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[Guidance Overview] JCT Overview of Section 512(a)(7): Unrelated Business Taxable Income Increased by Disallowed Fringe Benefits
21 pages. "The Subcommittee on Oversight of the House Committee on Ways and Means has scheduled a hearing for June 19, 2019, relating to section 512(a)(7), which generally requires a tax-exempt organization to increase its unrelated business taxable income by reason of providing certain transportation-related fringe benefits to its employees. This document ... provides an overview of this provision." (Joint Committee on Taxation [JCT], U.S. Congress)
Commuter Benefits: Where They've Been, Where They're Headed
"Always on the cutting edge, San Francisco, California, was one of the first cities to mandate that employers with 20 employees or more must offer commuter benefits. Berkeley and Richmond were soon to follow in the Golden State, as well as the rest of the Bay Area. In 2016, both Washington D.C., and the five boroughs of New York City mandated that employers with 20 or more workers must offer commuter benefits." (Connect Your Care)
[Opinion] The Proliferation of Voluntary Products
"College guidance, meditation / mental health, financial wellness, college debt repayment, fitness studio networks, claims advocacy, eldercare assistance, infertility services, and on and on. The number of voluntary products that are now available is overwhelming. And there is a flood of venture capital money fueling the growth of this sector." (Frenkel Benefits)
[Guidance Overview] Recommended Practices for Employer-Provided Meals and Snacks in Light of Recent IRS Guidance
"The IRS continues to aggressively audit how free meals and snacks offered to employees in many workplaces are treated for federal tax purposes.... Technical Advice Memorandum 201903017 ... is essentially the first guidance on employer-provided meals and snacks that the IRS has published in nearly two decades.... Employers with free or subsidized food and snack programs should consider implementing various design, operational, and recordkeeping policies and practices that align with current IRS views, as set out in the TAM[.]" (Morgan Lewis)
Why Is Active Open Enrollment Becoming the Popular Choice?
"Some employers have adopted a hybrid active-passive enrollment approach, which can provide the best of both worlds -- higher visibility into the benefits being offered while still giving employees the ease of defaulting to the previous year's benefits. The hybrid approach also helps avoid the conflict many benefit teams face with active enrollments when employees 'forget' to elect their benefits and lose their coverage." (Benefitfocus)
Forfeiture of Transportation Benefits
"In Information Letter 2019-002, the IRS has confirmed that unused transportation benefits will be forfeited when an employee terminates employment.... [E]mployees are permitted to change their transportation benefit contribution elections every month, and do not require a 'status change' event to make the change, so the amounts forfeited in transportation benefit elections should be substantially smaller than the potential loss in FSAs, where employees are generally required to make annual elections." (The Wagner Law Group)
College Grads See Health Insurance as Best Employee Benefit
"About 54 percent of new grads said medical coverage is the top workplace benefit when it comes to looking for a job ... The respondents said paid time off was the second benefit they most desired, followed by student loan forgiveness ... Another 38 percent of young job seekers said working remotely was a work perk they looked for." (Fox Business)
Total U.S. Voluntary Market Grows 3% in 2018
"New annualized premium for voluntary insurance products totaled $7.2 billion in 2018, a 3% increase from 2017 sales results ... In the fourth quarter 2018, new voluntary life insurance premium jumped 8%, compared with prior year. For the year, voluntary life insurance products rose 3%, with substantial increases in accidental death & dismemberment and whole life product sales offsetting declines in voluntary term, UL and VUL sales." (LIMRA)
Elder Care Benefits: A Growing Need for the U.S. Workforce
"Many employers currently offer an employee assistance program (EAP) which provides employees and household members with educational and referral services for elder care.... Dependent Care Assistance Plans (DCAP) ... allow employees to set aside tax-free dollars for qualified elder care.... Backup elder care benefits ... can also be incredibly useful to employees.... New vendors are also entering the marketplace[.]" (Voya)
[Guidance Overview] New Jersey Employees to Be Entitled to Pre-Tax Transportation Fringe Benefits
"While New Jersey is the first state to pass legislation aimed at protecting this benefit for employees, some municipalities, including New York City, previously have enacted similar laws. The Act will require that transit benefit elections be permitted 'at the maximum benefit levels' allowable under federal law. For 2019, such maximum benefit is $265 per month, up from $260 per month in 2018." (Proskauer)
