In Notice 2018-99, the Internal Revenue Service sets forth interim guidance for taxpayers to determine parking expenses for qualified transportation fringes (QTFs) that are nondeductible and for tax-exempt organizations to determine the increase in unrelated business taxable income (UBTI) attributable to nondeductible parking expenses. The Tax Cuts and Jobs Act (Act) amended these tax provisions effective for amounts paid or incurred after December 31, 2017.
Articles Discussing General Topics In Employee Benefits.
As tax time rapidly approaches, taxpayers in states with high state and local income taxes (such as New York) are about to learn, up close and personal, just how much the loss of the deduction for state and local taxes (SALT) will affect their personal tax liability. A little-publicized provision of the New York Tax Law, however, may take away some of the sting of losing the SALT deduction.
For HR offices, December is typically a time to recover from open enrollment, tie up loose ends, and look forward to 2019. Lost in the busyness of the last few months may have been some retirement plan guidance from the Internal Revenue Service regarding its Employee Plans Compliance Resolutions System (EPCRS). In Revenue Procedure 2018-52 (September 28, 2018), the IRS has outlined new filing requirements for its Voluntary Correction Program. This guidance essentially amends and restates Rev. Proc. 2016-51, which, as described below, will have limited applicability after December 31, 2018.
In IRS Notice 2018-94, the IRS announced an extension for furnishing 2018 IRS Forms 1095-B (Health Coverage) and 1095-C (Employer-Provided Health Insurance Offer and Coverage), from January 31, 2019, to March 4, 2019. The IRS issued this extension in response to requests by employers, insurers, and other providers of health insurance coverage that additional time be provided to gather and analyze the information required to complete the Forms and is largely identical to the extension the IRS provided for furnishing the 2016 and 2017 Forms. Despite the extension, the IRS encourages employers and other coverage providers to furnish the Forms as soon as possible.
Earlier this year we reported on legislative changes that modified the requirements related to hardship distributions from 401(k) plans. Recently, the IRS issued proposed regulations that if finalized will implement those changes.
On November 1, 2018, the Internal Revenue Service (IRS) announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for the 2019 tax year. These limits include both employee and employer contribution limits. The list below details some of the key limit increases and those limits that remain unchanged effective January 1, 2019:
On October 3, 2018, the IRS issued transitional guidance in Notice 2018-76 concerning the business expense deductions for meals and entertainment following the changes made by the Tax Cuts and Jobs Act (“TCJA”) — which generally disallowed a deduction for expenses related to entertainment, amusement or recreation, but did not specifically address the deductibility of business meal expense.
As anticipated by plan sponsors of closed defined benefit pension plans, the IRS issued Notice 2018-69, the fourth extension for an additional year of the temporary nondiscrimination relief for “closed” defined benefit pension plans originally announced by the IRS during 2014. The extended relief applies to plan years beginning before 2020 for those “closed” plans that satisfy certain conditions in Notice 2014-5. The relief for “closed” defined benefit plans refers to those defined benefit plans amended prior to December 13, 2013, to limit ongoing accruals to some or all employed participants in the plan as of a particular date, thus no longer admitting new participants into the plan.
As we advised was likely during our June 29, 2019 webinar, Association Health Plans—Are They Really an Option to Consider?, at least two states were likely to challenge the enforceability of the new regulations issued by the Department of Labor that expand the definition of “employer” for groups who are qualifying association health plans (“AHP’s”).
New Agency Guidance Makes Mental Health Parity and Addiction Equity Act Enforcement a Priority. A review of the parity compliance issues for plans and insurers providing mental health and substance use disorder benefits.
Occasionally qualified plan administrators discover that their plans have incurred an operational error. The Internal Revenue Service (“IRS”) recognizes that it needs the help of plan administrators to police the administration of qualified plans and has correspondingly published guidance to help plan administrators take appropriate corrective action where necessary.
As discussed during our recent webinar, the finalized DOL regulations for qualifying “association health plans” will likely create new opportunities for sole proprietors and other primarily small businesses and other trade groups to band together in a coordinated manner to purchase more affordable health insurance as a “single employer” in 2019 and beyond.
On June 21, 2018, the Supreme Court held in Wisconsin Central Ltd. v. United States that railroad stock options are not taxable compensation under the Railroad Retirement Tax Act of 1937 (the “RRTA”). This ruling represents a significant win for railroad companies.
On June 19, 2018, the Department of Labor issued its highly anticipated final rule expanding the availability of association health plans (“AHPs”). The core purpose of an AHP is to allow small employers to band together and obtain coverage in the large group insurance market, which generally imposes fewer coverage requirements. For example, unlike the small group insurance market, policies issued in the large group insurance market are not required to cover “essential health benefits.”
Outside of potential minimum wage issues, there is no federal law requiring employers to reimburse employees who use their personal vehicles for business purposes.