The IRS announced that it will permit companies to amend their Sec. 125 cafeteria plans to allow participants in health flexible spending arrangements who do not use all of the money in a plan year to use up to $500 in the next plan year, in addition to the regular $2,500 limit during the succeeding year. Employers may amend their cafeteria plans to adopt the carryover provision for the current cafeteria plan year or any subsequent plan year.
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Employee Benefits
Establishing a Corporate Dependent Care Assistance Program
A dependent care assistance program is a tax-favored arrangement by which the employer reimburses employees for dependent care expenses, makes payments to third parties for care of employees’ dependents, or provides a dependent care facility for employees.
PPACA Guidance Clarifies Rules for HRAs, Health FSAs, and Other Accountable Plans
The IRS provided guidance on when employers may use arrangements such as an HRA or a health FSA to provide employees with a fixed amount to pay for health care premiums and other eligible medical expenses.
Treasury Releases Proposed Regs. for Health Care Information-Reporting Requirements
The Treasury Department and the IRS released long-awaited notices of proposed rulemaking on information-reporting requirements for employers and health insurers under Secs. 6055 and 6056, as enacted by the Patient Protection and Affordable Care Act.
Top Tax News Developments in 2013
The past year featured a large number of tax developments, some of which got extensive coverage in the media, and many of which got less coverage but affect almost all taxpayers and practitioners. As we get ready to welcome a new year, here’s a look back at the most important
Notice Answers Many Post-Windsor Questions on Cafeteria Plans, FSAs
The IRS continues to consider the effects of the Supreme Court’s Windsor decision on federal tax law, and its most recent guidance deals with elections and reimbursements for cafeteria plans, HSAs, and health, adoption, and dependent care FSAs.
IRS Releases Rules for In-Plan Rollovers of Roth Accounts
The IRS released rules in question and answer format for in-plan rollovers to designated Roth accounts in retirement plans.
Income Verification for Insurance Premium Tax Credit Included in Deal to End Government Shutdown
The law enacted on Oct. 17 to fund the federal government through Jan. 15 and to extend the federal government’s borrowing authority through Feb. 7 contained one tax provision, making a minor change to 2010’s health care legislation.
Health Coverage Information-Reporting Requirements Guidance Issued
The IRS issued two related proposed regulation projects on health care coverage reporting requirements under the Patient Protection and Affordable Care Act.
Post-Windsor FICA Refund Procedures
The IRS announced procedures employers should follow for filing refund claims for overpaid FICA and income taxes paid on employer-provided benefits for same-sex spouses that, because of the Windsor decision, are now tax free.
Current Developments in Employee Benefits and Compensation
While the health care law garnered much of the attention this past year, other developments unrelated to the new law in the employee plans area were just as significant—including the American Taxpayer Relief Act of 2012 and the Supreme Court’s decision in Windsor.
Regs. Permit Midyear Changes to Employer Contributions 401(k) Plans
The IRS issued final regulations that permit employers to make midyear reductions or suspensions of safe-harbor matching or nonelective contributions to retirement plans in certain situations.
Health FSA Use-It-Or-Lose-It Rule Modified to Allow a $500 Carryover
The IRS will now permit companies to amend their cafeteria plans to allow participants in health FSAs who do not use all of the money in a plan year to use up to $500 in the next plan year, in addition to the regular $2,500 limit during the succeeding year.
Small Employers’ Health Insurance Premium Tax Credit Rules Proposed
The IRS issued proposed regulations governing the Sec. 45R credit for small employers that offer health insurance coverage for employees.
Individual Health Care Mandate Rules Finalized
The IRS released final regulations on the Sec. 5000A shared-responsibility payment—the penalty or tax imposed on individual taxpayers who do not obtain minimum essential health care coverage beginning in 2014.
Government Shutdown, Debt Ceiling Deal Includes One Tax Provision
Wednesday’s deal to fund the federal government through Jan. 15 and to extend the federal government’s borrowing authority through Feb. 7 in the end contained only one tax provision, making a minor change to 2010’s health care legislation.
Orthodontist Sues to Reinstate Employer Mandate in Health Care Law
An orthodontics practice in Florida filed suit to force the federal government to reinstate the original effective date of the Sec. 4980H shared-responsibility penalty that was passed as part of the Patient Protection and Affordable Care Act.
Preventive Health Services With No Deductible Qualify as High-Deductible Health Plans
The IRS issued a notice clarifying that preventive health services that are provided without a deductible under a health insurance plan will not disqualify a high-deductible health plan.
Health Coverage Information Reporting Requirements Guidance Issued
The IRS provided guidance to providers of minimum essential health coverage that are subject to the information-reporting requirements of Sec. 6055 to employers subject to the information-reporting requirements of Sec. 6056.
IRS Postpones Large-Employer Health Care Penalty and Information-Reporting Requirements
The IRS announced a one-year postponement of the large-employer health care penalty and certain information-reporting rules that were enacted as part of 2010’s health care reform legislation.
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