The IRS issued a notice Monday providing guidance to small businesses that are eligible to claim a tax credit for employee health insurance coverage (Notice 2010-44). The Patient Protection and Affordable Care Act (PL 111-148) enacted new IRC § 45R, which allows certain eligible small businesses to claim a tax
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TOPICS / TAX
Employee benefits
Final Interim Regulations Issued on Adult Dependent Health Coverage
On Monday, the IRS, along with the Department of Labor and Department of Health and Human Services, issued interim final regulations for group health plans and health insurers relating to dependent coverage for children under the age of 26 (TD 9482). The regulations complement guidance issued by the IRS on
IRS Releases HIRE Act Employee Affidavit Form; Posts FAQs
The IRS released new Form W-11 on Wednesday for certifying that employees are qualified employees for purposes of tax benefits under the Hiring Incentives to Restore Employment (HIRE) Act (PL 111-147). The HIRE Act, enacted on March 18, created a payroll tax credit for employers who hire workers who have
Tax Filing Season Resources—Tax Year 2009
This is the one-stop shop for all the updates you need to know for this year’s tax filing season. Find resources from the JofA and The Tax Adviser, plus tax return checklists and tax savings tips from the AICPA, categorized by tax topic. INDIVIDUAL TAX IRS Reports Average Refund Size Is
Tax Provisions in the Health Reconciliation Act
Late Thursday, Congress passed the Health Care and Education Reconciliation Act of 2010 (HR 4872). The bill now goes to the president for his signature. The Reconciliation Act amends various provisions of the Patient Protection and Affordable Care Act (PL 111-148), the large health care reform act that was enacted
President Signs Extension of COBRA 65% Subsidy
President Barack Obama signed into law on Wednesday the Temporary Extension Act of 2010 (HR 4691), hours after the Senate passed it by a 78–19 vote. The main purpose of the bill is to extend unemployment benefits and health care subsidies for the unemployed, but it also extends through March
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SECURITIES BASIS REPORTING PROP. REGS ISSUED The IRS issued proposed regulations (REG-101896-09) in December relating to how securities brokers report sales to the IRS and how stock basis is determined. The regulations also proposed a Feb. 15 annual deadline for brokers to supply certain information statements. The proposed rules reflect
The ESOP Exit Strategy
The scenario is all too common. A majority partner wants to retire, but the remaining partners can’t afford to buy him or her out, or they want out themselves. Key employees eye the door as rumors swirl that the company may be sold to a larger competitor that is sure
Tax Court Rules on Valuation of Life Insurance Policy in Bargain Sale
In a case of first impression, the Tax Court has held that where taxpayers purchased a life insurance policy on their lives from their profit-sharing plan, they could not reduce the taxable value of the policy by the amount of the policy’s surrender charge (Matthies, 134 T.C. no. 6). The
Final Regs Expand ISO, ESPP Reporting Requirements
IRC § 6039 requires corporations to furnish a written statement containing certain information to an employee who exercises incentive stock options (ISOs) or who receives stock under an employee stock purchase plan (ESPP). In 2006, Congress expanded these reporting obligations by requiring that corporations also furnish information to the IRS.
IRS Updates Method Thresholds for Vehicle Fringe Benefits
The IRS has updated for 2010 (Revenue Procedure 2010-10) the maximum allowable fair market value (FMV) of an employer-provided vehicle for which the cents-per-mile and fleet-average rules may be used in determining the value of an employee’s personal use of the vehicle. For passenger automobiles, the new maximum FMV is
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SINGLE-EMPLOYER DEFINED BENEFIT PLANS GET GUIDANCE The IRS issued final regulations to provide guidance on funding requirements affecting single-employer defined benefit pension plan sponsors, administrators, participants and beneficiaries. The regulations in TD 9467 concern (1) the determination of the value of plan assets and benefit liabilities for purposes of the
Deadline for Retirement Plan Amendments to Conform to Recent Laws Extended
The IRS has extended by one year the deadline for retirement plans to make amendments required by the Pension Protection Act (PPA) and last year’s Worker, Retiree, and Employer Recovery Act (WRERA) (Notice 2009-97). The deadline is extended to the last day of the first plan year that begins on
Accountable Plan Reimbursements for Tools and Equipment
In a recent private letter ruling, the IRS clarified how employer reimbursement of employee expenses for tools, equipment, training or certification required as a condition of employment may qualify as an accountable plan under IRC § 62. Reimbursements under an accountable plan are excluded from gross income of employees and
ESOP Redemptions Not Deductible as Dividends
The Third Circuit Court of Appeals joined the Eighth Circuit in ruling that even if cash payments to redeem employee stock ownership plan (ESOP) accounts are otherwise deductible dividends within the meaning of IRC § 404(k), an employer is barred by section 162(k)(1) from deducting the payments if they are
Related Parties Must Share Employee Stock Option Costs
A panel of the U.S. Court of Appeals for the Ninth Circuit held that employee stock option (ESO) costs incurred by one company participating with related companies in a cost-sharing agreement (CSA) in the late 1990s must be allocated among the research and development (R&D) costs of all the participants
IRS Provides 2009 RMD Rollover Relief for IRA, 401(k) Distributions
The IRS on Thursday issued Notice 2009-82 to provide relief for taxpayers who have received required minimum distributions in 2009 from an IRA or similar account. Such taxpayers have until Nov. 30, 2009, (or within 60 days of the distribution, whichever is later) to roll over the distribution into another
IRS Boosts Tax Incentives for Retirement Savings
The IRS released several pieces of guidance Tuesday designed to boost tax incentives for retirement savings. The initiatives include expanded opportunities for automatic enrollment in 401(k) plans, vehicles for taxpayers to save their tax refunds and convert accrued vacation time into savings, and better explanations of the available options for
Full-Time Medical Residents Not Exempt From FICA
Several circuits have ruled on whether medical residents are eligible for the student exception to FICA (see “Tax Matters: FICA for Medical Residents Splits Circuits,” JofA, Jan. 08, page 73). Until recently, the issue had been whether a medical resident could be considered a “student” and a hospital could be
Comments Sought on Partnerships, Combined Pension Plans
The IRS requested public comment Wednesday on proposed regulations issued earlier on allocation of gain or loss in partnership mergers. In a separate notice, the Service invited comment on combined defined contribution and defined benefit plans under IRC § 414(x), on which the Service plans to issue guidance before it
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FROM THIS MONTH'S ISSUE
Tax season quick guide
Get ready for tax season with the JofA’s annual filing season quick guide, an easy-to-use compilation of dollar thresholds, tax tables, standard amounts, credits, and deductions. Download and print for quick reference this tax season.
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