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Fringe benefits - transit, discounts, other


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Boosting Voluntary Benefits Enrollment Is a Win-Win
"Employers can get a huge return on demonstrating the value of voluntary benefit plans once their employees understand how the coverage works and the risks of not having it.... The key is to incorporate voluntary benefits into your existing communications strategy. Communication channels, like benefit websites, blogs, and other social media platforms, are your best bet when it comes to keeping employees informed." (Frenkel Benefits)
Can a Qualified Transportation Plan Reimburse Employees' Expenses for Carpooling with Their Own Vehicles?
"Because of the seating capacity and mileage-use requirements, most family vehicles used for carpooling cannot qualify as commuter highway vehicles and thus do not qualify for vanpooling benefits. Even if a family minivan or SUV satisfies the seating capacity requirement, a family vehicle generally cannot satisfy the 80% usage requirement." (Thomson Reuters / EBIA)
Employee Eldercare Assistance: Not a Bad Idea
"Employers are looking at providing long term care benefits again -- but often the costs are too high to be appealing to a large percentage of the workforce.... Products offering assistance in coordination of complex care needed for parents and grandparents have begun to be considered for rounding out an employee benefits package." (Frenkel Benefits)
Chief Human Resource Officers on Trends Shaping the Workplace, Outdated Policies Governing It, and the Way Forward (PDF)
86 pages. "[Recommendations] of the most senior HR executives working for America's largest employers on ... what can be done from a policy perspective to make the workplace work [include] ... [1] Increased portability of employee benefits that are not tied to tenure with a single employer.... [2] A tax-preferred system in the mold of a 401(k) that would help employees to save and pay off student loan debt sooner.... [3] Companies already providing generous paid leave benefits should have a federal safe harbor from being hampered by the varying requirements of state and local leave mandates.... [4] Protect the Tax Exemption of employer-sponsored health insurance (ESI).... [5] Federal legislation enabling employees to collect defined benefit plan retirement income earlier while permitting them to continue to work for their employer[.]" (HR Policy Association)
Increased Cost-Sharing Makes Voluntary Benefits More Attractive
"As national leaders debate ways to tackle health care troubles, employers may need to get creative in helping employees afford the health care they need. One way they can do that is by offering supplemental benefits.... When handled properly, voluntary benefits are not covered by ERISA ... The plan must be completely voluntary for the employees; premiums must come only from the employees -- no employer contributions allowed; the company must not endorse the plan; and any monies that come back to the employer because of the plan must be limited only to reasonable reimbursements arising from the collection and payment of premiums." (HRDailyAdvisor)
Cycling to Work Can Cut Cancer and Heart Disease
"[D]uring the course of the study, regular cycling cut the risk of death from any cause by 41%, the incidence of cancer by 45% and heart disease by 46%. The cyclists clocked an average of 30 miles per week, but the further they cycled the greater the health boon." (BBC News)
[Guidance Overview] Be Wary of Wellness Plan Designs Purporting to Avoid Income and Employment Taxes
"[IRS Chief Counsel Memo (CCM) 201622031] addresses the tax treatment of three different situations in which wellness benefits result in taxable income to employees.... [CCM 201703013] addresses the tax treatment of fixed indemnity cash payments paid by a wellness plan without regard to the amount of medical expenses incurred by the employee, where the employee is paying premiums to participate in the wellness program." (Jackson Lewis P.C.)
The Surprising Employer Benefit Millennials Really Want
"With the introduction of many flashy workplace benefits geared towards millennials such as trendy decor, student loan repayment assistance, onsite cafes, dog-friendly offices, relocation and travel privileges, improved leave policies, free snacks and more, it's surprising to know that ... 34% of millennials chose health care as the most important benefit their employer can offer. More and more millennials are seeking out companies that have an onsite health clinic." (Forbes)
The Pet-Friendly Workplace: Results of the PAWrometer Survey (PDF)
"[W]hen asked to choose between [benefits such as pet-related PTO, pet bereavement and pawternity leave] and allowing pets in the workplace, most employees said they would prefer other pet-related benefits (51 percent) over allowing pets in the workplace (39 percent).... Millennials are significantly more likely to find value in the positive impact pets at work have on employees (73 percent) and the workplace (70 percent).... [M]ore than one-third of HR decision makers (34 percent) say at least one potential employee has declined an offer due to concerns about pet allergies." (Banfield Pet Hospital)
What Benefits Can Companies Offer Gig Workers?
