IRS Gets Rolling on Cadillac Tax Implementation Process

The IRS has issued Notice 2015-16 to “initiate and inform” the process of developing regulations on the excise tax on high-cost employer-sponsored health coverage under Code § 4980I (often referred to as the “Cadillac tax”). Starting in 2018, if the aggregate cost of applicable employer-sponsored coverage provided to an employee exceeds a statutory dollar limit, the excess is subject to a 40% excise tax. The Notice suggests and invites comment on possible implementation approaches to various issues—primarily defining applicable coverage, determining the cost of applicable coverage, and applying the annual dollar limit to the cost. (The IRS anticipates issuing a separate notice to address other matters, including procedural issues relating to calculation and assessment of the tax.) … Read More

Final regs further liberalize amended return alternative simplified research credit election

IRS has issued final regs that allow taxpayers that did not claim a research credit on a previously filed return for a given tax year to elect the alternative simplified research credit (ASC) on an amended return for that year. The final regs replace, largely follow, and somewhat liberalize, temporary regs that were issued in 2014. … Read More

Small employers are provided transition relief from ACA’s Code Sec. 4980D excise tax

In a Notice, IRS has provided limited transition relief from the assessment of the excise tax under Code Sec. 4980D for small employers (i.e., employers who are not applicable large employers (ALEs)) who reimburse or pay a premium for an individual health insurance policy for an employee. The Notice also addresses other topics, including: a) the treatment, for federal tax and for market reform purposes, of arrangements reimbursing premiums of 2% S corporation shareholder-employees; and b) the application of the Affordable Care Act (ACA) market reform provisions to certain employer arrangements to fund Medicare premium payments or to provide a TRICARE-related health reimbursement arrangement (HRA). … Read More