Industry & Regulatory NewsIRS Issues Deadline Relief for Tennessee Storm Victims
The IRS has issued a news release announcing the postponement of tax-related deadlines for Tennessee victims of severe storms, straight-line winds, tornadoes, and flooding. The tax relief postpones various tax filing and payment deadlines that occurred starting March 25. Affected taxpayers with a covered deadline on or after March 25, 2021, and before August 2, 2021, will have until August 2, 2021, to complete certain time-sensitive, tax-related acts. This includes the May 17 deadline for filing 2020 individual income tax returns and paying any tax due. Taxpayers also have until August 2 to make 2020 IRA contributions.
Industry & Regulatory NewsIRS Provides 2022 Amounts for HSAs and HRAs
IRS Revenue Procedure (Rev. Proc.) 2021-25 provides the 2022 inflation-adjusted amounts for health savings accounts (HSAs) and the maximum amount that may be made newly available for expected benefit health reimbursement arrangements (HRAs).
Industry & Regulatory NewsIRS Notice Addresses Taxation of Dependent Care Benefits
On May 10, 2021, the IRS released Notice 2021-26, which addresses the taxation of dependent care benefits available during taxable years ending in 2021 or 2022 because of a carryover or extended claims period enacted under the Consolidated Appropriations Act, 2021 (CAA). This notice clarifies that amounts that would have been excluded in the prior tax year remain excludable from income in the subsequent tax year. In particular, Notice 2021-26 provides three examples to illustrate when amounts carried over or available under an extended claims period are excludable from income, as follows.
Industry & Regulatory NewsIRS Guidance Affects Employment Taxes and COBRA Premium Subsidy
The IRS issued Notice 2021-24, which provides guidance following the passage of the American Rescue Plan of 2021 (ARPA). The Notice provides information regarding the applicable penalty relief available to an employer under the ARPA for failing to pay employment taxes in anticipation of a credit for COBRA premium assistance paid to assistance-eligible individuals.
Industry & Regulatory NewsWashington Pulse: New Coronavirus Law Provides Retirement Plan and Healthcare Relief
With virtually every part of the U.S. economy facing unexpected financial challenges from the coronavirus (COVID-19) pandemic, Congress has passed the largest relief package in U.S. history. Signed into law on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act is designed to assist the millions of Americans affected by the outbreak. The legislation has multiple provisions that affect retirement and health savings arrangements.
Industry & Regulatory NewsIRS Q&A Clarifies Partial Plan Termination During COVID-19 Pandemic
The IRS released a five-part Q&A on the temporary partial plan termination rules for qualified retirement plans in accordance with the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (the Act). Generally, there is a presumption that a partial plan termination has taken place when an employer’s turnover rate is at least 20 percent during the plan year. Partial plan termination requires those participants covered under the portion of the plan that is terminated to be fully vested.
Industry & Regulatory NewsIRS Publication Provides Some Details on Beneficiary Rules and CRD Repayments
The 2020 tax year version of IRS Publication 590-B, Distributions From Individual Retirement Arrangements (IRAs),reflects the following noteworthy updates pursuant to the passage of the Setting Every Community Up for Retirement Enhancement (SECURE), Coronavirus Aid, Relief, and Economic Security (CARES), and Consolidated Appropriations Acts.
Industry & Regulatory NewsIRS Confirms Tax Filing Extension and Announces Postponed IRA, HSA Contribution Deadline
The IRS has issued Notice 2021-21, in which the IRS makes official the previously announced delay of the April 15, 2021 federal income tax filing due date for individuals for the 2020 tax year to May 17, 2021. This delay is a result of the ongoing COVID-19 Emergency Declaration issued in March 2020.
Industry & Regulatory NewsIRS Provides Guidance on Personal Protective Equipment as Medical Expense
The IRS has issued Announcement 2021-7, indicating that amounts paid for personal protective equipment (PPE)—such as masks, hand sanitizer, and sanitizing wipes—that are primarily used to prevent the spread of COVID-19, are treated as amounts paid for medical care under Internal Revenue Code Section 213(d). As a result, the amounts are also eligible to be paid or reimbursed under health flexible spending arrangements (FSAs), health reimbursement arrangements (HRAs), and health savings accounts (HSAs).
Industry & Regulatory NewsIRS Announces Extension to File Tax Return
The Treasury Department and IRS have announced that tax filing due dates for 2020 tax year federal income tax returns, including the federal income tax payment deadline, will be automatically extended from April 15, 2021, to May 17, 2021. No special form must be filed to request the filing extension. The IRS will be providing formal guidance in the coming days.