"[B]usinesses should take care when including gig workers in company activities or programs.... [T]he question of determining whether workers are independent contractors or employees [is] 'very fact-intensive,' meaning that even if your contract makes clear the gig worker is an independent contractor and not an employee, every perk you offer them could affect the relationship's balance." (Society for Human Resource Management [SHRM])
Is It Time to Refresh Your Voluntary Benefits?
"Employers can analyze the employee population by conducting an employee census, or other type of workforce evaluation to help determine the group make up. Retirement preparation may be important for the 'baby boomers', technological enhancements and remote access may be more of a priority for Millennials, and supplemental medical benefits more critical for Generation Xers -- all needs which can be incorporated into a voluntary benefits offering." (Strategic Benefit Services)
Design of Transit Benefits Can Increase Employee Engagement
"[M]andates and tax considerations should not be the only driver of transit benefit design. Asking employees what they need to better manage their commutes to work could yield some important insight into how to expand these programs to meet the needs of a broader array of employees.... 69 percent of employers offering employee transit benefit programs reduced their need for parking spaces. 53 percent reduced local traffic congestion. 59 percent improved community relations." (Society for Human Resource Management [SHRM])
[Guidance Overview] Transit Plan May Require Use of Debit Card Even If Cash Reimbursement Is Permissible
"[IRS Information Letter 2016-0085] reinforces a fundamental point about qualified transportation plan design, namely, that after assuring that the minimum requirements are met for favorable tax treatment, employers are free to impose additional restrictions.... [T]here are no tax nondiscrimination rules for qualified transportation plans, so employers do not need to consider, for example, whether the restrictions tend to favor more highly compensated employees." (Thomson Reuters / EBIA)
Why Student Loan Repayment May Soon Be a Standard Benefit
"The average tenure of Millennials is around 16 months, and the bulk of these workers are saddled with a tremendous amount of student loan debt ($30,000 on average). That revolving door mentality among younger workers hurts employers' retention rates and costs a fortune in extra recruiting and training costs. Plus, because student loan debt makes contributing to a 401(k) a low priority, employers' 401(k) participation rates suffer as well." (HR Benefits Alert)
IRS Issues 2016 Version of Publication 463 on Travel, Entertainment, Gift, and Car Expenses
"Publication 463 ... is especially detailed and useful in its handling of the deductions for business use of an employee's vehicle. Those deductions will not apply if the employee's expenses are reimbursed under an accountable plan, in which case the employer reimbursements are excluded from income and the vehicle expenses are not deductible by the employee." (Thomson Reuters / EBIA)
Lawmakers Interested in Student Loan Repayment as Employee Benefit
"The average debt per borrower has nearly doubled since 2004, increasing from roughly $18,000 to more than $35,000 for a 2015 graduate. As millennials become a larger share of the workforce, the student loan debt dilemma is attracting more attention from employers. Legislative proposals would allow employers to establish a variety of tax-preferred student loan repayment assistance programs." (Willis Towers Watson)
Use of PTO Plans Continues to Increase
"[E]mployers report that many employees do not use all of the days available to them: 44 percent report that their employees take less than 80 percent of their allotted PTO time. And for the growing number of employees who work remotely, time off may not truly be time away from work.... While for most employers, disability benefits are still the only official company-sponsored paid leave for new moms that are provided, 24 percent of employers provide paid parental leave for bonding to the birth parent. In addition, 25 percent of employers reported providing a paid parental leave benefit to the non-birth parent." (Wolters Kluwer Law & Business)
[Guidance Overview] Text of IRS Publication 15-B: Employer's Tax Guide to Fringe Benefits, for Use in 2017 (PDF)
32 pages; dated Dec. 16, 2016. "What's New: Cents-per-mile rule.... Qualified parking exclusion and commuter transportation benefit.... Contribution limit on a health flexible spending arrangement (FSA)." (Internal Revenue Service [IRS])
2017 Rates and Limits Guide
