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Archive for June, 2021

TaxFacts Intelligence June 24, 2021

Posted by William Byrnes on June 24, 2021


Both the Courts and the IRS have had a busy week. The Supreme Court rejected the latest challenge to the Affordable Care Act and the ACA remains the law of the land–although the next ACA challenge has already been filed in Texas. On the IRS side, we have a new online tool designed to help lower-income taxpayers take advantage of the advance child tax credit benefits for 2021. Read on to make sure you’re up to date on the latest news.

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Supreme Court Dismisses Latest ACA Challenge

In a 7-2 vote, the Supreme Court dismissed the latest challenge to the constitutionality of the Affordable Care Act (ACA). Rather than addressing the case on the merits, the Court determined that the plaintiffs did not have standing to sue–meaning that the plaintiffs had no legal right to launch the challenge in the first place. Because the individual mandate was reduced to $0 by the 2017 tax reform legislation, the plaintiffs would suffer no adverse consequences if they simply chose to not purchase health insurance. Therefore, there was no government action connected to their injury. However, yet another constitutional challenge to the ACA has already been filed. The next lawsuit challenges the law’s zero dollar coverage for preventative services–including vaccines, contraceptives and other preventative services. For more information on the ACA employer mandate, visit Tax Facts Online. Read More

Related Questions:

8845. How does an employer that has been in existence for less than one year determine whether it is subject to the ACA shared responsibility provisions?

8846. How does an employer that has a common owner with another employer determine whether it is subject to the ACA shared responsibility provisions?

Considerations for Resuming RMDs in 2021

The 2020 CARES Act suspended all RMD requirements for the 2020 tax year. That relief was not extended into 2021, although taxpayers have no obligation to “make up” their skipped 2020 RMDs. However, many taxpayers may be surprised to see that the amount they’re required to withdraw in 2021 is larger than distributions prior to the pandemic. The amount of a client’s RMD is determined based upon their account balance and life expectancy factor. Strong market performance means that many clients will have larger retirement account balances, meaning that the percentage of withdrawal required has also increased. Taxpayers who reached age 70½ in 2019 are required to resume taking RMDs. However, taxpayers who had not reached age 70½ in 2019 are not required to begin RMDs until April 1 of the year after they reach age 72. These RMD rules apply to traditional retirement accounts and inherited accounts—but not to Roth IRAs. For more information on the RMD rules, visit Tax Facts Online. Read More

Related Questions:

3683. What can be done before the IRA required beginning date in order to minimize required minimum distributions?

3684. How are minimum distribution requirements calculated if an individual owns more than one IRA?

IRS Releases New Online Tool to Help Taxpayers Register for Monthly Child Tax Credit Payments

The IRS has launched a new online tool to help taxpayers who may not be required to file a federal income tax return register to receive installment payments for the 2021 child tax credit. The tool provides a way for eligible people who don’t make enough income to have an income tax return-filing obligation to provide the IRS the basic information to figure and issue their Advance Child Tax Credit payments beginning next month. Eligible individuals can visit IRS.gov to access the tool and provide their name, address, Social Security numbers and direct deposit information so that the IRS can deposit their installment payments. Taxpayers who have already filed a return are not required to take any other action to receive installment payments of the child tax credit. The IRS release noted that these are the only two options to sign up for advance payment benefits–any other method offered is a scam. For more information on the child tax credit in 2021, visit Tax Facts Online. Read More

Related Questions:

756. What credits may be taken against the tax?

757. Who qualifies for the tax credit for the elderly and the permanently and totally disabled and how is the credit computed?

758. Who qualifies for the child tax credit?

Wealth & Risk Management Studies for Industry Professionals

The Texas A&M graduate programs for risk management for areas like wealth management, tax risk management, financial risk, economic crimes, ESG risk, are accepting applications for fall. Over 500 candidates are currently enrolled in the graduate courses yet maximum enrollment per course section is maintained at 30 so that each student receives meaningful feedback throughout the course from the full-time academic and professional part-time faculty. Check out the graduate program here: https://law.tamu.edu/distance-education

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

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TaxFacts Alert June 21, 2021 for wealth managers representing NCAA athletes

Posted by William Byrnes on June 22, 2021


The Supreme Court upheld, in a unanimous decision of all nine Justices, the District Court’s injunction against the NCAA. The injunction allows the NCAA to maintain rules limiting undergraduate athletic scholarships and other compensation related to athletic performance. BUT the injunction stops as unlawful NCAA rules limiting the education-related benefits schools may make available to student-athletes.