Voluntary Benefits: Satisfying the Safe Harbor to Ensure Exemption from ERISA
"[T]he employer offered disability insurance in such a way that the employees were not clear it was a third party offering. Instead, there was evidence that the employer endorsed the program by stating that the program was offered by an industry leader and further, that the program had been chosen by the business to provide disability insurance. The court found that, because of the endorsement by the company and the fact that a reasonable employee would believe the program was being offered by the business and not a third party, [the program] fell under the protections of ERISA." [McCann v. Unum Provident, No. 16-2014 (3d Cir. Oct. 5, 2018)] (Hall Benefits Law)
How Employers Are Tackling Student Loan Debt
16 pages. "Nearly a third (32.4 percent) of [responding] employers ... reported offering or planning to offer some student loan debt program ... These 'Student Loan Debt Focused Employers' were more likely than the typical survey respondent (the full sample of all 250 that responded) to have taken steps to measure the financial wellness needs of employees, including examining existing employee benefit data ... surveying employees ... holding focus groups ... and analyzing other quantitative employee data ... Student Loan Debt Focused Employers cited complexity of the programs as their number one challenge in offering financial wellness benefits in the workplace -- nearly half gave this reason." (Employee Benefit Research Institute [EBRI])
New Jersey Requires Employers to Offer Employees Pre-tax Commuter Benefits
"The state's new commuter benefits law requires employers that employ at least 20 persons to offer a pre-tax transportation fringe benefit to all of the employer's employees that are not subject to a collective bargaining agreement.... A pre-tax transportation fringe benefit is a benefit that allows an employee to set aside wages on a pre-tax basis, which is then only made available to the employee for the purchase of certain eligible transportation services, including transit passes and commuter highway vehicle travel." (Jackson Lewis P.C.)
Employers Widen View of Inclusion and Diversity to Include Workplace Culture and Benefit Programs
"Leave of absence programs will continue to be a starting point to reinforce inclusion and diversity through benefits. In fact, three-quarters (75%) of respondents have either taken actions on their leave of absence programs or plan to this year or next, giving more employees opportunity to balance their unique work/life situation.... Employers ranked their top inclusion and diversity priorities over the next three years as financial planning, e.g., health, emergency savings, retirement (37%); core medical and/or pharmacy benefits (30%); maternity & family planning/infertility benefits (27%); and mental health and substance abuse treatment (27%)." (Willis Towers Watson)
Innovative Health Offerings: 24 Considerations for Your Plan
"Coverage for autism treatments and bariatric surgery, transgender-inclusive benefits and fertility benefits are among the nontraditional health benefits organizations are adding ... By offering innovative benefits, organizations are seeking to stand out among competitors in their recruitment and retention efforts. The growth of the gig economy is also forcing them to revisit the concepts of worker and workplace. And the presence of four generations in the workforce has highlighted a need for flexibility in benefits." (International Foundation of Employee Benefit Plans [IFEBP])
Tax Treatment of Welfare Benefits for Employees and Beneficiaries (PDF)
7 pages; ABA EBC 2019 Midwinter Meeting Report. Outline of tax consequences for employees of various welfare benefits, including recent statutory and regulatory developments for transportation fringe benefits, and reporting of health care benefits. (Employee Benefits Committee [EBC], American Bar Association)
[Guidance Overview] New Jersey Requires Transit Benefit Offering
"New Jersey commuters will be able to use pre-tax dollars to pay for transit fees thanks to a bill Gov. Phil Murphy signed into law on March 1.... Great news for individuals as they will receive tax savings from this pre-tax benefit. Not so great news for New Jersey nonprofits due to a law change in the Tax Cuts and Jobs Acts.... New Jersey nonprofits could see a 21% corporate tax rate applied to this fringe benefit offering." (WithumSmith+Brown, PC)
[Guidance Overview] New Jersey Becomes First State to Require Employers to Offer Pre-Tax Transportation Fringe Benefits
"[E]very employer subject to New Jersey's unemployment compensation law that employs at least 20 employees is required to offer Transit Benefits to all employees who are not currently covered by a collective bargaining agreement.... The Law also requires that the Transit Benefits be provided 'at the maximum benefit levels' allowable under federal law, to be deducted for those programs from an employee's gross income pursuant to Section 132(f)(2) of the Code.... The Law became effective immediately upon signature on March 1, 2019, but states that it is 'inoperative' ... until the earlier of March 1, 2020, or the effective date of implementing rules and regulations[.]" (Epstein Becker Green)
