IRS Issues New Tables for 2018 Tax Withholding

compliance bulletin

Starting Feb. 15, 2018, employers must use new tables to determine how much income tax to withhold from their employees’ paychecks. The Internal Revenue Service (IRS) issued the required new tables, which reflect changes made by the Tax Cuts and Jobs Act, on Jan. 9, 2018. This Compliance Bulletin provides information about the new tables and the IRS’s plans to release additional guidance on income-tax withholding under the new tax law.

© 2018 Zywave, Inc. All rights reserved.

 

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FURNISHING DEADLINE DELAYED FOR 2017 ACA REPORTING

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On Dec. 22, 2017, the IRS issued Notice 2018-06, which extended the 2017 deadline for furnishing statements to individuals under Sections 6055 and 6056. Notice 2018-06 also extended good-faith relief from penalties for 2017 reporting. However, the notice does not extend the due date for filing forms with the IRS for 2017. This ACA Bulletin outlines the new due date and additional guidance in this notice.

© 2017 Zywave, Inc. All rights reserved.

 

 

IRS REVERSES POLICY ON CERTIFYING INDIVIDUAL MANDATE COMPLIANCE

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On Oct. 13, 2017, the IRS reversed a recent policy change on how it monitors compliance with the ACA’s individual mandate. For 2017 tax returns, the IRS will not accept electronic tax returns, and may suspend paper returns, that do not certify compliance with the individual mandate. This ACA Compliance Bulletin provides an overview of this change.

© 2017 Zywave, Inc. All rights reserved.

 

IRS CONFIRMS ACA MANDATE PENALTIES STILL EFFECTIVE

ACA compliance bulletin imageThe IRS Office of Chief Counsel has recently issued several information letters clarifying that the ACA’s individual and employer mandate penalties are still effective. These letters were issued in response to confusion over President Donald Trump’s executive order directing federal agencies to provide relief from the burdens of the ACA. This ACA Compliance Bulletin summarizes the IRS’ information letters.

© 2017 Zywave, Inc. All rights reserved.

IRS Addresses Taxation of Fixed Indemnity Benefits

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The Internal Revenue Service (IRS) has released an internal memorandum addressing the tax treatment of payments from fixed indemnity health coverage.

According to this guidance, if an employee is not taxed on the premiums for fixed indemnity health coverage (the premiums are paid by the employer or by employees on a pre-tax basis through a cafeteria plan), any payments from the coverage must be included in the employee’s gross income and wages. These same rules also apply to wellness programs that provide fixed indemnity benefits for engaging in wellness activities.

To learn more, read the full Compliance Bulletin: IRS Addresses Taxation of Fixed Indemnity Benefits

FINAL FORMS FOR ACA REPORTING RELEASED

ACA compliance bulletin imageThe IRS has released final 2016 forms and instructions for ACA reporting under Code Sections 6055 and 6056. This Final Forms for ACA Reporting Released ACA Compliance Bulletin provides an overview of the changes that were made.

HIGHLIGHTS
• Final forms and instructions for reporting under Sections 6055 and 6056 are available.
• Two new “Offer of Coverage” codes are included on Form 1095-C, to indicate conditional offers to spouses.
• Other minor changes were made from the 2015 forms and clarifications have been added to the instructions on certain topics.

© 2016 Zywave, Inc. All rights reserved.

ACA Reporting Update: AIR System Will Remain Up and Running after June 30th Deadline

BAN Legal AlertWhile the deadline to electronically file Affordable Care Act (ACA) information returns with the IRS passed on June 30, 2016, the ACA Information Returns (AIR) system used to electronically file those returns will remain up and running.

This 07-12-16 Legal Alert clarifies the time frames within which corrections must be made.

 

 

 

ACA’S AFFORDABILITY CONTRIBUTION PERCENTAGE INCREASED FOR 2017

ACA compliance bulletin imageOVERVIEW
On April 12, 2016, the Internal Revenue Service (IRS) issued Revenue Procedure 2016-24 to index the contribution percentages in 2017 for purposes of determining the affordability of an employer’s plan under the Affordable Care Act (ACA).

HIGHLIGHTS
For plan years beginning in 2017, the ACA’s affordability contribution percentages are adjusted to:
• 9.69 percent under the pay or play rules
• 9.69 percent under the premium tax credit eligibility rules
• 8.16 percent under an exemption from the individual mandate

To learn more: ACA Affordability Contribution Percentage Increased for 2017

© 2016 Zywave, Inc. All rights reserved.

Employer Marketplace Notices (Section 1411 Certification)

Ahead of the curve logoApplicable Large Employers (ALEs) (those with 50 or more full-time and full-time equivalent employees in a prior calendar year) who are subject to the Affordable Care Act (ACA) employer mandate may be assessed a nondeductible penalty if at least one full-time employee receives subsidized health coverage from an ACA Marketplace. Beginning in 2016, the Federal Marketplace (Healthcare.gov) will notify certain employers when an employee has enrolled in Marketplace coverage, and has qualified for and receives premium and/or cost-sharing assistance for at least one month.

The Marketplace has no way of knowing if any given employer is an ALE subject to the play-or-pay penalties. Consequently, all employers whose employees receive a subsidy should receive a notice, called a Section 1411 Certification, even if they are not subject to play-or-pay. Therefore, all employers should be mindful that these Marketplace notices may be coming, particularly if the employer has any indication that an employee has enrolled in Marketplace coverage.

To learn more about what an employer should do, read the full article: Employer Marketplace Notices -Section 1411 Certifications