Colleges and universities across the country have leveraged sports to bring in revenue, attract attention, boost enrollment, and raise money from alumni. That profitable enterprise relies on “amateur” student athletes who compete under horizontal restraints that restrict how the schools may compensate them for their play. The National Collegiate
Athletic Association (NCAA) issues and enforces these rules, which restrict compensation for student-athletes in various ways. These rules depress compensation for at least some student-athletes below what a competitive market would yield.

Against this backdrop, current and former student-athletes brought this antitrust lawsuit challenging the NCAA’s restrictions on compensation. Specifically, they alleged that the NCAA’s rules violate §1 of the Sherman Act, which prohibits “contract[s], combination[s], or conspirac[ies] in restraint of trade or commerce.”

The Supreme Court upheld, in a unanimous decision of all nine Justices, the District Court’s injunction against the NCAA. The injunction allows the NCAA to maintain rules limiting undergraduate athletic scholarships and other compensation related to athletic performance. BUT the injunction stops as unlawful NCAA rules limiting the education-related benefits schools may make available to student-athletes.

Regarding today’s Supreme Court decision (entire 45-page opinion is available here), first it was expected by industry analysts and court watchers after the Court’s oral arguments March 31, 2021 with an foretelling Q&A session. We are already preparing Tax Facts Intelligence and Q&A for the books/app for financial advisors to leverage the new athletics marketplace and revenue streams and best represent their clients. I know of financial advisory firms that as of Tuesday will be hanging up a ‘sports agent financial advisor shingle’ and trolling SEC high schools, especially Texas, recruiting for tomorrow’s top collegiate athletes to sign up the talent.

Why not? That is how the market already works outside the USA for soccer (what everyone else calls football) and to a lesser extent baseball (albeit not nearly as popular as soccer so we hear much less about baseball camps for Dominican rising star 12 year old players like we hear about for the 12-year-old next Brazilian Pele). 

Interaction with social media followers is the currency of this new era for young athletes and can lead to a couple of hundred thousand during college for the star players, and even millions for the SEC Heisman level types. But, not having the ultimate talent and thus top sports ranking in a field does not also mean that an interactive social media following of millions cannot be created. The Russian tennis star Anna Kournikova, case in point, though she was just a little too early for the modern social media movement. Johnny Manziel, another case in point: had this decision been in place already and had he contracted a great wealth management advisor (thus great personal agent) with social media and promotional background, his life would have been very financially comfortable before his drug abuse ruined him in the pro league (talent or not aside). He certainly could have afforded a stint at the Betty Ford clinic to sober up and clean out.

Via the advice of a great wealth manager, a personality can be leveraged into millions of dollars before the athlete graduates university, or at least hundreds of thousands.

It is clear from the unanimous ruling and the judges questioning and opinions that this is not a restrictive ruling. NCAA proponents are trying to spin that some restriction remains allowable like direct payments to players. But all it takes is one school that has money that wants to break into the big league to beat ‘Bama and LSU. Kind to think of it, I know that school… and don’t think Bama and LSU are just going to let that happen. Let real market competition begin!

An interesting question that I think will lead to much future litigation: How this ruling plays out throughout all sports regarding Title IX (such as a school spending money on men’s football, basketball, baseball, must by federal and state law also spend an equal amount on the equivalent sports for women). I am for market opportunity and thus I think it is an exciting preposition that opportunities will open up in all sports for athletes and wealth manager advisors alike (to negotiate the optimum financial rewards for the athletes).

Also, if athletic programs, such as golf or hockey, are forced to ‘come up’ with additional dollars to attract the star players to remain competitive, will the programs themselves start to think like SEC football (the most profitable league and sport) to generate additional income to meet the demands of staying or obtaining high ranking?  After all, whether it be academics or sports, it is all about ranking. Deans and Provosts rise and fall based on academic rankings. Coaches based on league rankings and national championships. Sports rankings and academic rankings have connection via alumni fundraising as of course voter university name / brand awareness and recognition. Basketball in particular through March madness has supported the academic rankings of universities though academic and sports ranking are not directly connected in voting and evaluation scoring, the indirect connect in undeniable.

This Supreme Court decision is great news for wealth managers / financial advisors who subscribe to Tax Facts because we are well-positioned to enter the new market of clientele representation created for the high school athlete seeking to share in the value that the athlete creates for a university and for the athlete through social media leveraged revenues. Understanding that “value”, generating more of it, and ‘sharing’ in the value is the bread and butter of a holistic wealth manager’s representation of athletes and entertainers.

