Posts Categorized: Tax Issues

Transit Benefit Extension Approved

in Tax Issues, Welfare Benefits

Last night the House approved the extension of the current income tax rates and unemployment insurance benefits. President Obama is expected to sign the bill today or tomorrow. The bill includes an extension of the transit-parking parity rules for another year. Thus, for 2011 the parking and the mass transit limit will now be $230 per month. The extension of the parity rules begins to apply January 1, 2011. See, Section 727 of the attached bill:  http://www.rules.house.gov/111/LegText/111_satohr4853_txt.pdf

Transit Benefit Extension

in Tax Issues, Welfare Benefits

The current transit benefit of $230 per month expires at the end of this month, and the transit benefit reverts back to its prior limit of $120 per month. The legislation to extend the current income tax rates and unemployment insurance benefits is currently being drafted in the Senate. This legislation also extends the increased transit benefit of $230 per month through December 31, 2011. The legislation is expected to be voted on in the Senate early next week, and thereafter addressed by the House.

State Income Tax Imputation

in Affordable Care Act, Tax Issues

While health plans are required to provide coverage up to age 26 for dependent children, several states have not adopted the updated Internal Revenue Code in order to make this coverage tax-free.  This means that for about a dozen states income imputation for dependent child coverage will be required for state income tax purposes.  However, keep in mind that the existing dependent rules of a qualifying child (under age 24 and a full time student) or a qualifying relative (any age but the parent must provide over one-half of the financial support for the child) still apply.   Some employers are requesting… Continue Reading

Form W-2 Reporting Delayed

in Affordable Care Act, Tax Issues

The Affordable Care Act provides generally that the aggregate cost of employer-sponsored health coverage must be reported on a Form W-2.   For this purpose, the aggregate cost is to be determined under rules similar to the rules for COBRA continuation coverage.  This rule is effective for taxable years beginning on or after January 1, 2011.  See, Code Section 6051(a)(14). This morning, the IRS issued Notice 2010-69, which stated that the Form W-2 reporting requirement is not mandatory for Forms W-2 issued for2011.  Accordingly, an employer will not be treated as failing to meet the requirements for 2011, and will not be subject to any penalties for failure to meet… Continue Reading