"This quick reference guide contains: [1] Summary of payroll tax limits; [2] Filing deadlines; [3] IRS standard mileage rates; [4] Summary of other limitations, including elective deferrals and benefits and contributions under qualified retirement plans; [5] ACA forms and deadlines." (Lindquist LLP)
[Official Guidance] Text of IRS Notice 2016-79: 2017 Standard Mileage Rates (PDF)
"This notice provides the optional 2017 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.... The standard mileage rate for transportation or travel expenses is 53.5 cents per mile for all miles of business use (business standard mileage rate) ... This notice is effective for [1] deductible transportation expenses paid or incurred on or after January 1, 2017, and [2] mileage allowances or reimbursements paid to an employee or to a charitable volunteer (a) on or after January 1, 2017, and (b) for transportation expenses the employee or charitable volunteer pays or incurs on or after January 1, 2017." (Internal Revenue Service [IRS])
Nearly Three-Quarters of U.S. Employees Would Like a Customized Benefits Package
"73 percent of U.S. employees across all age groups would like the ability to customize their workplace benefits to suit their individual needs.... Employees ranked health care coverage, retirement savings accounts and vacation as the three most popular workplace benefits ... Millennial workers favor education benefits and paid parental leave.... Generation X workers ranked financial planning/wellness programs higher than Millennials and Baby Boomers.... Baby Boomers ranked disability insurance significantly higher than Millennials and Gen Xers." (LIMRA)
IRS Releases 2016 Form 8839 for Excluding Employer-Provided Adoption Benefits
"Employer-provided adoption benefits may be excluded from an employee's gross income if they are furnished pursuant to an adoption assistance program that meets the Code's requirements. Benefits under a qualified adoption assistance program may be funded by the employer directly, by employees through salary reductions under a cafeteria plan, or by a combination of both. Employees may also claim a tax credit for qualified adoption expenses, although the credit and the exclusion may not both be claimed for the same expense." (Thomson Reuters / EBIA)
U.S. Election Results' Impact on Health Care Reform
"This article provides a brief overview of the election's implications for the benefits-related proposals President-elect Trump put forth during his campaign, including health care reform, paid maternity leave, child care benefits and tax reform." (Willis Towers Watson)
[Official Guidance] Text of IRS Notice 2016-69: Treatment of Amounts Paid to Section 170(c) Organizations Under Employer Leave-Based Donation Programs to Aid Victims of Hurricane Matthew (PDF)
"This notice provides guidance for income and employment tax purposes on the treatment of cash payments made by employers under leave-based donation programs for the relief of victims of Hurricane Matthew. The Service will not assert that cash payments an employer makes to Section 170(c) organizations in exchange for vacation, sick, or personal leave that its employees elect to forgo constitute gross income or wages of the employees if the payments are: [1] made to the Section 170(c) organizations for the relief of victims of Hurricane Matthew; and [2] paid to the Section 170(c) organizations before January 1, 2018." (Internal Revenue Service [IRS])
The Financial Un-Wellness of HR
"Are we contributing to the financial 'un-wellness' of employees by putting such a heavy focus on retirement planning? Furthermore, are HR executives the most fitting to help people with these areas of their financial lives? ... According to a recent study, 56% of employers indicated they are very likely to create or focus on the financial well-being of employees in ways that expand beyond retirement decisions in 2016.... Unfortunately, because one benefit (retirement savings) has historically been placed in the spotlight for HR leadership and team members, handling the ever growing emphasis on personal finance is challenging." (BenefitsNav)
Onsite Child Care Ebbs as Flexible Benefits Flow
"Traditional brick-and-mortar child care centers are expensive to operate, require a lot of staffers and represent a significant liability risk to the company should something happen to a child at the center. Above all, 'onsite brick-and-mortar child care centers with a finite number of slots and fluctuating demand are not easy to adapt' to changing needs ... Meeting the needs of diverse employees requires offering benefits that can be used as employees see fit to manage their family and work responsibilities." (Society for Human Resource Management [SHRM])
Beyond Health Care: Are These Extreme Perks the Future of Benefits?