Texas A&M already has education in this regard for our wealth management students and JDs who focus on such emerging artist/athlete/entertainer representation. We even have a law clinic for this emerging artists run by JD students supervised by my colleague that joined me at Texas A&M from our former law school in SoCal.

Byrnes & Bloink’s Tax Facts Offers a Complete Web, App-Based, and Print Experience: Reducing complicated tax questions to understandable answers that can be immediately put into real-life practice, Tax Facts works when and where you need it….on your desktop, at home on your laptop, and on the go through your tablet or smartphone.

  • all Tax Facts books
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  • weekly transcribed debate discussion for client soft-skill discussion
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Questions? Contact customer service: TaxFactsHelp@alm.com800-543-0874

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TaxFacts Intelligence June 17, 2021

Posted by William Byrnes on June 22, 2021


Taxpayers have a number of valuable tax planning opportunities in 2021. One of the recent changes allows more taxpayers to take advantage of the often-overlooked child and dependent care tax credit for work-related childcare expenses. Another lets clients leverage historically low tax rates to mitigate the impact of future estate tax changes. Are your clients taking advantage of these and other limited-time planning strategies?

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

IRS Issues FAQ on Child and Dependent Care Tax Credit for 2021

Last week, the IRS released new FAQ to help taxpayers understand the expanded child and dependent care tax credit in 2021. For 2021, eligible taxpayers can claim qualifying work-related expenses up to $8,000 for one qualifying person, or $16,000 for two or more qualifying persons (up from $3,000 and $6,000 in prior years). To claim the credit, taxpayers are also required to have earnings. The FAQ is clear that the amount of qualifying work-related expenses claimed cannot exceed the taxpayer’s earnings. Additionally, the taxpayer must subtract employer-provided dependent care benefits, including those provided through a flexible spending account, from total work-related expenses when calculating the credit. As in prior years, the more a taxpayer earns, the lower the percentage of work-related expenses that are taken into account in determining the credit. However, the credit is fully refundable for the first time in 2021. This means eligible taxpayers can receive the credit even if they owe no federal income tax. To be eligible for the refundable credit, a taxpayer (or the taxpayer’s spouse on a joint return) must reside in the United States for more than half of the year. For more information on the credit, visit Tax Facts Online. Read More

Related Questions:

757. Who qualifies for the tax credit for the elderly and the permanently and totally disabled and how is the credit computed?

758. Who qualifies for the child tax credit?

Roth IRA Planning Now for Higher Estate Taxes Later

With tax rates at historic lows, many clients have already evaluated the Roth conversion strategy as a retirement income tax minimization strategy. However, high net worth clients who anticipate estate tax liability in the future might also be attracted to the Roth strategy. IRAs are generally included in calculating the taxable estate. If the estate is subject to estate taxes, that reduces the value of assets left to beneficiaries. Once a beneficiary receives the IRA (after taxes), they generally must deplete the funds within 10 years under the SECURE Act. That means beneficiaries will be required to quickly pay income taxes after the estate taxes have been levied. Distributions from inherited Roth IRAs are not taxable. Further, because the client has paid income taxes during life, they’ve presumably reduced the value of the taxable estate in the process. Given current uncertainties about Biden’s estate tax plans, high net worth clients may be particularly interested in this strategy. For more information on Roth conversions, visit Tax Facts Online. Read More

Related Questions:

3661. Can a taxpayer whose income level exceeds the limitations for Roth IRA contributions maintain a Roth IRA?

3662. Can an individual roll over or convert a traditional IRA or other eligible retirement plan into a Roth IRA?

3664. Can an individual correct a Roth conversion? What is a recharacterization?

RMD Rules Might See Big Changes in Next Round of Retirement Reform

The latest round of retirement reform provisions might include big changes for required minimum distributions (RMDs). Most taxpayers must start taking distributions from traditional retirement accounts when they turn 72. Under the new proposal, the RMD beginning age would increase to age 75. Further, the law would exempt taxpayers with account balances under $100,000 from the RMD rules entirely. In other words, those taxpayers would not be required to take annual distributions from 401(k)s and IRAs. The law would also reduce the penalty for incorrect RMDs from 50 percent of the shortfall amount to 25 percent—and as low as 10 percent if the taxpayer took advantage of the IRS self-correction procedures to correct the mistake. Access to qualified longevity annuities would also be expanded—giving taxpayers an option to minimize their RMDs in future years by purchasing a deferred annuity within their retirement plan. For more information on the current RMD rules, visit Tax Facts Online. Read More

