News Archive

Text of IRS Notice 2020-35: Relief with Respect to Deadlines Applicable to Employment Taxes, Employee Benefits, and Exempt Organizations Affected by the Ongoing Coronavirus Disease 2019 Pandemic (PDF)

"[T]he revised deadline for an Affected Taxpayer to perform a Time-Sensitive Action ... is July 15, 2020, unless a different revised deadline is specified ...

"The Time-Sensitive Actions [include] ...

• Application for a funding waiver under section 412(c) for a defined benefit pension plan that is not a multiemployer plan....
• With respect to a multiemployer defined benefit pension plan, actions due to be performed on or before the dates described in: 
  • Section 432(b)(3) for the certification of funded status and the notice to interested parties of that certification.
  • Sections 432(c)(1) and 432(e)(1) for the adoption of, and the notification to the bargaining parties of the schedules under, a funding improvement plan or rehabilitation plan.
  • Sections 432(c)(6) and 432(e)(3) for the annual update of a funding improvement plan and its contribution schedules, or rehabilitation plan and its contribution schedules, and the filing of those updates with the Form 5500 annual return....
•     Filing of Form 5330 and payment of the associated excise taxes....
• With respect to the remedial amendment period and plan amendment rules for section 403(b) plans described in Rev. Proc. 2017-18 and Rev. Proc. 2019-39, actions that are otherwise required to be performed on or before March 31, 2020, with respect to form defects or plan amendments. The deadline for those actions is postponed to June 30, 2020 ...
• With respect to pre-approved defined benefit plans, the deadline for the following actions is postponed until July 31, 2020:
  • Adoption of a pre-approved defined benefit plan that was approved based on the 2012 Cumulative List; 
  • Submission of a determination letter application under the second six-year remedial amendment cycle; and
  • Actions that are otherwise required to be performed with respect to disqualifying provisions during the remedial amendment period that would otherwise end on April 30, 2020....
• With respect to a compliance statement issued under VCP, implementation of all corrective actions, including adoption of corrective amendments, required by the compliance statement....
• Request for approval of a substitute mortality table in accordance with section 430(h)(3)(C)....
• With respect to the Form 5498, IRA Contribution Information, Form 5498-ESA, Coverdell ESA Contribution Information, and the Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, the due date for filing and furnishing the forms is postponed to August 31, 2020."

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List of IRS-Approved Nonbank Trustees as of April 1, 2018 (PDF)

An entity that is not a bank (or an insurance company in the case of Archer Medical Savings Accounts and health savings accounts) can request to be a nonbank trustee/custodian by applying in writing and demonstrating that certain requirements will be met in order to handle any of the following fiduciary accounts: [1] Archer Medical Savings Account (MSA); [2] Health Savings Account; [3] Qualified Retirement Plan Custodial Account; [4] 403(b)(7) Custodial Account; [5] Individual Retirement Arrangement (IRA); [6] Roth IRA; [7] Deferred Compensation Plan of State & Local Government and Tax Exempt Organizations; [8] Custodial Accounts Coverdell Education Savings Account. [More information is on an IRS web page.]  MORE >>

Text of IRS Rev. Proc. 2018-18: Inflation-Adjusted Amounts, Revised for Statutory Amendments of the Budget Reconciliation Act (PDF)

"Employee Health Insurance Expense of Small Employers: For taxable years beginning in 2018, the dollar amount in effect under Section 45R(d)(3)(B) is $26,600. This amount is used under Section 45R(c) for limiting the small employer health insurance credit...

"Medical Savings Accounts: For taxable years beginning in 2018, the term 'high deductible health plan' as defined in Section 220(c)(2)(A) means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,300 and not more than $3,450, and under which the annual out-of-pocket expenses ... do not exceed $4,550....

