News Archive

20 pages. "What's New: Trump account and new Form 4547.... If the child was born after 2024 and before 2029 and meets certain other requirements, the authorized individual may also elect to receive a $1,000 pilot program contribution to the child's Trump account. Both elections can be made on Form 4547, which can be filed at the same time as the authorized individual's 2025 income tax return."  MORE >>

"Plan sponsors should be collaborating with their payroll vendors and recordkeepers to understand how mandatory Roth catch-up contributions will be processed for high wage earners ... [If] at least one applicable retirement plan within a controlled group permits super catch-up contributions, all controlled group retirement plans must also permit super catch-up contributions.... By February 16, 2026, each HIPAA covered entity and business associate must update its Notice of Privacy Practices (NPP) ... Some section 409A corrections under Notice 2008-113 must be completed by year-end, making now the ideal time to identify and finalize correction of any lingering errors."  MORE >>

"While the increase sounds positive for employees, it can create challenges with nondiscrimination testing ... When the limit jumps to $7,500, HCEs are more likely to contribute the maximum, which can skew the ratio and increase the risk of failing the test. If you have had problems passing this test in the past, you will likely continue to have problems and potentially experience an even greater difference in the ratio."  MORE >>

"One approach is to offer the DCAP benefit only to non-HCEs.... Providing employer contributions to DCAPs can significantly boost participation among non-HCEs.... Reducing or eliminating minimum contribution requirements makes the plan more accessible to lower-paid employees who may have budget constraints.... Many employees who could benefit from a DCAP do not participate simply because they do not understand the program or its value."  MORE >>

"As we approach 2026, employers sponsoring cafeteria plans may take advantage of several important developments that permit optional changes to plan design and administration.... [1] Dependent Care FSA limit increase.... [2] Potential introduction of Trump Accounts.... [3] Health FSA and carryover limit adjustments.... [4] Nondiscrimination testing considerations."  MORE >>

"The One Big Beautiful Bill Act allows employers to raise the dependent care FSA exclusion limit starting Jan. 1, 2026. This is the first time since 1986 and offers meaningful additional tax savings for employees. Employers must amend plan documents to implement the higher limit. Without a formal update, plans will not be able to offer the increased contribution cap in 2026. Plan amendments must be executed by Dec. 31, 2025 to adopt the new limit."  MORE >>

21 pages; Nov. 13, 2025. "What's New: Trump account and new Form 4547.... If the child was born after 2024 and before 2029 and meets certain other requirements, the authorized individual may also elect to receive a $1,000 pilot program contribution to the child's Trump account. Both elections can be made on Form 4547, which can be filed at the same time as the authorized individual's 2025 income tax return."  MORE >>

"Employees can reimburse dependent care expenses through a DCFSA for their qualifying children to age 13, a disabled spouse who lives with the employee for more than half the year, and disabled tax dependents who live with the employee for more than half the year.... The OBBB Increases the Dependent Care FSA Limit to $7,500"  MORE >>

"The OBBB Act expands the permissible use of HSA funds ... Dependent Care FSA limit increased to $7,500.... Expansion of employer childcare tax credit.... Student loan repayments as qualified educational assistance.... Workplace benefits with limits on favorable tax treatment: Moving expenses.... Bicycle commuting reimbursements."  MORE >>

"While DCAPs provide significant tax benefits, they do so at a cost -- participant benefit elections are generally irrevocable for the next 12 months.... The exception to this rule is when the employee experiences a qualifying event (sometimes referred to as a qualifying life event, or 'QLE') as defined by the plan."  MORE >>

"[1] Decide whether to adopt the new $7,500 limit for 2026. [2] Amend plan documents and update employee communications and open enrollment procedures accordingly. [3] Coordinate with payroll and administrators to ensure systems and testing procedures are ready for the new limit. [4] Review historical participation data to model whether the higher cap could trigger testing failures and consider conducting prospective testing."  MORE >>

"This article breaks down each update in plain language, helping HR leaders understand what's changing, what to review, and how to keep their benefits plans compliant. Learn how proactive HR teams use these annual updates to strengthen compliance processes and build employee trust."  MORE >>

"While the DCFSA contribution limit is increasing, [OBBBA] did not make changes to [nondiscrimination testing] requirements. You can take a few proactive steps to help increase the likelihood that your plan design does not discriminate. [1] Boost non-HCE participation ... [2] Offer incentives to NHCEs ... [3] Limit HCE elections ... [4] Conduct early or interim testing ... [5] Customize maximum elections by employee group."  MORE >>