Related Questions:

3683. What can be done before the IRA required beginning date in order to minimize required minimum distributions?

3684. How are minimum distribution requirements calculated if an individual owns more than one IRA?

The Texas A&M graduate programs for risk management for areas like wealth management, tax risk management, financial risk, economic crimes, ESG risk, is accepting applications for fall. Over 500 candidates are currently enrolled in the graduate courses yet maximum enrollment per course section is maintained at 30 so that each student receives meaningful feedback throughout the course from the fulltime academic and professional part-time faculty. Check out the tax risk management program here as an example of the curriculum and courses: https://law.tamu.edu/distance-education/international-tax

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

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International Tax Law and Policy – Certificate starts August 23rd (online)

Posted by William Byrnes on June 15, 2021


The Certificate in International Tax Law and Policy is designed for international tax professionals (including accountants, economists, and financial leaders) to deliver specialized legal training for an in-depth understanding of the international tax risk management field’s changing complex legal aspects. 

This graduate-level Certificate in International Tax Law and Policy will prepare new and experienced international tax professionals to effectively address complex legal and policy challenges with respect to global tax risk. Specifically, participants will be exposed to (i) important U.S. and international laws, regulations and policies in the international tax risk management field, and (ii) advances in theory and practice, as well as applications of law, regulation and policies through case studies through a module-based structure. Individuals who complete the program will be able to synthesize scenarios, practice, and legal regulation in the international tax risk management field, providing analysis or judgments for consideration to organizational leadership with a nuanced perspective.

The Certificate in International Tax Law and Policy provides an industry-responsive curriculum with a focus on the legal aspects of global tax risk as it applies to policies, business, and economic factors. Courses are offered by asynchronous distance learning to provide a flexible schedule for working professionals. Interactive coursework includes case study assignments and regular interaction with classmates through zoom meetings, videos, audio casts, chat rooms, discussion boards, and group breakout sessions.  For more information, please go to law.tamu.edu.

Select three of the following courses:

  • LAW 625 Transfer Pricing l – Methods, Econometrics, and Tangibles
  • LAW 626 Transfer Pricing II – Services and Intangibles
  • LAW 627 International Tax Risk Management I – Data, Analytics, and Technology
  • LAW 647 International Taxation and Treaties I
  • LAW 649 International Taxation and Treaties II
  • LAW 719 Domestic Tax Systems Risk Management
  • LAW 720 International Tax Risk Management II – Data, Analytics, and Technology

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

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TaxFacts Intelligence June 14, 2021

Posted by William Byrnes on June 14, 2021


The Texas A&M graduate programs for risk management for areas like wealth management, tax risk management, financial risk, economic crimes, ESG risk, is accepting applications for fall. Over 500 candidates are currently enrolled in the graduate courses yet maximum enrollment per course section is maintained at 30 so that each student receives meaningful feedback throughout the course from the fulltime academic and professional part-time faculty. Check out the tax risk management program here as an example of the curriculum and courses: https://law.tamu.edu/distance-education/international-tax

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

ARPA Expands Child Tax Credit for 2021 

The ARPA expanded and enhanced the child tax credit for the 2021 tax year.  For tax years beginning after December 31, 2020 and before January 1, 2022, the child tax credit amount increased from $2,000 to $3,000 per qualifying child.  The credit amount is also fully refundable for the 2021 tax year only (under TCJA, $1,400 was refundable).  The $3,000 amount is also further increased to $3,600 per qualifying child under the age of six years old as of December 31, 2021.  For more information on the child tax credit, visit Tax Facts Online. Read More

Eligibility for 2021 Child Tax Credit and Advance Child Tax Credit Payments

A taxpayer can receive advance Child Tax Credit payments even if earning zero income in 2020 or 2021, if eligible for the credit otherwise. 

IRS online tool to help low-income families register for monthly Child Tax Credit payments

The IRS unveiled an online Non-filer Sign-up tool designed to help eligible families who don’t normally file tax returns register for the monthly Advance Child Tax Credit payments. The IRS will begin disbursing advance Child Tax Credit payments on July 15. After that, payments will be disbursed on a monthly basis through December 2021. In June 2021, the IRS will send each eligible taxpayer a “Letter 6417” that informs the amount of the estimated Child Tax Credit monthly payments.