"Adoption Assistance Programs: For taxable years beginning in 2018, under Section 137(a)(2), the amount that can be excluded from an employee's gross income for the adoption of a child with special needs is $13,810 ... [or] for other adoptions by the employee is $13,810. The amount excludable from an employee's gross income begins to phase out under Section 137(b)(2)(A) for taxpayers with modified adjusted gross income in excess of $207,140 and is completely phased out for taxpayers with modified adjusted gross income of $247,140 or more....

"Health Savings Accounts: For calendar year 2018, the annual limitation on deductions under Section 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,450 ... [and] for an individual with family coverage ... is $6,850."

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Text of IRS Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans, for Use in Preparing 2017 Returns (PDF)

22 pages. "This publication explains the following programs. [1] Health Savings Accounts (HSAs). [2] Medical Savings Accounts (Archer MSAs and Medicare Advantage MSAs). [3] Health Flexible Spending Arrangements (FSAs). [4] Health Reimbursement Arrangements (HRAs)."

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IRS Publication 1220: Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G for Tax Year 2017 (PDF)

150 pages, August 2017 revision date. Includes a "First Time Filers Quick Reference Guide" with information about Form 4419, Application for Filing Information Returns Electronically (FIRE), which is used to request authorization to file Forms 1097, 1098 Series, 1099 Series, 3921, 3922, 5498 Series, 8027, 8955-SSA, 1042-S, and W-2G electronically through the Filing Information Returns Electronically (FIRE) System. Excerpt: "Allow a 45-day processing timeframe prior to the earliest information return due date."

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Text of IRS Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans, for Use in Preparing 2016 Returns (PDF)

22 pages; Feb. 10, 2017. "An HSA may receive contributions from an eligible individual or any other person, including an employer or a family member, on behalf of an eligible individual.... An Archer MSA may receive contributions from an eligible individual and his or her employer, but not both in the same year... A Medicare Advantage MSA is an Archer MSA designated by Medicare to be used solely to pay the qualified medical expenses of the account holder who is enrolled in Medicare.... A health FSA may receive contributions from an eligible individual. Employers may also contribute.... An HRA must receive contributions from the employer only. Employees may not contribute."

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Text of 2016 IRS Instructions for Forms 1099-SA and 5498-SA (PDF)

"Due to the very low volume of paper Forms 1099-SA and 5498-SA received and processed by the IRS each year, these forms have been converted to an online fillable format.... File Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA, to report distributions made from a health savings account (HSA), Archer medical savings account (Archer MSA), or Medicare Advantage MSA (MA MSA).... File Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, with the IRS on or before June 1, 2017, for each person for whom you maintained a [HSA, Archer MSA, or MA MSA] during 2016."

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Text of 2017 IRS Instructions for Forms 1099-SA and 5498-SA (PDF)

"File Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA, to report distributions made from a health savings account (HSA), Archer medical savings account (Archer MSA), or Medicare Advantage MSA (MA MSA). The distribution may have been paid directly to a medical service provider or to the account holder. A separate return must be filed for each plan type.... File Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, with the IRS on or before June 1, 2018, for each person for whom you maintained a [HSA, MSA, or MA MSA] during 2017. You are required to file if you are the trustee or custodian of an HSA, Archer MSA, or MA MSA. A separate form is required for each type of plan."

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Text of IRS Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans (PDF)

21 pages, dated Jan. 13, 2016. "An HSA may receive contributions from an eligible individual or any other person, including an employer or a family member, on behalf of an eligible individual.... An Archer MSA may receive contributions from an eligible individual and his or her employer, but not both in the same year.... A health FSA may receive contributions from an eligible individual. Employers may also contribute.... An HRA must receive contributions from the employer only. Employees may not contribute."

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Text of IRS Instructions for 2015 Form 8853: Archer MSAs and Long-Term Care Insurance Contract (PDF)

"Use Form 8853 to: [1] Report Archer MSA contributions (including employer contributions), [2] Figure your Archer MSA deduction, [3] Report distributions from Archer MSAs or Medicare Advantage MSAs, [4] Report taxable payments from long-term care (LTC) insurance contracts, or [5] Report taxable accelerated death benefits from a life insurance policy."

