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IRS Guidance on Taxation of Dependent Care Benefits

The Internal Revenue Service released Notice 2021-26 which clarifies the taxation of dependent care assistance benefits that were available in 2021 and 2022 due to either the carryover of unused benefits or the extended claims period. Under the various COVID-19 related relief provisions, dependent care assistance benefits that would have been available in 2020 or 2021 could be used in a later year. This Notice provides that these benefits will be excluded from an employee’s gross income when they are used in 2021 or 2022. In addition, these amounts will not be taken into account for determining the dollar limit on dependent care assistance benefits… Read More

DOL Releases Model Notices and Guidance for the COBRA Subsidy

April 7, 2021     Today, the IRS released the following:     COBRA Premium Assistance under the American Rescue Plan Act of 2021 FAQs General COBRA FAQs for Workers   Model Notices Model General Notice and COBRA Continuation Coverage Election Notice: MS Word | PDF Model Notice in Connection with Extended Election Period: MS Word | PDF Model Alternative Notice: MS Word | PDF Model Notice of Expiration of Premium Assistance: MS Word | PDF Summary of COBRA Premium Assistance Provisions under the American Rescue Plan Act of 2021: MS Word | PDF  

IRS Treats Face Masks, Hand Sanitizers, and Sanitizing Wipes as Qualified Medical Expenses

The IRS released Announcement 2021-7 that provides that amounts paid for personal protective equipment for the primary purpose of preventing the spread of COVID-19, such as masks, hand sanitizer and sanitizing wipes for use by the taxpayer, the taxpayer’s spouse, or the taxpayer’s dependent(s) are treated as amounts paid for medical care under § 213(d) of the Internal Revenue Code (Code). As such, these amounts can be reimbursed by a health flexible spending arrangement, a health reimbursement arrangement or a health savings account.

IRS Confirms HSA Contribution Due Date as May 17, 2021

Last week the IRS announced that the due date for 2020 tax returns was postponed to May 17, 2021. Today they announced in IR 2021-67 that the due date for 2020 contributions to an HSA is also May 17, 2021. 

DOL Releases EBSA Disaster Relief Notice 2021-01

DOL Releases EBSA Disaster Relief Notice 2021-01 February 26, 2021   On Friday, the Department of Labor released EBSA Disaster Relief Notice 2021-01, which provides guidance on the duration of the COVID-19-related relief provided by the Timeline Extension Rule. The past relief, provided in 2020, continues until sixty (60) days after the announced end of the COVID-19 National Emergency  or such other date announced by the relevant Agency or Agencies in a future notification (the “Outbreak Period”). This notice provides that under Section 518 of ERISA and Section 7508A(b) of the Code, the disregarded period for individual actions “required or permitted” is expressly limited… Read More