This tool, an update of last year’s IRS Non-filers tool, is also designed to help eligible individuals who don’t normally file income tax returns register for the $1,400 third round of Economic Impact Payments (also known as stimulus checks) and claim the Recovery Rebate Credit for any amount of the first two rounds of Economic Impact Payments they may have missed.

The IRS will automatically determine eligibility for most families

Eligible families who already filed or plan to file 2019 or 2020 income tax returns should not use this tool. Once the IRS processes their 2019 or 2020 tax return, the information will be used to determine eligibility and issue advance payments. Families who want to claim other tax benefits, such as the Earned Income Tax Credit for low- and moderate-income families, should not use this tool and instead file a regular tax return.

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TaxFacts Intelligence June 10, 2021

Posted by William Byrnes on June 10, 2021


The Biden administration is moving full steam ahead with proposals to modify the U.S. and international tax systems. Some proposals would create a huge benefit for taxpayers–while others could leave clients on the hook for a surprise tax bill. This week, we dig a little deeper into the proposals–and outline a few surprises contained in the newly-released Green Book. Are your clients ready for what’s to come?

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Biden’s Latest Tax Proposals: Two Big Surprises for Tax Professionals 

More details about President Biden’s tax plan have emerged—and the latest proposal contains two major tax surprises. First, Biden’s tax plans would make any capital gains tax hike retroactive to April 28, 2020. That means clients who have engaged in tax planning strategies to avoid higher rates might wind up subject to the higher rates regardless, if this provision makes its way into the final proposal. Second, not only would the stepped-up basis rules be repealed, but taxpayers who inherit property would be required to recognize gain at the time of death—even if the individual doesn’t immediately sell the inherited property. In other words, the property could be immediately subject to both the estate tax and income or capital gains tax. Click here to get a more in-depth expert analysis of the latest tax proposals. Read More

Related Questions:

692. How is the tax basis of property acquired from a decedent determined?

G-7 Announces Support for Global Minimum Corporate Tax

Democrats have often advocated for imposition of a global minimum corporate tax rate—and the latest Biden tax plan would increase the U.S. corporate income tax rate from 21% to 28%. Over the weekend, top international finance officials in the Group of Seven (G-7) indicated broad support for a worldwide minimum corporate income tax of at least 15%. If implemented, the global minimum tax would ensure that large corporations pay a minimum tax on their earnings, regardless of where the entity is located. International support could be a critical turning point for President Biden’s corporate tax increase proposals. After all, a key criticism of increasing U.S. corporate income taxes is that it puts U.S. corporations at a global disadvantage and incentivizes techniques to shift income to lower tax jurisdictions. With a worldwide minimum tax in place, U.S. corporations would lose incentive to move their income elsewhere. Of course, it remains to be seen whether the proposals will come to fruition, and advisors should continue to monitor the evolving situation closely when advising on corporate tax issues. For more information on the U.S. corporate income tax structure, visit Tax Facts Online. Read More

Related Questions:

797. How is a corporation taxed on capital gains?

798. How was a corporation’s alternative minimum tax calculated prior to repeal by the 2017 Tax Act?

When Can an Employer Require All Employees to be Vaccinated: The Details

The EEOC recently clarified the incentive issue when it comes to employers who wish to encourage vaccination in the workplace. The guidance also addresses whether employers can strictly require employees to be vaccinated for COVID-19 before they re-enter the workplace. Generally, employers can require vaccination if vaccination is job-related and a business necessity given COVID-19 safety concerns. However, if an employee has a disability or sincerely-held religious belief that would prevent vaccination, the employer must offer reasonable accommodation—unless the accommodation requested would create an undue hardship. The employer generally cannot require those employees with medical reasons or religious objections to choose between obtaining the vaccine and returning to work unless allowing the unvaccinated employee to return to work would pose a “direct threat” to the health and safety of the workforce. For more information on the employer tax credit for vaccine-related leave, visit Tax Facts Online. Read More

Related Questions:

0101. Mandatory COVID Vaccination

We want your feedback on TaxFacts Q&A for the future? Email me at williambyrnes-gmail

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

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TaxFacts Intelligence June 3, 2021

Posted by William Byrnes on June 4, 2021


Happy Summer, readers! This week’s newsletter is dedicated to helping clients—both employers and employees—maximize their health-related benefits and tax credits (even when those benefits are only available for a limited time). Do you have questions about situation-specific COBRA eligibility, little-known HSA tricks or the ever-evolving EEOC vaccine guidance for employers? Read on to see if we’ve got the answers this week. 