"Following a well-received autism awareness event in 2013, JPMorgan Chase began offering autism benefits to its 160,000 U.S. workers.... Boxed CEO Chieh Huang recently took employer-sponsored benefits to previously uncharted territory when he announced the company would foot the bill for wedding expenses of all of his unmarried employees.... Beginning in January, Microsoft started matching 50% of workers' 401(k) contributions up to $9,000 per year." (HR Benefits Alert)
[Guidance Overview] Election 2016: A Reminder About New York's Voting Leave Law and Posting Requirements
"Employers ... should be mindful that New York law requires the posting of a notice at least 10 working days prior to 'every election.' ... New York law requires that every employer post this notice 'conspicuously in the place of work,' and it must remain in place until the close of the polls on November 8, 2016." (Ogletree Deakins)
[Guidance Overview] A New Primer on Voting Leave Requirements: Are You Ready for the Elections?
"[V]oter participation in [this year's] elections may be higher than expected. If so, employers may receive more requests for voting leave than they have in prior years. [This] overview of state voting leave laws will arm employers with a basic knowledge of voting leave rights and prepare them for a potential onslaught of leave requests[.]" (Ogletree Deakins)
[Guidance Overview] A New Primer on Voting Leave Requirements: Are You Ready for the Elections?
"[V]oter participation in [this year's] elections may be higher than expected. If so, employers may receive more requests for voting leave than they have in prior years. [This] overview of state voting leave laws will arm employers with a basic knowledge of voting leave rights and prepare them for a potential onslaught of leave requests[.]" (Ogletree Deakins)
Election Time and the Minnesota Voter Leave Law
"For many years, Minnesota law excused employees to go to the polls in the morning before they were to report to work or to leave early if necessary to arrive at the polls before they closed, but did not require that the employee be paid for the time spent voting. The current statute allows employees to be absent from work at any time on Election Day in order to cast their ballots, without a reduction in pay." (Ogletree Deakins)
When Can an Employee Take Leave to Vote?
"The majority of states give employees the right to take time off from work to vote or to serve as an election worker. Many states also require that an employer offer paid leave for the time needed to vote. Moreover, some states require that an employer allow an employee to take the entire day off if the employee intends to volunteer to help administer the election." (Littler)
Employer-Provided Quality-of-Life Benefits, March 2016
"In March 2016, 54 percent of civilian workers had access to employee assistance programs. In that same period, 41 percent of workers had access to wellness programs, followed by childcare (11 percent), subsidized commuting (7 percent), and flexible workplace (6 percent)." (U.S. Bureau of Labor Statistics [BLS])
[Guidance Overview] San Francisco Bay Area Commuter Benefits Program Made Permanent (PDF)
"On September 22, Governor Jerry Brown signed into law a bill that continues a regional pilot program aimed at encouraging employees in the Bay Area to use commute alternatives to driving alone on a permanent basis. The program ... requires employers with 50 or more employees in the Bay Area to offer certain commuter benefits to their employees." (Xerox HR Services)
[Official Guidance] Text of IRS Notice 2016-58: Special Per Diem Rates 2016-2017 (PDF)
"This annual notice provides the 2016-2017 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home, specifically [1] the special transportation industry meal and incidental expenses (M&IE) rates, [2] the rate for t he incidental expenses only deduction, and [3] the rates and list of high- cost localities for purposes of the high- low substantiation method." (Internal Revenue Service [IRS])
D.C.-Area Federal Employees One Step Closer to Having Uber Covered Under Transit Benefits
"A House oversight panel .. advanced legislation that would allow federal employees in the capital region to apply their transit benefits toward ride-sharing services such as Uber. The bill ... would require agencies to offer employees using ride-sharing networks the same transit benefits as those using public transportation. It was prompted by the Washington Metrorail's SafeTrack program of extensive systemwide repairs and upgrades." (Government Executive)
