the federal government where an employer may or may not have a requirement at the state level we'll get into the state pieces some states have requirements where 1099s only need to be filed if you've done any state withholding some states don't want them at all and some states will want them regardless even though they're not in the federal state program jerry i don't know if you had anything you wanted to add on the combined program the only thing i'll add there is the number of states that participate keep growing and growing which will make participation in this much more valuable and this year there might be a little bit of a gap where i think there's going to be some disconnect between the state and the federal as it relates to the 1099 nec so folks will want to make sure they're looking into making sure the 1099 nacs gets submitted as appropriate to the states that are impacted by that i mean the tenant nec is a new form but the irs did give us a long lead time that this form was coming but i think with offices being closed including state offices and state employees working from home i've not heard yet if states are up and running and ready to receive the nec or not um and we'll have to wait and see i don't jerry i don't know what you think i don't know that that's necessarily going to force an uh someone who's issuing 1099s to have to do a separate state reporting if the state is in the program that just don't have the setup yet or if it'll just be a delayed reporting from the federal government yeah i don't know how that's going to play out yet but it's definitely something that we're advising with total agents to keep a close look on between now and january to see if there's something additional that needs to be done so here are just a few examples of states that require separate federal and state reporting and again as jerry said states are joining the program more and more so this could change very rapidly but illinois kentucky louisiana montana oklahoma oregon pennsylvania rhode island and west virginia require separate reporting we have an asterisk on a few of the states and this goes to some of the comments i made earlier where state reporting may be required kentucky montana rhode island and west virginia only want a copy of the 1099 sent to them separately if you've withheld state income taxes um we don't often see state income tax withholding on independent contractors where we'll see on the nec we don't often see it on rents for example um but there are situations where state will have withholding sometimes it is tied to federal backup withholding um and sometimes it's just a separate requirement but for these asterisk states we're only going to have a filing requirement if you've withheld any state income taxes during the year so we're going to go to our next question which should be on your screen to answers do you file state forms in the states not in the combined program so for the states i just listed where they do require separate reporting do you actually do the state filings or do you only file at the federal level jerry i don't know if you have any anecdotal experience on what you see companies do when they've got 1099's reported in in these states that have a separate filing whether or not they're actually doing those um i would like to think everyone is trying to be as compliant people are indeed fallen yes um i do know that where there's an option between submitting the one time to the irs and the combined federal state program more people opt to participate there than really people have people don't typically have a burning desire to keep track on how to submit for all the states that require submission and because they're all in different formats so where it can be avoided i think most people jump all over that i even see the technology companies trying to avoid having to submit in many different formats to many different states yes and i think for for companies this is a perfect example about why software is important and where you can use it i mean to file these via paper with all the different regulations is certainly difficult yeah and more difficult this year than any any year before this absolutely yeah so now that we've mentioned the potential for withholding um we're going to talk about that a little bit so the internal revenue service will require federal tax withholding now for 1099 payments we call it backup withholding the main case i see is when we've made payments to individuals who have failed to provide a taxpayer id number or a valid certification of that number and when we do have backup withholding that also has to be reported on the form 1099 whichever form it may be whether it's the miscellaneous or the nec the backup withholding amount remember if we do have any negates the filing threshold of a six hundred dollar limit on the 1099 nec and the tenant miscellaneous jerry do you want to add any commentary on the backup withholding requirements um no only that a couple of years ago the rate changed from 28 to 24 so for those that haven't already done so most people that i've come across have already done so but you know thought it will mention it to ensure that people are covering that yes and backup withholding it's an extra process it can be hard to manage um and this is where the key to the process up front comes in having that w-9 and that certification from the individual or the entity on their fein number should negate the requirement for backup withholding it will save a lot of headache and a lot of administrative burden in the future if you don't have to do backup withholding yeah on the practical side many people struggle to actually apply backup tooling because typically it's a manual process it's difficult to track difficult to align your irs deposits with the amount of money that you withhold a lot of people that have backup patrol and obligations struggled between january and december deciding what payments relate to december what payments released to january like john said the best bet is to do everything you can to properly onboard board reportable persons to ensure you don't have a backup between an obligation and where possible make sure your tin check-in to ensure that the name and tin combinations are correct that you get potentially upfront when you're still engaged with the person who gave you that information to get updated information because one on one way of having to enforce backup with holland is if you report somebody who gave you a w9 but the name intent doesn't match what the irs recognizes and ultimately they get put in b notice and you're you're forced to put them on backup without so it makes i mean like john was saying it it makes a lot of sense to do everything you can during the onboarding process to get correct documentation to alleviate the burdens that would come later on yes and i would say probably even as early as five years ago i didn't have a lot of clients that were working on the startup of the process and getting that but i've definitely seen some great strides in that in the last five years um i think it's certainly with technology it's easier to to gather this information but it's also as a result of this is something the irs does look at they will