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William Byrnes (Texas A&M) tax & compliance articles

TaxFacts Intelligence: December 2, 2022

Posted by William Byrnes on December 2, 2022

The Texas A&M Master and LL.M. programs (e.g. international tax, transfer pricing, wealth management, or risk management) are accepting applications from financial professionals and from lawyers. Over 850 enrolled, the enrollment for a course’s section is kept to between 20 and a maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. https://law.tamu.edu/distance-education

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

Many business clients may have begun wondering whether the IRS “family glitch” fix creates any new obligations at the employer level–or merely provides potential new benefits for an employee’s family members.  We have some thoughts on the matter. Also this week, we have more information on the implications of offering an employee signing bonus and ways clients can keep their retirement savings on track even in the midst of the great resignation.  Read on for more.

IRS Announces Fix to ACA “Family Glitch.” The IRS proposed regulations of May 2022 fix the so-called “family glitch” under the Affordable Care Act. Under current law, a family’s ACA marketplace subsidy eligibility is based on the employee’s cost for employee-only coverage (not the cost of the employee’s family coverage). So, if the employee’s contribution for self-only coverage is deemed affordable, the entire family is ineligible for marketplace subsidies (and the employer cannot be assessed an employer mandate penalty). The new proposal would allow an employee’s family members to enroll in marketplace coverage and potentially become eligible for government subsidies if the cost for the family is deemed to be unaffordable. However, there is not any new mandate for employers, so the employer’s obligations would continue to be based on whether the employee’s self-only coverage is deemed affordable. However, it is possible that employers could become subject to additional reporting requirements in order to determine whether the health plan is affordable at the family level.  For more information on the employer mandate, visit Tax Facts Online. Read More

Offering an Employee Signing Bonus? Don’t Forget to Consider DOL Overtime Rules.  Many employers have resorted to offering signing or retention bonuses in order to attract and retain employees in light of today’s labor shortage.  Those business clients should be reminded about the DOL’s overtime calculation rules under the Fair Labor Standards Act (FLSA).  Under FLSA rules, all compensation paid to employees must be included when calculating the employees’ regular rate of compensation for purposes of determining the correct overtime premium in weeks where the employee works overtime.  While there may be cases where the employer merely offers the bonus in exchange for accepting an employment offer, many employers are structuring these bonuses with strings attached–so that, for example, the employee may be required to work for a certain amount of time before becoming eligible for the bonus.  In these cases, it’s likely that the DOL could require the bonus to be considered when determining the employee’s proper overtime rate.  For more information on the DOL overtime rules, visit Tax Facts Online. Read More

Funding a Spousal IRA Can Preserve Retirement Security in the Midst of the “Great Resignation.”  Workers have left their jobs in record numbers in recent months. Those clients should be advised on the rules governing spousal IRA contributions as a way to keep retirement savings on track going forward. Generally, taxpayers are required to have taxable compensation for the year to open or contribute to an IRA. However, taxpayers who are married and file joint returns with a spouse are entitled to make a contribution based on a working spouse’s taxable compensation. The non-working taxpayer simply opens an IRA or Roth IRA in their own name and contributes to that account based on the spouse’s compensation. To qualify, the client must have been married to the working spouse as of December 31 of the year of contribution. If the clients are divorced as of December 31, they become unable to make contributions based on a spouse’s earned income even if they were married for the majority of the year in question.  For more information on the rules governing IRA contributions, visit Tax Facts Online. Read More

Look in your Tax Facts Online app for our continuing analysis of 2022 and 2023 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, 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, ranked in the 1st tier of law schools and is ranked in the top 10 for the employment of its graduating law students among U.S. law schools.

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