IRS Publication 15-B (Employer’s Tax Guide to Fringe Benefits (For use in 2021))
Available at https://www.irs.gov/pub/irs-prior/p15b–2021.pdf
The 2021 version of Publication 15-B reflects changes to a variety of fringe benefit rules, many of which provide COVID-19-related relief. Here are highlights:
FSA Relief. The publication reflects relief for health and dependent care FSAs that allows employers increased flexibility for election changes, carryovers, and grace periods (among other things) in 2020 and 2021 (see our Checkpoint article).
High-Deductible Health Plans Relief. Telehealth and other remote care services are listed as permissible coverage for HDHP purposes (i.e., coverage that will not disqualify an individual from HSA eligibility) for plan years beginning on or before December 31, 2021 (see our Checkpoint article).
Vehicle Valuation Flexibility. The publication summarizes relief allowing employers to switch from the automobile lease valuation rule to the vehicle cents-per-mile rule for 2020, and—for those that made the switch—to continue using the vehicle cents-per mile rule or revert to the automobile lease valuation rule for 2021, if certain requirements are met (see our Checkpoint article).
Vanpool Relief. The publication notes that, for 2020, the “80/50 rule” (setting forth mileage and capacity requirements for vanpooling benefits to be excludable from employees’ income) was considered satisfied if, at the beginning of 2020, the employer reasonably expected the vehicle’s use to satisfy the rule, but the rule was not actually satisfied due to the COVID-19 emergency (see our Checkpoint article). Employers are instructed to check the IRS website to see whether this relief is extended to 2021. [EBIA Comment: At this time, it does not appear that the relief has been extended.]
Student Loan Repayments. The publication reflects that, through 2025, student loan payments are permitted under an employer’s qualified educational assistance program (see our Checkpoint article).
The 2021 version of Publication 15-B also provides the 2021 dollar amounts for various benefit-related limits and definitions, including the monthly limits under qualified transportation plans; the limit on health FSA salary reductions; limits related to QSEHRAs (for the transportation, health FSA, and QSEHRA amounts, see our Checkpoint article); HSA-related limits and thresholds (see our Checkpoint article); and the standard mileage rate for valuing the personal use of employer-provided vehicles (see our Checkpoint article).
EBIA Comment: While Publication 15-B addresses a wide array of fringe benefits, it does not provide complete coverage of the many benefits it summarizes. For more information on the various fringe benefit changes covered in Publication 15-B, see EBIA’s Fringe Benefits manual at Sections IV (“Company Cars and Related Benefits”), XX.F (“Vanpooling”), and X (“Qualified Educational Assistance Programs”). For more information on cafeteria plans and health and dependent care FSAs, see EBIA’s Cafeteria Plans manual at Sections XIX (“Overview of Legal Requirements for Health FSAs”) and XXIII (“Overview of Legal Requirements for DCAPs”), and for more information on HSAs and HRAs (including QSEHRAs), see EBIA’s Consumer-Driven Health Care manual at Section II (“Consumer-Driven Health Care: The Short Course”).
Contributing Editors: EBIA Staff.