request the backup withholding um and once a company gets forced into doing backup withholding and the administrative burden around it they will quickly switch their processes around it and in addition to backup withholding some states may require state income tax withholding mandatorily when federal backup withholding is done so if you end up having to do federal backup withholding you're adding another layer of complexity administratively in that you may have to do some state and local income tax withholding as well um and not only having to do that withholding but now you're necessitating probably a 1099 filing requirement at a state level for a state that normally would not require it um i think with my payroll hat on the other issue to consider is i mean obviously often 1099 payments and 1099 reporting can be driven from an accounts payable department when you have withholding those taxes normally need to be deposited with the payroll department many companies use outside payroll providers and in all states with the payroll tax at the end of the year there is a a payroll tax reconciliation report that has to be filed that lists employee wages and in many states it says and all withholding taxes paid and withheld this year that includes state backup withholding in addition to employee withholding that is very difficult to get a combined reporting of the two when you use an external payroll provider um that may require cause additional filings um and notices from the state so the states may require that and i think it all just goes back to process up front yeah the one thing i will say john um just to chime in a bit with the withholding it's while it's difficult it's by far the biggest exposure that a withholding agent has typically when they're under audit um or if something comes up during their internal audit where withholding should have applied but it didn't oftentimes it's very difficult to reach out to the vendor or the service provider to get them to pay to withhold in the way the the rules work if you don't have a tin or in the appropriate format at the time you make that payment you have the obligation to withhold and oftentimes when i see withholding agents cut and check to make things right with the governments it's the biggest part of the check is to pay withholding taxes that should have should have been paid by the vendor or the service provider up front and just you know because of a lapse in the process that we're told in knowledge we're not collected and deposited to the irs i don't know what you're seeing on the payroll side uh very similar very similar and i think you know the the most we can do on processes to curb that um especially with companies looking at cash flow in 2020 and 2021 um this can be a quick way to fix that up so we're going to go to our next question which is do you withhold state income taxes on independent contractors um yes now we're considering this for the future um while you're answering that i would say probably even three years ago most companies would have said no a good 99 would have said no um but that is starting to change as states are implementing um sometimes mandatory withholding on independent contractors especially non-residents so now we're going to jump into some of the states that have withholding tax requirements on non-resident contractors many of you may be familiar with the concept of non-resident withholding on employees who travel for business i will use me as an example i'm based in the new york office i travel all over the country and as employees you can have withholding in all those states based on sourcing your wages to where you physically perform services that's probably no more true in 2020 especially with employees now working from home or from other remote locations and the potential implications of multi-state withholding that's been a growing trend for about 15 years now with many states looking to for employers to source wages and withhold on employees the next phase of that has been to start withholding on non-resident contractors who are providing services in these states the overlying theory from states is all individuals should pay income taxes based on where their income is sourced to the state where they earned it states are now expanding that saying if you have a contractor coming into my state to do work i'm going to require some withholding because if i require withholding in theory it's going to force the contractor you're going to report on that 1099 to them it'll force them to file a non-resident return so that the state can recoup the taxes for the amount of payments sourced and earned in that state the first state to really do this not surprisingly is california um which has a seven percent withholding on gross payments if the non-resident independent contractor is paid more than fifteen hundred dollars for services performed in the state maine has a five percent withholding requirement but interestingly enough as per our previous life only when federal income tax withholding was required so this is one of the key states that ties into backup withholding new jersey's at seven percent south carolina's rule is fairly new where the non-resident is performing services in south carolina temporarily and compensation exceeds ten thousand dollars is a two percent withholding requirement now i think the biggest question i get from companies is how am i gonna know how am i going to know if i'm hiring this contractor where are they going um that is a difficult question it's not an easy answer it's probably not easy to track but it is something that we're seeing as a growing trend that states want to see companies track that information and allocate those payments and withhold where necessary um there are two states that have very stringent 1099 reporting requirements um california and pennsylvania california's is a relatively older pennsylvania's is relatively newer and i think i've recently seen some potential legislation for other states to expand to these types of rules in 2021 so the good news is california is a combined federal state in the federal state reporting program so we don't have to send separate forms to california as we said before for the non-residents performing services in california there's a withholding rate of seven percent on gross payments if there's more than fifteen hundred dollars in services in the state what california has done is tried to make this very similar to employee withholding and that they want you to use a pay-as-you-go system so not just withhold at the end of the year or withhold from one payment they want you to withhold continually and to report and remit those taxes um on regular tax quarterly due dates so april 15th june 15 september 15th and january 15th luckily california does not require an annual reconciliation of form 1099 and w-2 that goes to the point i was making earlier where if your w-2s and 1099 annual reconciliations are combined reporting for the end of the year and you've got one system and one supplier reporting w2 wages and withholding and another system reporting 10.99 withholding it's difficult to reconcile again the due date for these forms of january 31st through the combined program so pennsylvania's