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Archive for 2020

IRS Releases 2021 Cost of Living Adjustments for Certain Tax Provisions

Yesterday, the IRS released IRS Revenue Procedure 2020-45 which provides the 2021 cost-of-living increases for inflation for certain items. In addition, the IRS also released today Notice 2020-79 which provided the 2021 COLA increases for retirement plans, including 401(k) plans.     Taxable Years Beginning in 2021 Taxable Years Beginning in 2020 Limit on voluntary employee salary reduction contributions to a health flexible spending arrangement (Section 3.17 of Rev. Proc. 2020-45) $2,750 $2,750 Monthly limit on fringe benefit exclusion for transit and parking (Section 3.18 of Rev. Proc. 2020-45) $270 $270 Maximum exclusion for qualified adoption expenses furnished pursuant to an adoption assistance… Read More

DOL Releases New Q&A Related to Families First Coronavirus Response Act (FFCRA)

August 28, 2020   Yesterday, DOL released 3 new Q/A’s (98, 99 &100) offering insight on how employers should administer leave under the Families First Coronavirus Response Act (FFCRA) when an employee requests leave because a child’s school is closed or child care unavailable.  Look at question 99, it offers guidance regarding eligibility when parents are given a choice of between having a child attend in person or participate in a remote learning program for the fall.   98. My child’s school is operating on an alternate day (or other hybrid-attendance) basis. The school is open each day, but students alternate between… Read More

IRS Releases 2021 Limits for HSAs

On May 20, 2019 the IRS released Revenue Procedure 2020-32 which provides the 2021 inflation adjusted amounts for high deductible health plans (HPHPs) Health Savings Accounts. The amounts for HSAs for 2021 as compared to 2020 are as follows: 2020 Rev. Proc. 2019-25 2021 Rev. Proc. 2020-32 Annual limitation on deductions to a HSA – self-only coverage $3,550.00 $3,600.00 Annual limitation on deductions to a HSA – family coverage $7,100.00 $7,200.00 HDHP – self only coverage – Annual deductible not less than: $1,400.00 $1,400.00* HDHP – self only coverage – Annual out-of-pocket expenses do not exceed: $6,900.00 $7,000.00 HDHP –… Read More

IRS Releases New Guidance on Cafeteria Plans and ICHRAs

Today, IRS released Notice 2020-29 and 2020-33. These notices provided new relaxed rules for 2020 for making elections under Cafeteria plans, using amounts during a grace period or carryover period changes to the method determining the carryover amounts under Health FSAs and clarifying which premiums can be reimbursed under ICHRAs. The following is an explanation of both notices. Notice 2020-29 In Notice 2020-29, the IRS provides for increased flexibility with respect to mid-year elections under a cafeteria plan during calendar year 2020 related to employer sponsored health coverage, Health FSAs and DCAPs. This notice also provides increased flexibility with respect… Read More

Coronavirus Testing & Treatment Covered by HDHPs

The IRS has issued Notice 2020-15, which allows high-deductible health plans (HDHPs) to cover testing and treatment for coronavirus (COVID-19) pre-deductible. This means coronavirus testing and treatment are considered a qualified medical expense under an HDHP, and people can use health savings account (HSA) funds to pay for it. Due to the national health emergency coronavirus presents, this notice applies even to HDHPs that would otherwise be disqualified under section 223(c)(2)(A) – in other words, HDHPs offered by a health plan that provides other health benefits covering coronavirus testing and treatment, and HDHPs with a deductible that falls below the minimum… Read More