"At long last, the One Big Beautiful Bill Act (OBBBA) will increase the annual contribution limits for Dependent Care Assistance Programs (DCAP) ... Except for a one-year increase in the contribution limits during the COVID-19 pandemic, the contribution limits had not changed since 1986.... [1] Dependent Care Assistance Programs ... [2] Allowable expenses -- gainful employment ... [3] Allowable expenses -- care ... [4] Qualifying individuals ... [5] Annual contribution limits ".  MORE >>

"Available data show that very few businesses claim the 45F credit, indicating that the credit has only a minimal impact on encouraging employers to provide child care.... GAO estimated that 169 to 278 corporate business returns claimed a total of between $15.7 million and $18.8 million in the credit on their 2016 returns. For context, this represents less than 1% of corporate tax returns." [IF12379 Sep. 4, 2025]  MORE >>

"[W]orking families should carefully consider choosing a dependent care FSA instead of taking the tax credit, based on the 2026 increase in allowed FSA contributions from $5,000 to $7,500 (or from $2,500 to $3,750 if an employee is married but filing separately).... [E]mployers [should] consider taking steps to adjust their dependent care FSAs to ensure they clear the 55% discrimination test, and that they clearly communicate the options that non-highly compensated employees have in choosing between the FSA or the tax credit."  MORE >>

"Rising costs and the struggles during the pandemic brought the realization that developing federal and provincial programs wasn't just long overdue but a necessary economic strategy to increase workforce participation and invest in the future. By capitalizing on government programs, employers can foster greater employee loyalty and reduce burnout -- which affects workforce productivity -- through employee-sponsored benefits that support child care."  MORE >>

"Increasing the maximum pre-tax contributions employees can make to a DCFSA ... may cause the DCFSA to be discriminatory under IRC section 129. This is because it is likely that highly compensated employees (HCEs) will utilize the increase more than lower-paid employees.... [C]onsider conducting projected non-discrimination testing to assess the potential for failure and the resulting tax consequences for HCEs."  MORE >>

"Although some of the OBBB's benefits provisions simply make permanent existing temporary suspensions in the Code, others will provide opportunities for enhancement or expansion of employee benefit programs.... Conversely, the OBBB also presents some challenges for employers, who must now revise how they monitor certain executive compensation amounts, and make operational changes to their payroll administration systems for certain wages such as overtime pay."  MORE >>

"Given the [1] nature of the 55% average benefits test, [2] OBBB enhancements to the child and dependent care tax credit, and [3] disproportionate use of the dependent care FSA by highly compensated employees, it is possible the new OBBB landscape could inadvertently lead to reduced access to the dependent care FSA in 2026."  MORE >>

"The One Big Beautiful Bill Act introduces lasting changes to dependent care benefits, including permanent increases to the annual income exclusion for employer-provided dependent care assistance programs, as well as enhancements to the child and dependent care tax credit and the employer-provided childcare tax credit, beginning in 2026."  MORE >>

"[P]lan sponsors should consider the following measures ... [1] Reevaluate dependent care FSAs.... [2] Consider retroactively or prospectively reinstating first-dollar telehealth and other remote-care service coverage under HDHPs.... [3] Identify whether to adopt or further explore [direct primary care] arrangements.... [4] Review current or potential employer-provided childcare programs in light of expanded tax credits.... [5] Evaluate and make any required updates to plan documents in light of the OBBBA and any changes adopted."  MORE >>

"Tax-exempt organizations with employees who earn $1 million or more may have increased tax liability ... particularly due to severance agreements. However, beginning in 2026, organizations will no longer need to track the top highest paid employees.... If individuals lose ACA premium tax credits, they may instead seek enrollment in employer sponsored plans that could increase plan costs ... Bronze and catastrophic plans are treated as HDHPs regardless of their deductible levels and out-of-pocket maximums."  MORE >>

"The OBBBA contains a number of provisions that impact employee benefit matters, including changes to: [1] controlled group application to the limits to deductibility of certain compensation in excess of $1 million, [2] health savings accounts, [3] dependent care assistance plans, [4] 529 savings accounts, [5] ABLE accounts, [6] new Trump savings accounts, [7] transportation fringe benefits, [8] employer payments of students loans, [9] paid family and medical leave credit for the employer, [10] moving expenses and [11] Federal student loan changes[.]"  MORE >>

"Plan sponsors should determine whether they want to increase their dependent care FSA contribution limit for 2026 and [whether] doing so creates any implications for nondiscrimination testing. If a plan sponsor wants to offer this increased contribution limit in 2026, they should make applicable revisions to their cafeteria plan document and benefit materials."  MORE >>