rule is relatively new from 2018 a little bit different than california first off pennsylvania is not in the combined federal state reporting program number one so you may have a separate filing requirement to pennsylvania um this became effective in january 1st of 2018 requiring payers of non-employee compensation which would be the ones reported now on the form 1099 nec to withhold income tax for such payments for non-resident individuals the law specifically excludes payments to government governments including the u.s government the state of pennsylvania and all of their political subdivisions and agencies residential rental payments are also exempt from withholding which is probably one of the good things in this law because of the number of companies that pay rent to landlords throughout the state so pennsylvania has a flat withholding rate of 3.07 required for payments of 5 000 or more annually to any non-residents performing services in pennsylvania withholding is optional on payments less than five thousand i can't say i can understand why they put that in i do have some companies that are doing this non-resident withholding in pennsylvania but none that are doing it voluntarily if the payments in total are less than five thousand dollars these due date this forms are also due to the state by january 31st similar to the federal the one difference in pennsylvania is pennsylvania's annual reconciliation for employee payroll reporting and withholding is combined with the 1099. this administratively can be very difficult when you're working with a payroll provider to the extent you've done any pennsylvania withholding i would make sure to reach out to your payroll departments and they can reach out to their providers to see how this combined filing is going to be done it has been a difficult process for a lot of my clients that are doing this one other 1099 withholding requirement is massachusetts in the last few years paid it passed a law on paid family medical leave this was really for employees there is a mandatory requirement for the employer to fund paid family medical leave programs in the state um it is although the ultimate liability is on the employer they may pass a portion of the payment on the paid family medical leave to employees what most people did not realize is buried within this law is that the paid family medical leave withholdings are not only applicable to employees they are also applicable to independent contractors that you're paying in the state of massachusetts now massachusetts does is part of the federal combined program but you may have a withholding requirement to massachusetts there are a number of rules around this um you are actually for your independent contractors in massachusetts supposed to reach out to them proactively to see whether or not they would like to have this paid family medical leave taken from their payments if they do you will be required to withhold it this has been a very difficult administrative process to roll out for my clients and companies in massachusetts because independent contractors are treated as they should be completely separate from employees separate departments these withholdings though have to be paid and deposited along with your payroll tax deposits for paid family medically from employees um we've not seen any updates on this law i know there were a lot of questions back to the state around the independent contractors being included because of the difficulty around it but so far this is still intact so i would encourage everyone to just review those rules and see if you do have independent contractors in massachusetts and what requirements you need to fulfill on that and that brings us to the end of our presentation uh john yes before we close up i thought i'll ask a question sure i'm seeing some struggles with people on the federal side as it relates to the reporting of payments of paid family medical to independent contractor can you share some practical examples of what you're seeing in that space and how people are reporting that to be honest i don't really have a lot of companies that are doing it yet but i have a lot of companies that are trying to figure out how to do it um they know it's something they need to do and get a hold on it had some traction i think with with lockdowns and companies offices shutting down i think some things have been pushed back a little bit um i don't have a good answer yet on how companies are doing it but i know a lot are looking at it to try and figure out what they need to do okay i think one of the problems is unlike employees because they're in the payroll system it's easy to find contractors come and go you may have someone who's a contractor every year for a little bit of time you may have one that only comes every two three years um and trying to figure that out is is can be difficult yeah i'm getting pulled into a lot of abatement letter request for assistance to help companies write their abatement letters and that's kind of the struggles that i'm seeing is that when these payments are being reported to independent contractors i mean some companies have thousands of independent contractors that they're making payments to and sometimes they would make payments to them in the future or sometimes they won't but they will never really be able to close the account so it makes it somewhat of a challenge to write an upbeat letter about the next steps that these companies can take especially as it relates to the paid family medical leave and sometimes you know the majority of the folks that they have will never make a claim in the future therefore never have something to be reported um so it kind of leaves a tricky situation it's not something where someone can just for example in a normal say um 1099 space on the banking side you can close an account in in the independent contractor area it's not the same and there's a lot of restrictions so with whole agents tend to find themselves in a bind as it relates to um handling b notices for example which is a which is a name tin mismatch letter that comes saying that the the name intent for the independent contractor doesn't match with the irs has a record and now i'm also seeing it make its way through to the 972 cg which is the penalty notice that follows that so companies are being penalized um you know the 270 280 for each mismatch that they had and there's very little recourse that they have to try to abate some of that yes and i think also on the on the paid family medically front this is a growing legislative trend we're seeing a lot of states introduce legislation around mandatory paid family medical leave um with holdings and requirements um and so i think this is going to be something that's going to be growing even more yeah so this is something probably we will probably be watching closely as it becomes more mature and more returning agents are trying to comply with it yes so we are just about at our time perfectly um so we want to thank you for joining us we hope you enjoyed it found it informational as we said in the beginning this will be posted we're going to be going into the chat now to try and answer questions live um and thank you very much thanks jerry thank you yeah