[Guidance Overview] New Tax Law Takes Bite Out of Employer Deductions for Transportation Fringe Benefits
"Employers can no longer deduct payments for qualified transportation fringes unless they are provided for the safety of an employee. The loss of the deductions also impacts not-for-profit employers by creating unrelated business taxable income.... The TCJA now requires the employer to forfeit the salary deduction for the amount that the employees elect to exclude on a pre-tax basis." (EisnerAmper)
Modernizing Benefits for Multinational Companies
"Companies need to consider the numerous countries in which they operate; the need to coordinate stakeholders across multiple functions and geographies; variations in social benefits and local regulatory frameworks; and responding to rapidly evolving technology, employee expectations and dynamics.... [T]he quest for modernization is important if companies want to attract, retain and engage the talent necessary for their business success in an increasingly complex and global world.... [A] systematic approach is critical." (Willis Towers Watson)
Seventh Circuit Holds the Parsonage Allowance Constitutional
"The Seventh Circuit's decision applied two tests: [1] the 'three-prong test' ... which requires that a statute have 'a secular legislative purpose,' not have the 'primary effect' of advancing or inhibiting religion, and 'not foster an excessive government entanglement with religion;' and [2] the 'historical significance' test ... which looks to 'historical practices and understandings.' The Seventh Circuit concluded both tests were satisfied." [Gaylor v. Mnuchin, Nos. 18-1277, 18-1280 (7th Cir. Mar. 15, 2019)] (Groom Law Group)
[Guidance Overview] Transportation Fringe Benefits: March 31 Deadline Approaching
"Until the regulations are issued, taxpayers who own or lease employee parking facilities may use any reasonable method to determine the amount of nondeductible parking expense and may rely on guidance provided in the Notice. However, for taxable years beginning on or after January 1, 2019, a method that fails to allocate expenses to reserved employee parking spots can't be a reasonable method. Taxpayers have until March 31, 2019, to modify existing parking arrangements for employees, which will be effective for the tax year beginning on or after January 1, 2018." (Moss Adams LLP)
[Guidance Overview] Tax Consequences of Reserved Employee Parking: Recharacterization Opportunity Expires Soon
"[Notice 2018-99] contains an important election until March 31 of this year for an employer to change the characterization of some or all employee parking spots from reserved exclusively for employees to not so reserved and to treat those spots as not reserved retroactively to January 1, 2018. This could save significant taxes for the 2018 tax year, but time is running out." (Murphy Austin)
Revised IRS Publication 521 Explains Limited Moving Expense Deduction and Exclusion for 2018
"[The Tax Cuts and Jobs Act] suspended the deduction and exclusion for an eight-year period beginning in 2018... [D]uring the suspension there is no tax reason for affected employers to limit moving expense reimbursements to moves that pass the time and distance tests and satisfy the start-of-work requirement. All employer reimbursements will be taxable whether or not those tests are met. This gives employers greater freedom to customize reimbursement policies, but some employers may decline the opportunity because the pre-2018 limitations serve as convenient boundaries[.]" (Thomson Reuters / EBIA)
[Guidance Overview] Nonprofits Seeking to Avoid New Parking Tax Must Make Changes Soon
"Even nonprofit employers obligated by state law or city ordinance to provide mass transit options to employees must pay tax on expenses for this type of employee perk.... These new rules will require tax returns from many exempt organizations that have never before filed with the IRS -- including organizations that do not engage in any actual unrelated trade or business activity and organizations, such as churches, that are exempt from filing information returns." (McGuireWoods)
IRS Offers Detailed Look Into Examinations of Employer-Provided Meals and Snacks
"[Technical Advice Memorandum 201903017] is valuable ... for its insight into the amount and types of information the IRS may require as substantiation that an employer policy exists, is enforced, and sufficiently relates to the provision of meals to support an income exclusion. The TAM's lengthy (and heavily redacted) analysis of the employer's claim that meals were furnished so employees could be available to handle emergencies shows the difficulty in proving just how many meals are excludable." (Thomson Reuters / EBIA)
IRS Attempts to Tighten Rules for Business Meal Exclusions