[Guidance Overview] NYC Amends Mass Transit Benefit Rules (PDF)
"Starting in 2016, NYC law requires businesses to offer pretax commuter benefits to their 'full-time' employees who work in the city. The NYC Department of Consumer Affairs recently amended its rules to clarify recordkeeping requirements, enforcement provisions, and penalties effective September 7." (Xerox HR Services)
[Guidance Overview] IRS Letter Addresses Readily Available Test When Bus Company Does Not Accept Debit Cards
"If an employer cannot offer cash reimbursements for a particular transit provider, and more convenient vouchers like debit cards cannot be used, the employer may need to make a difficult decision: deal with the practical challenges of distributing the available vouchers for that provider, or refuse to pay benefits for that provider because the administrative burdens of dealing with the available vouchers outweigh the value of the transit benefit." (Thomson Reuters / EBIA)
Overtime Pay Changes Will Affect Employee Benefits, Too
"For self-funded health plans subject to Section 105(h) nondiscrimination rules, it's particularly difficult to alter eligibility terms between hourly and salaried employees ... Higher overtime costs could make it more likely that dental, vision and disability coverage are turned into employee-paid voluntary benefits." (Society for Human Resource Management [SHRM])
[Guidance Overview] ERISA Spring Cleaning: Have You Properly Identified All of Your ERISA Benefits?
"What are the general types of plans subject to ERISA? ... Are certain types of plans totally exempt from ERISA? ... What are some of the more common benefit arrangements that are potentially subject to ERISA's Form 5500 annual reporting requirement? ... What should be done once the benefits subject to ERISA have been identified? ... If a required Form 5500 has not been filed for an ERISA benefit, what should be done?" (Bond, Schoeneck & King)
IRS Explains That Usual Restrictions on Cash Reimbursement of Transit Expenses Apply to Retroactive Payments
"[IRS TAM-2016-1] clearly rejects the notion that Congress loosened any other aspect of the transit reimbursement rules when it retroactively restored transit parity. Those other rules -- including the readily available test, the substantiation requirements that apply to bona fide reimbursement arrangements, and the dollar limits on reimbursable expenses and compensation reductions -- will effectively preclude many employers from making retroactive cash reimbursements." (Thomson Reuters / EBIA)
[Guidance Overview] IRS Limits Retroactive Cash Reimbursements for Transit Benefits
" 'If transit passes are readily available in the employer's area, the Code doesn't provide an income or employment tax exclusion for transit benefits paid to employees in cash,' the IRS said in [a Chief Counsel memorandum]. On the other hand, if transit passes aren't readily available and employers provide transit benefits in the form of cash reimbursements, employers must have a bona fide reimbursement arrangement under which employees must actually incur and substantiate the expenses[.]" (Bloomberg BNA)
Workplace and Public Accommodations for Nursing Mothers
"This brief provides an overview of the various federal and state laws concerning workplace and public accommodations for nursing mothers in the United States and identifies the gaps that persist between public health goals and reality for breastfeeding women in this country." (Health Affairs)
[Guidance Overview] IRS Information Letter Affirms Application of 80/50 Rule to Certain Vanpools
"A previous IRS information letter described the three types of vanpools that may be qualified transportation benefits -- employer-operated, employee-operated, and private or public transit-operated vanpools -- and explained that only employer-operated and employee-operated vanpools must satisfy the 80/50 rule ... [IRS Information Letter 2015-0041] considers these rules in response to an employee's complaint that his employer is imposing the 80/50 requirement on his vanpool even though the vanpool is privately owned." (Thomson Reuters / EBIA)
When is a Voluntary Plan Truly a Voluntary Benefit Plan?