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

EEOC Updates Vaccine Incentive Guidance for Employers

The EEOC has posted an update to its vaccine guidance for employers. Under the new guidance, employers are permitted to offer incentives to employees who voluntarily provide confirmation that they have received the COVID-19 vaccine from a third party. Requesting these confirmations will not be treated as disability-related inquiries under the ADA or requests for genetic information under GINA. Employers should be aware that these incentives are treated differently than incentives offered for employer-provided vaccines. If the incentive is actually for the purpose of encouraging an employee to receive the vaccine from the employer or an agent, employers should continue to use caution against offering an incentive that can be construed as “coercive”. That’s because employees must provide certain health information before receiving the vaccine—and employees should not be pressured to disclose medical information to their employers. For more information on the available tax credit for employers who offer paid vaccine leave to employees, visit Tax Facts Online. Read More

Related Questions:

773. What happens when the employee has exhausted the paid time off under the Families First Coronavirus Response Act (FFCRA)? Does the employee have the right to return to work?

8895. What is a “de minimis” fringe benefit?

Am I Eligible for Federal COBRA Assistance? Case-Specific IRS Guidance

The IRS guidance on the availability and implementation of the ARPA 100 percent COBRA premium assistance provides some useful guidance on specific scenarios that employers and employees may now be facing. Generally, individuals remain assistance-eligible individuals (AEIs) during eligibility waiting periods if the period overlaps with the subsidy period. For example, the individual will be an AEI during periods outside the open enrollment period for a spouse’s employer-sponsored health coverage. Employers who change health plan options must place the AEI in the plan that’s most similar to their pre-termination plan, even if it’s more expensive (and the 100 percent subsidy will continue to apply). Importantly, employers who are no longer covered by federal COBRA requirements may still be required to advance the subsidy (for example, if the employer terminated employees so that the federal rules no longer apply). If the employer was subject to COBRA when the individual experienced the reduction in hours or involuntary termination, the employer must offer the subsidy. For more information on the COBRA premium subsidy, visit Tax Facts Online. Read More

Related Questions:

0121. COBRA Subsidies Back on the Table for 2021

371. When must an election to receive COBRA continuation coverage be made?

Maximizing Post-Pandemic HSA Benefits

HSAs and other tax-preferred health benefits have taken on a whole new meaning in the wake of the pandemic. It’s important that clients fully understand the rules so that they aren’t leaving valuable benefits on the table. In 2022, annual HSA contribution limits will rise to $3,650 for self-only coverage or $7,300 for family HDHP coverage. (HDHPs are health insurance plans that have a minimum annual deductible of $1,400 for self-only coverage ($2,800 for family coverage).). Taxpayers aged 55 and up can contribute an extra $1,000 per year. Taxpayers don’t have to fund an employer-sponsored HSA. Even if the client has been laid off or furloughed, clients with HDHP coverage can open an HSA at their bank and fund the account independently. Additionally, clients who have lost their jobs continue to have access to the funds in their old HSA, and can even transfer that HSA to a new provider. In other words, as long as the client remains covered by a HDHP, there is no “use it or lose it” rule. The funds simply roll over from year to year and continue to grow tax-free. For 2021, that same benefit has been extended to health FSAs. With an HSA, however, the rollover benefit is even more substantial because once the participant reaches age 65, the account can be accessed without penalty for any reason—much like a typical retirement account. The funds are simply taxed as ordinary income upon withdrawal, like a 401(k) or IRA. For more information on HSA advantages, visit Tax Facts Online. Read More

Related Questions:

388. What is a Health Savings Account (HSA) and how can an HSA be established?

391. Who is an eligible individual for purposes of a Health Savings Account (HSA)?

DOL Released Final Rule on Considering Non-Financial Factors in Selecting Retirement Plan Investments The DOL released a final rule on whether environmental, social and governance (ESG) factors can be considered when retirement plan fiduciaries are selecting plan investments without violating their fiduciary duties.  Plan fiduciaries are obligated to act solely in the interest of plan participants and beneficiaries when making investment decisions.  The final rule confirms the DOL position that plan fiduciaries must select investments based on pecuniary, financial factors.  Fiduciaries are required to compare reasonably available investment alternatives–but are not required to scour the markets.  The rule also includes an “all things being equal test”–meaning that fiduciaries are not prohibited from considering or selecting investments that promote or support non-pecuniary goals, provided that they satisfy their duties of prudence and loyalty in making the selection.  For more information, visit Tax Facts Online. Read More We are curious for your feedback on the rule and its impact on your function as a financial advisor, if any? Email me at williambyrnes-gmail

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

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