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Text of 2016 Instructions for IRS Forms 1099-SA and 5498-SA (PDF)

"File Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA, to report distributions made from a health savings account (HSA), Archer medical savings account (Archer MSA), or Medicare Advantage MSA (MA MSA). The distribution may have been paid directly to a medical service provider or to the account holder. A separate return must be filed for each plan type. Transfers. Do not report a trustee-to-trustee transfer from one Archer MSA or MA MSA to another Archer MSA or MA MSA, from an Archer MSA to an HSA, or from one HSA to another HSA. For reporting purposes, contributions and rollovers do not include transfers."

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Text of Rev. Proc. 2014-61: Inflation-Adjusted Limits for 2015 Under Section 125 and Other Code Provisions (PDF)

The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) rises to $2,550, up $50 dollars from the amount for 2014. Under the small business health care tax credit, the maximum credit is phased out based on the employer's number of full-time equivalent employees in excess of 10 and the employer's average annual wages in excess of $25,800 for tax year 2015, up from $25,400 for 2014. The monthly limitations for qualified transportation fringe benefits are unchanged ($130 for commuter vehicles and transit passes; $250 for qualified parking).

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2015 Instructions for IRS Forms 1099-SA and 5498-SA (PDF)

"File Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA, to report distributions from made from a health savings account (HSA), Archer medical savings account (Archer MSA), or Medicare Advantage MSA (MA MSA). The distribution may have been paid directly to a medical service provider or to the account holder. A separate return must be filed for each plan type.... File Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, with the IRS on or before June 1, 2016, for each person for whom you maintained a health savings account (HSA), Archer medical savings account (Archer MSA), or Medicare Advantage MSA (MA MSA) during 2015."

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IRS Information Letters Address Unique Qualifying Medical Expenses

The IRS recently addressed unique taxpayer questions regarding whether certain expenses qualify as medical expenses under Code ? 213 and whether those expenses could be reimbursed from a health care flexible spending account or medical reimbursement account.

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Legislation Would Tax Some FSA, HSA Distributions

Legislation approved by the House would require account holders to pay taxes on distributions from health care flexible spending accounts ..., health savings accounts ... and Archer medical savings accounts that were used to pay for abortion services.

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CRS Report: Side-by-Side Comparison of Tax-Advantaged Accounts for Health Care Expenses (PDF)

11 pages. "This report provides brief summaries of the four [types of tax-advantaged] accounts and compares them with respect toeligibility, contribution limits, use of funds, and other characteristics for tax year 2010. The report then discusses changes to the accounts resulting from the enactment of the Patient Protection and [ACA].... The final section of the report covers participation levels in these accounts." [Report RS21573, Jun. 18, 2010]

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Text of IRS Rev. Rul. 2010-23: Making Obsolete the Existing Revenue Ruling on Reimbursement of Drug Expenses by FSAs, HRAs, HSAs, MSAs (PDF)

1 page. Excerpt: Because the definition of medical expenses has been changed, the Internal Revenue Service has concluded that the ruling position stated in Rev. Rul. 2003-102 is no longer determinative. Accordingly, Rev. Rul. 2003-102 is declared obsolete as of the effective date of section 9003 of the Affordable Care Act.

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Text of IRS Notice 2010-59: Drugs (Except Insulin) Purchased After 2010 Cannot Be Reimbursed from FSAs, HRAs, HSAs, MSAs Unless Prescribed (PDF)

6 pages. Excerpt: The Affordable Care Act, enacted in March, established a new uniform standard that, effective Jan. 1, 2011, applies to FSAs and health reimbursement arrangements (HRAs). Under the new standard, the cost of an over-the-counter medicine or drug cannot be reimbursed from the account unless a prescription is obtained. The change does not affect insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles.