"An employer who is claiming exclusion from income and wages for meals furnished to employees for the convenience of the employer must provide substantiation if requested concerning the business reasons.... [IRS Technical Advice Memorandum 201903017] underlines how difficult it can be to prove to the IRS administratively a substantial non-compensatory business reason and provides guidance for employers looking to claim the exclusion." (Holland & Hart LLP)
[Guidance Overview] There's No Such Thing as a Free Lunch ... But There Might Be Free Snacks
"[T]he employer-taxpayer ... did not include the value of employer-provided meals and snacks in its employees' income, nor did it withhold and pay the related amount of employment taxes. To support its practice, the employer argued that it had a number of substantial noncompensatory business reasons for providing the free meals ... The IRS rejected 6 of the 7 proposed reasons ... In addition, the IRS argued that the availability of meal-delivery services was a mitigating factor in determining whether employees could secure a meal within a reasonable meal period." (Benefits BCLP)
The Perks and Pitfalls of Unlimited Paid Time Off
"Employers are obligated to adjust certain production and performance expectations when employees take protected leave under, for example, the Family and Medical Leave Act ... Employers may think putting time off into the proper 'bucket' no longer matters if you have an unlimited leave policy, but it does[.]" (HR Dive)
[Guidance Overview] The IRS Says 'Let Them Eat Snacks'
"Technical Advice Memorandum No. 201903017 ... continues the IRS' narrow position on an employer's ability to offer its employees free meals under Code section 119 without triggering imputed income equal to the value of the meals. The IRS' position is especially significant now that, due to tax reform changes, an employer is allowed a 50% deduction for meals that qualify under Code section 119 through the end of year 2025 (while some other employee meals no longer are deductible at all)." (Groom Law Group)
[Guidance Overview] New IRS Technical Advice Memorandum Says 'No Free Lunch' In Some Cases
"The IRS found that the employer had no policies for any employee positions related to the discussion of confidential business information, demonstrated no link between its desire for innovation and collaboration and the furnishing of meals, no factual support regarding safety-related policies or issues, and no policies related to employee health that would have required employer-provided meals. The IRS clarified that general goals and objectives of improving employee health do not qualify as a substantial noncompensatory reason for furnishing meals." (Dickinson Wright PLLC)
[Official Guidance] Text of IRS TAM 201903017: Exclusion from Taxable Income of Value of Meals and Snacks Provided to Employees (PDF)
50 pages. "With the exception of meals provided so that certain employees are available to respond to emergencies, Taxpayer has not demonstrated that its belief that its reasons for furnishing meals to its employees qualified such meals for the exclusion from income under section 119 was an objectively reasonable belief based on an understanding of the law, IRS guidance related to section 119, and application of section 119 in case law. The snack areas and employee desks used for consuming meals ... do not qualify as an eating facility as defined in Section 1.132-7, and therefore fair market value must be used in determining the amount to include for meals furnished to employees by Taxpayer[.]" [Dated Sept. 14, 2018; published online Feb. 15, 2019.] (Internal Revenue Service [IRS])
Consider How Relevance Can Improve Your Financial Wellness Program
"The good news is that the risks financial stress pose are increasingly being addressed through widespread implementation of financial wellness programs. The bad news, though, is that participation rates are disappointing. And employers are struggling to find effective ways to accurately measure their value." (HR Daily Advisor)
Qualified Transportation Fringe Benefits are No Longer Deductible
"Prior to 1/1/2018 the ... employee would exclude these benefits from their total taxable wages, while the employer would receive a tax deduction ... Under the TCJA, qualified transportation fringe benefits are still excluded from an employee's taxable wages; however, no deduction is allowed to employers for qualified transportation fringe expenses incurred or paid after December 31, 2017." (WithumSmith+Brown, PC)
Evaluating Employee Benefits Open Enrollment
"[1] Could I easily add a variety of voluntary benefit options in addition to core health plans? ... [2] Was creating a benefit communication strategy easy with available tools and resources? ... [3] Was I able to accurately measure enrollment engagement metrics? ... [4] Was it easy to get accurate enrollment information to my carriers and vendors?" (Benefitfocus)
How Employers Can Use Employee Benefits to Address Climate Change
"[HR] professionals will need to make the case for modifications to employee benefit packages that promote environmentally conscious behavior on the part of employees.... Recruiting and retaining millennials, for whom the environment is a high priority, provides another important rationale for enhancing the employee benefit package in this manner." (Thompson Coburn)