"Voluntary benefits have been available for decades, but the whirlwind of changes in how health insurance is purchased and delivered since the implementation of the [ACA] has forced employers and employees to seek solutions to address increasing gaps in traditional health insurance plans that have created larger out-of-pocket costs. Increasingly, voluntary benefits are evolving into a meaningful option that more employers are offering to employees. Many plan sponsors might be surprised to learn that their 'voluntary plans' are not truly voluntary under [ERISA], and that, consequently, the sponsors have not met their ERISA compliance obligations." (Ascende)
More Pre-Tax Dollars -- Are You Offering Commuter Benefits Yet?
"Depending on the type of plan implemented, employees can access their accumulated funds via a debit card or can order their commuting pass and have it delivered directly to their home. Either way, it's another way to help employees increase their spendable income -- more money in their pockets instead of Uncle Sam's." (Frenkel Benefits)
Employee Meals with a Side of Tax
"For technology giants located in the heart of Silicon Valley, it has become standard practice to shower their employees with handsome perks such as on-site gyms and a seemingly unlimited supply of lavish meals.... Because the incentives are symbiotic, encouraging the employees to work longer hours and collaborate in a more casual work setting, while simultaneously providing employees with free, gourmet meals, the Section 119 applicability becomes muddied ... The IRS has added Section 119 to the 2015-2016 Priority Guidance Plan, with the intent to dissect the Code Section further and determine if changes are necessary." (Schneider Downs)
[Guidance Overview] Pension and Health Plans: 2015 Year End Review (PDF)
Topics include: [1] The 'Cadillac Tax'; [2] Delayed ACA reporting; [3] Legal challenges to the ACA; [4] Repeal of automatic enrollment; [5] Expanded preventive care services; [6] Substantial hospital inpatient services and minimum value; [7] Pace Act; [8] ACA fees and penalties; [9] Nondiscrimination for fully insured health plans; [10] IRS determination letter program; [11] Form 5500 filing deadlines remain the same; and [12] NYC Commuter Benefits Law. (Schulte Roth & Zabel LLP)
'Panda Days' and Paid Time Off: What Perks Perk Up Employees
"Perks are essential in attracting and retaining talent, and companies are offering more and more varied perks to hire the very best they can. Nearly 3 in 5 (57%) job seekers reported benefits and perks being among their top considerations before accepting a job ... The perks vary widely, but common themes emerge among the most popular benefits, namely parenting, lifestyle, education or skill building, and cash perks." (OneExchange from Towers Watson)
[Official Guidance] Text of Rev. Proc. 2016-14: Inflation-Adjusted Amounts Resulting from the Enactment of the Protecting Americans from Tax Hikes (PATH) Act of 2015 (PDF)
"For taxable years beginning in 2016, the monthly limitation under Section 132(f)(2)(A) regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass is $255." (Internal Revenue Service [IRS])
Puerto Rico Supreme Court Addresses Conditions for Breastfeeding in the Workplace
"On January 25, 2016, the Supreme Court of Puerto Rico held that employers in Puerto Rico should provide a safe, private, and hygienic place for working nursing mothers to extract breast milk during the nursing period as provided under Act No. 427-2000, as amended (Act 427). The Supreme Court further held that, given certain conditions, failure by an employer to provide a safe, private, and hygienic place to extract breast milk may be a constitutional violation of the working mother's right to privacy under the Constitution of Puerto Rico if the working mother's decision to breastfeed her child is affected by the employer's violation of Act 427." (Littler)
[Guidance Overview] IRS Issues Procedures for Implementing Retroactive Transit Benefit Parity
"[N]ot all sponsors of pretax transit benefit programs are required to make corrections. Many employer-provided transit benefit programs provided a maximum monthly tax-free amount of transit-related expenses of $130 -- the amount imposed by the IRS prior to the passage of the PATH Act. No correction is necessary (or permissible) for programs with such a limit." (Lockton)
[Guidance Overview] Form W-2 and 941 Actions May Be Required Immediately for Retroactive Increase in Section 132 Transit Benefits