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Say Goodbye to Reimbursement of Over-the-Counter Medications Through FSAs, HRAs, MSAs

Excerpt: The House Ways and Means Committee's amendment to the America's Affordable Health Choices Act (H.R. 3200) would prohibit employees from using health FSA dollars to pay for over-the-counter medications. The proposal is estimated to raise $8.2 billion over 10 years. The proposal also would extend to health savings accounts (HSAs), health reimbursement arrangements (HRAs) and Archer Medical Savings Accounts (Archer MSAs).

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Text of IRS Rev. Proc. 2008-48: Treatment of Dependent by Noncustodial Parent When Custodial Parent Has Not Released Claim (PDF)

5 pages. Excerpt: The Service will treat a child described in the scope section of this revenue procedure of taxpayers within the scope of this revenue procedure as the dependent of both parents under §§ 105(b), 106(a), 132(h)(2)(B), 213(d)(5), 220(d)(2), and 223(d)(2), whether or not the custodial parent releases the claim to the exemption under § 152(e)(2).... This revenue procedure is effective August 18, 2008. However, taxpayers may apply this revenue procedure in any taxable year beginning after December 31, 2004, for which the period of limitation on credit or refund under § 6511 has not expired as of August 18, 2008.

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A Reconsideration of Tax Expenditure Analysis (PDF)

87 pages. Excerpt: This document, prepared by the staff of the Joint Committee on Taxation ... reconsiders the utility of the JCT Staff's current implementation of tax expenditure analysis.... Driven off track by seemingly endless debates about what should and should not be included in the 'normal' tax base, tax expenditure analysis today does not advance either of the two goals that inspired its original proponents: clarifying the aggregate size and application of government expenditures, and improving the Internal Revenue Code.

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IRS Announcement 2008-44: No Penalty for Withdrawing Stimulus Payment That Was Deposited Directly Into IRA, HSA or Similar Accounts (PDF)

4 pages. Excerpt: The account specified by the taxpayer could be a checking or saving account, or an account that is given favorable tax treatment under the Code, such as an IRA, a health savings account (HSA), an Archer MSA, a Coverdell education savings account (CESA), or a qualified tuition program account (QTP or section 529 program) .... An individual may withdraw from a tax-favored account an amount less than or equal to the amount of the Economic Stimulus Payment directly deposited into such account, notwithstanding any restrictions in the Code. To the extent that the withdrawal is made no later than the time for filing the taxpayer's income tax return for 2008, plus extensions (or in the case of a CESA, the later of May 31, 2009, or the time for filing the taxpayer's income tax return for 2008, plus extensions), the amount withdrawn is treated as neither contributed to nor distributed from the account. Thus, the amount withdrawn will not be subject to regular federal income tax nor to any additional tax or penalty under the Code.

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IRS Issues 2008 Inflation-Adjusted Limits for Pre-Tax Transportation and Other Fringe Benefits

Excerpt: In general, IRC § 132(f) allows employees to exclude from their gross incomes, the value – up to certain limits – of 'qualified transportation fringe' benefits provided by their employers. 'Qualified transportation fringe' benefits include – transportation between home and work in a 'commuter highway vehicle;' mass transit passes; and 'qualified' parking.

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Announcement 07-44: Archer Medical Savings Accounts (MSAs) Allowed to Continue Past April 19, 2007 (PDF)

6 pages. Excerpt: Sections 220 (i) and (j) of the Internal Revenue Code provide that if the number of Archer Medical Savings Account (Archer MSA) returns filed for 2005 or 2006 or a statutorily specified projection of the number of Archer MSA returns that will be filed for 2005 or 2006 exceeds 750,000, then April 19, 2007, is a 'cut-off' date for the Archer MSA pilot project.... [The IRS has determined that] April 19, 2007 is not a 'cut-off' date[.]

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Text of 2007 'Medicare & You' Handbook (PDF)

116 pages. Provides insight into what individuals are being told about coordination with employer-provided health plans (p. 61), long-term care insurance (p. 62), and Medical Savings Accounts (p. 39).

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