[Guidance Overview] New Parking Expense Rules for Taxable Employers and Tax-Exempt Organizations
"Employers should first calculate the 'total parking expenses' (not the fair market value of parking) and the total number of parking spots it provides. [Four] steps allow the employer to classify each parking spot, and its allocated parking expense, as tax deductible or non-deductible (or included in UBTI). [1] Calculate reserved spots for employees ... [2] Determine primary use of remaining spots aka 'The Primary Use Test' ... [3] Calculate allowance for reserved nonemployee spots ... [4] Determine use for remaining spots and allocate expenses." (Williams Mullen)
[Guidance Overview] Tax Cuts and Jobs Act: A Comparison for Businesses
"The Tax Cuts and Jobs Act (TCJA) changed deductions, depreciation, expensing, tax credits and other tax items that affect businesses. This side-by-side comparison can help businesses understand the changes and plan accordingly." (Internal Revenue Service [IRS])
[Guidance Overview] Updated Guidance on Determining Nondeductible Amount of Parking Fringe Expenses and Unrelated Business Taxable Income
"The method of determining the nondeductible amount depends on whether the taxpayer pays a third party to provide parking for its employees or the taxpayer owns or leases a parking facility where its employees park ... Notice 2018-99 provides a four-step methodology for determining these expenses that is deemed to be a reasonable method[.]" (EisnerAmper)
[Guidance Overview] Transportation Fringe Benefits for Not-for-Profits
"The normal additions to tax for underpayment of estimated tax won't be assessed if an underpayment results from the changes to the tax treatment of [qualified transportation fringe benefits (QTFs)].... Employers have until March 31, 2019, to change parking arrangements and reduce or eliminate the number of parking spots reserved for employees. The change can retroactively apply to past dates, dating back to January 1, 2018." (Moss Adams LLP)
Paid Time Off Plans: IRS Guidelines and Why They Matter
"The IRS appears to generally require that the earned time being paid out be substantially less than the accrued earned time owed to the employee. This is to ensure that the earned time program remains a bona fide sick or vacation pay plan and not a plan of deferred compensation. This particular requirement can get tricky and may be different in each employer's case." (Berry Dunn)
2018 Year in Review: Plus What Lies Ahead in 2019 (PDF)
54 presentation slides. Topics include: [1] ACA Marches On During Appeals; [2] Appealing Employer Exchange Notices; [3] 2018 ACA Reporting Deadline Extended; [4]Insured Nondiscrimination Rules Indefinite Delay; [5] Association Health Plans; [6] Individual Policy and Excepted Benefit HRAs; [7] Tax Cuts and Jobs Act; [8] California Leave Law Updates; [9] San Francisco Ordinance Updates. (ABD Insurance & Financial Services)
[Guidance Overview] IRS Releases Guidance on Nonprofit Transportation Benefits and Parking Tax
"This new tax applies to amounts a tax-exempt organization paid or incurred for [qualified transportation fringes (QTFs)] after December 31, 2017.... What if my organization has less than $1,000 in UBTI and expenses for QTFs? ... We pay a third party for employee parking. How do we determine our parking UBTI? ... We own or lease a parking facility. How do we determine our parking UBTI? ... What does the IRS consider to be a 'reasonable method'? ... How can we reduce the burden of this tax? ... This tax is already in effect. What if we haven't been making estimated tax payments?" (Gray Plant Mooty)
Three Ways Employers Can Provide Student Loan Support
"Employers can support debt burden employees in three ways: [1] Provide information to employees about services and support available to negotiate or consolidate the debt; [2] Offer debt counseling for student loans through a retained service provider; [3] Provide employees with additional income toward their student loan payments through student loan support programs.... [P]roviding employees with additional income toward their student loan payments is currently taxable as income." (Hill, Chesson & Woody)
[Guidance Overview] Guidance on Parking Expenses as Qualified Transportation Fringe Benefits
"Notice 2018-99 requires employers to determine the total parking expenses it paid or incurred to provide the parking benefits. Specifically, the Notice provides that the deduction disallowed under Code Section 274(a)(4) involves the expense of providing parking benefits and not the value of the parking provided to employees." (The Wagner Law Group)
The Benefits Beyond Salary You Can -- and Should -- Negotiate for When You Get a New Job
"These eight options ... are not only common to ask for, but also commonly granted... [1] A higher salary ... [2] More vacation time ... [3] The ability to work remotely ... [4] Commuter subsidies ... [5] A flexible schedule ... [6] Health and wellness benefits ... [7] Work devices and related services ... [8] Professional development." (Bustle)
Should Employers Cover Bike-Share and Electric-Scooter Rentals?
