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IRS Decreases 2018 HSA Contribution Limit for Certain Individuals

The Internal Revenue Service  has announced that the 2018 annual limitation on health savings account (HSA) contributions by individuals with family coverage under a high deductible health plan (HDHP) is now $6,850. This limit was previously announced as $6,900, but has been revised downward due to an inflation adjustment provision in the Tax Cuts and Jobs Act. The 2018 annual limitation on HSA contributions by an individual with self-only coverage under a HDHP remains unchanged at $3,450. Click here to read the IRS announcement.  ...

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IRS Updates Q&As on ACA Information Reporting

The Internal Revenue Service has updated its Q&As regarding Form 1094-C and 1095-C information reporting by applicable large employers (ALEs)—generally those with at least 50 full-time employees, including full-time equivalent employees, in the preceding calendar year. The Q&As answer the following questions and more: For which employees must an ALE file Form 1095-C? What information must an ALE furnish to its employees? How should information about an offer of coverage for the month in which an employee is hired be reported on Form 1095-C? How should an ALE complete Form 1095-C for a full-time employee who terminates employment during a calendar year and receives...

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Reminder: Form 1094 & 1095 Deadlines Approaching

Certain Employers Required to Electronically File Returns Employers subject to the Affordable Care Act's (ACA) information reporting requirements are reminded that the deadlines to file and furnish Forms 1094 and 1095 are quickly approaching. The reporting deadlines in 2018 are for reporting information on the 2017 calendar year, and are as follows: Applicable large employers (ALEs)—generally those with 50 or more full-time employees, including full-time equivalents—must file Forms 1094-C and 1095-C with the IRS no later than February 28, 2018 (or April 2, 2018 if filing electronically). ALEs must also furnish a Form 1095-C to all full-time employees by March 2, 2018. Self-insuring...

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IRS updates withholding calculator and Form W-4 for new tax law

The Internal Revenue Service released the updated withholding calculator and Form W-4 that it had promised for the new tax law to help taxpayers make sure they have the proper amount of taxes taken out of their paychecks. The IRS is urging taxpayers to use both tools to check on their withholding. “Following the major changes in the tax law, the IRS encourages employees to check their paychecks to help ensure they’re having the right amount of tax withheld for their personal situation,” said Acting IRS Commissioner David Kautter in a statement. The Tax Cuts and Jobs Act made many changes in the...

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New Tax Law Takes a Bite out of Meals & Entertainment Deductions

H.R. 1, known as the Tax Cuts and Jobs Act, has changed the deductibility of certain meals and entertainment expenses.  Prior to 2018, a taxpayer could deduct 50% of business meals and entertainment and 100% of meals provided on the employer’s premises and for the convenience of the employer.  Under the act, taxpayers are still generally able to deduct 50% of the food and beverage expenses associated with operating their trade or business (e.g., meals consumed by employees on work travel).  For amounts incurred and paid after December 31, 2017 and until December 31, 2025, the act expands this 50%...

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IRS Confirms Impact of Tax Reform on Contribution, Benefits Limits

The Internal Revenue Service says that the Tax Cut and Jobs Act of 2017 does not affect the tax year 2018 dollar limitations for retirement plans announced last October – but it will have an impact in the future. Of course, the tax code specifies dollar limitations on benefits and contributions under qualified retirement plans, and it requires the Treasury Department to annually adjust these limits for cost-of-living increases using procedures that are similar to those used to adjust benefit amounts under the Social Security Act. The IRS notes that the recently enacted TCJA made no changes to the section of the...

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DOL Proposal Encourages Creation of Association Health Plans

Rule Would Permit Associations Based on Industry or Geography The U.S. Department of Labor (DOL) has issued a proposed rule which would allow employers to join together as a single group to offer group health insurance coverage to current employees, former employees, working owners, and their family members as part of an "association health plan." If finalized, the rule would allow association health plans to be formed on the basis of industry or geography, such as by state, city, county, or metropolitan area. Notably, the proposed rule would subject association health plans to the nondiscrimination rules currently applicable to large group coverage...

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Reminder: Individual Mandate Remains in Effect for 2018

Requirement is Effectively Repealed Beginning in 2019 Individuals are reminded that the section of the Tax Cuts and Jobs Act which effectively repealed the individual shared responsibility provision ("individual mandate") of the Affordable Care Act does not become effective until 2019. As a result, individuals are required to have minimum essential health coverage, qualify for an exemption from the requirement, or pay a penalty tax for 2018. You can learn more about the Individual Mandate (Individual Shared Responsibility) through SIMA's partner, HR360. ...

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Reminder: ‘Pay or Play’ Affordability Percentage is 9.56%

Percentage Down from 2017 Under the employer shared responsibility ("pay or play") provisions of the Affordable Care Act, applicable large employers—generally those who had 50 or more full-time employees (including full-time equivalent employees) in 2017—may be subject to a penalty if they do not offer affordable coverage that provides minimum value to their full-time employees (and their dependents) in 2018. As a reminder, for plan years beginning in 2018, coverage will generally be considered affordable if the employee's required contribution for the lowest cost self-only health plan is 9.56% or less of his or her household income for the taxable year....

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‘Cadillac Tax’ Delayed Until 2022

Tax Previously Set to Become Effective in 2020 President Trump has signed the Extension of Continuing Appropriations Act, which (among other things) delays implementation of the "Cadillac Tax," the Affordable Care Act's excise tax on high-cost employer-sponsored health coverage, until 2022. Previously, this tax—which would impose a 40% tax on plans that cost more than $10,200 (for self-only coverage) and $27,500 (for family coverage)—was set to become effective in 2020. You can find more information about Cadillac Tax here. ...

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