"To reduce filing and reporting burdens, [Notice 2016-06] clarifies how the increase applies for 2015 and provides a special administrative procedure for employers to use in filing [1] the 2015 fourth quarter Form 941 to reflect changes in the excludable amount for transit benefits provided in all quarters of 2015, and [2] 2015 W-2 wage and tax statement forms. These guidelines are similar to past guidelines addressing retroactive increases in transit benefits." (McDermott Will & Emery)
Identity Theft Protection: Don't Worry About Taxability
"In contrast to earlier guidance, the IRS won't assert the taxability of identity theft protection even if the employer provides it before any data breach occurs.... Many states follow the IRS's lead in determining taxable income for state income tax purposes. But that doesn't mean a state can't take a contrary position ... Identity theft protection is not a 'qualified benefit' for purposes of cafeteria plans under section 125 of the federal tax code, so employees cannot purchase this protection on a pretax basis." (Lockton)
[Guidance Overview] A Permanent 'Path' to Maximize Tax Savings: New Legislation Retroactively Increases the Exclusion for Mass Transit Benefits
"Although the PATH Act provides tax relief for mass transit benefits previously elected in 2015, it does not allow employees to make retroactive transit benefit elections for 2015. Rather, it changes the tax treatment of the 2015 salary reductions and disbursements that actually occurred in 2015.... For some employees who commute using mass transit, the changes implemented by the PATH Act potentially mean hundreds of dollars in income tax and [FICA] tax savings and refunds for 2015. For employers, this may also include significant FICA tax savings for last year." (Morgan Lewis)
[Guidance Overview] IRS Provides Guidance on Tax Reporting for Retroactive Increase in 2015 Qualified Transportation Benefits
"Employers who operated their qualified transportation plans on the assumption that transit parity would be restored retroactively have once again been rewarded. Those who treated excess transit benefits as income and wages for 2015 must now move quickly, especially if they have not yet filed Form 941 and want to take advantage of the special administrative procedure." (Thomson Reuters / EBIA)
[Guidance Overview] Congress Grants Retroactive Transit Parity, IRS Issues Payroll Guidance
"As it may take some time to complete and provide the corrected forms, the employer should consider notifying affected employees immediately that corrected forms will have to be issued, as some employees may have already started preparation of their 2015 individual income tax returns upon receiving their W-2s. This marks the third time since 2013 that Congress has granted retroactive transit parity and therefore the third time that the IRS has had to issue payroll guidance as to the retroactivity. Because this time Congress has made parity permanent, after years of lobbying from mass-transit advocates, payroll managers will thankfully not have to deal with retroactivity issues in future years." (McGuireWoods LLP)
[Guidance Overview] Retroactive Changes to Transportation Benefits May Impact Taxable Wages for 2015
"The Act does not mandate that employers provide additional transit benefits to their employees for 2015 and employees cannot retroactively increase their compensation elections.... [If] an employer offered its employees transit benefit that exceeded the previous excludable limits, then it may need to evaluate if it needs to reduce includable wages for 2015." (Graydon Head & Ritchey LLP)
[Guidance Overview] How Employers Should Handle Retroactive Reinstatement of Transit Benefits Parity
"Employers may correct only the employer share of FICA tax that corresponds to the employees' share of FICA tax that has been repaid or reimbursed to the employees. Employers using this special procedure do not need to obtain written statements from each employee confirming that the employee did not make a claim ... and will not make a claim for refund of FICA tax overcollected in a prior year, which is usually required when employers refund FICA tax to employees." (Journal of Accountancy)
[Guidance Overview] IRS Addresses 2015 Increase in Transportation Benefits
"Normally, an employer that reports excess transit benefits as includible in gross income and wages, and withholds income and FICA taxes, must make corrections by filing Form 941-X for each quarter in which the error occurred. However, Notice 2016-6 provides a special administrative procedure that employers may use if they: [1] Treated excess transit benefits as wages in 2015. [2] Have not yet filed Form 941 for the fourth quarter of 2015. [3] Repay or reimburse employees for any overcollected FICA tax for all four quarters of 2015 on or before filing the fourth quarter Form 941." (Practical Law Company)

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