"Providing a general transportation or parking stipend to all employees to use however they want would be more inclusive than providing a specific commuter benefit ... The potential employer liability changes dramatically when employees use bikes or scooters during work hours ... It may be better to have employees use a company bike to ensure coverage and control over maintenance and safety issues[.]" (Society for Human Resource Management [SHRM])
[Guidance Overview] IRS Guidance Addresses Tax Cost of Providing Parking to Employees, Even for Tax-Exempt Employers
"[Notice 2018-99] provides a special opportunity for organizations to retroactively reduce or eliminate the tax cost of employee-reserved spots for 2018. Employers have until March 31, 2019 to change their parking arrangements to decrease or eliminate the number of employee-reserved parking spots, which will be given retroactive recognition as of January 1, 2018." (Vorys)
Employee Benefits Trends to Watch in 2019
"Customization of employee benefits ... Location of service delivery ... Creative funding of health plans and their risk ... Digitization of benefits ... Student loan assistance ... Parental perks." (OneDigital Health and Benefits)
Post-TCJA Deduction Disallowance Rules for Meals: Possible 100% Deduction for Snacks Under Code Section 132
"Notice 2018-76 ... confirmed that food and beverages provided during an entertainment activity may qualify for a 50% deduction, even though the 'entertainment expenses' (apart from food and beverages) are 100% disallowed, under the TCJA's 100% disallowance for entertainment expenses (effective after 2017). However, the notice did not discuss on-premises food and beverages, nor did it address Section 132(e) de minimis fringe benefits." (Morgan Lewis)
[Guidance Overview] New Guidance on Tax Reform's Impact on Parking: A Summary for Tax-Exempt Employers
"[N]ew Code Section 512(a)(7) indicates that the cost of employer-provided parking must be added to the employer's unrelated business taxable income (UBTI). However, the Act doesn't address how to determine the amount of the cost of employer-provided parking, and this question had been unanswered ... until the IRS recently issued Notice 2018-99. In addition, Notice 2018-100 provides some relief from underpayment of estimated income tax with respect to UBTI resulting from employer-provided parking." (Baker Newman Noyes)
[Guidance Overview] New Guidance on Tax Reform's Impact on Parking: A Summary for Taxable Employers
"What is the cost of parking when the employer pays a third party for employee parking spots? ... What is the cost of parking provided to employees when employer owns or leases a parking facility? ... Step 1: Calculate the disallowance for reserved employee spots ... Step 2: Determine the primary use of the remaining spots ... Step 3: Calculate the allowance for reserved nonemployee spots ... Step 4: Determine the remaining use and allocate the expenses." (Baker Newman Noyes)
[Guidance Overview] New Guidance for Nonprofits and the Tax on Parking and Public Transit Benefits
"Section 512(a)(7) is intended to place tax-exempt organizations on par with taxable organizations for which such expenditures are now disallowed.... [E]xpenses for parking made available to and primarily used by the general public will not give rise to UBTI under section 512(a)(7) (and it's not too late to take down those 'employee parking only' signs, which can be deemed effective for all of 2018)." (Seyfarth Shaw LLP)
[Guidance Overview] New IRS Guidance Makes Employer-Provided Parking More Costly and Burdensome Than You Might Think
"[Employers should] consider eliminating most, if not all, reserved parking, including spots reserved by places of worship for church staff or even spots reserved for employees as a reward on a rotating basis, such as for the 'employee of the month.' Any changes should be made by March 31, 2019 to take advantage of the retroactive effect.... [E]mployers should consider whether adopting an exemption for reserved parking for employees with special parking needs, such as handicapped parking, is a reasonable position under the Notice." (McDermott Will & Emery)
Reminder: Report Moving Expense Reimbursements as Taxable Income
"Businesses that reimburse employee moving expenses should review their practices in response to changes to the Internal Revenue Code rules on qualified moving expenses.... To qualify for the transition rule, the payments or reimbursements must be for qualified expenses which would have been deductible by the employee if the employee had directly paid them before Jan. 1, 2018. The employee must not have deducted them in 2017." (Solutions Law Press)
[Guidance Overview] IRS Guidance on Parking Expenses for Qualified Transportation Fringes Provides Opportunities for Exempt Organizations
"[If] the employer pays a third party to allow employees to park in the third party's parking lot, and the employees pay for the parking using a pre-tax wage reduction option, the employer's UBTI is based upon the amount of employees' income exclusion. If the employer were to eliminate the pre-tax wage reduction program, the employer would also eliminate the parking expense disallowance and related UBTI. Another opportunity is the special rule enabling many employers who own or lease the parking facility to retroactively reduce the amount of disallowed parking expenses.... Perhaps the biggest opportunity involves the 'primary use test'." (Schneider Downs)
IRS Addresses Examination Issues Raised by Meals Provided for the Convenience of the Employer
"[IRS Chief Counsel Memorandum AM 2018-004] is a clear warning that the IRS will not accept claims of convenience to the employer without question. The CCA is also a roadmap ... For example, the IRS may try to deny the Code Section 119 meal exclusion if: [1] the employer does not have a policy relating to employer-provided meals; [2] the employer has a meal-related policy, but it does not require the employer to provide meals so employees can properly discharge their duties; [3] the employer's policy is not 'reasonably related' to the employer's business goals ... [4] the policy was not communicated to employees; or [5] the policy is not actually implemented or enforced." (Thomson Reuters / EBIA)
[Official Guidance] Text of IRS Notice 2019-02: Standard Mileage Rates for 2019 (PDF)
"The standard mileage rate for transportation or travel expenses is 58 cents per mile for all miles of business use ('business standard mileage rate').... The standard mileage rate is 14 cents per mile for use of an automobile in rendering gratuitous services to a charitable organization under Section 170.... The standard mileage rate is 20 cents per mile for use of an automobile: [1] for medical care described in Section 213; or [2] as part of a move for which the expenses are deductible under Section 217(g).... For automobiles a taxpayer uses for business purposes, the portion of the business standard mileage rate treated as depreciation is 24 cents per mile for 2015, 24 cents per mile for 2016, 25 cents per mile for 2017, 25 cents per mile for 2018, and 26 cents per mile for 2019." (Internal Revenue Service [IRS])
[Guidance Overview] IRS Provides Limited Clarification for Employee Parking Benefits Provided by Certain Tax-Exempt Employers
"Much of the discussion in Notice 2018-99 centers on situations where the employer pays expenses related to a [parking] lot it owns, pays for use of a parking places, or leases parking facilities from a third party. In each case, once the amount of the expense is determined, the Notice requires that organizations use a reasonable method for determining the expense (and thus, UBTI) attributable to qualified employee parking." (Quarles & Brady LLP)
[Guidance Overview] IRS Guidance Addresses Parking Fringe Expenses and UBTI, Provides Penalty Relief to Tax-Exempt Organizations
"A key part of this guidance is a special rule, enabling many employers to retroactively reduce the amount of their nondeductible parking expenses. Under this rule, employers will have until March 31, 2019, to change their parking arrangements to reduce or eliminate the number of parking spots they reserve for their employees. By making this change, many churches, schools, hospitals and other tax-exempt organizations may be able to reduce their associated UBTI." (Bryan Cave Leighton Paisner)
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