On December 5, 2019, the Internal Revenue Service (IRS) issued the final redesigned 2020 Form W-4, Employee’s Withholding Certificate, to incorporate changes pursuant to the Tax Cuts and Jobs Act of 2017.
Employers historically have maintained executive health examination programs to provide a convenient and efficient means for executives to visit several doctors in one visit, including for vision and annual health checkups. Generally, these programs are covered under employers’ self-insured health policies. This article discusses the taxability of employer-provided executive health examination programs and the associated employment tax withholding and reporting requirements.
On March 1, 2019, New Jersey governor Phil Murphy signed Senate Bill No. 1567 (S1567) into law, making New Jersey the first state to require certain employers to provide pretax transportation fringe benefits to employees.
In a technical advice memorandum (TAM 201903017) released on January 18, 2019, the Internal Revenue Service (IRS) provided guidance on whether employer-provided meals and snacks are includable in employee income and subject to employment tax. The memorandum, which cites a number of IRS rulings on this topic, serves as a forewarning to employers of the limitations of providing free meals to employees.
The Tax Cuts and Jobs Act of 2017 (TCJA) eliminated the deduction for entertainment purchased as a business expense but left intact the deduction for business meals. Because entertainment and meals are often closely intertwined when purchased in a business context, taxpayers may have difficulty distinguishing deductible meal expenses from nondeductible entertainment expenses.
The Tax Cuts and Jobs Act of 2017 (TCJA) generally eliminated employer deductions for expenses incurred to provide employee parking benefits but left intact deductions for expenses associated with parking provided for customers and the general public. Because nondeductible employee parking expenses are often closely intertwined with deductible general public or customer parking expenses, employers may have difficulty distinguishing between the two under the TCJA.
When the Internal Revenue Service (IRS) determines during an examination that a fringe benefit should have been taxed and the employer accordingly has to pay additional taxes in a later year, how is the subsequent payment treated for tax purposes?
The Internal Revenue Service (IRS) recently clarified its position on two fringe benefits provided to employees on global assignments: tax equalization services and tax return preparation services. Memorandum Number 201810007 from the IRS’s Office of Chief Counsel (OCC), released on March 9, 2018, concerned a large American company employing thousands of employees globally.
On October 30, 2017, Governor Tom Wolf of Pennsylvania signed into law Act 43 of 2017. This new law provides that beginning July 1, 2018, Pennsylvania businesses that pay at least $5,000 in Pennsylvania-source nonemployee compensation or business income to a nonresident individual (or disregarded entity that has a nonresident member) are required to withhold from such payments the current applicable income tax rate (currently 3.07 percent).
The enactment of the Tax Cuts and Jobs Act (TCJA) on December 22, 2017, brought about the most sweeping overhaul of the Internal Revenue Code (IRC) since 1986. Most of the changes took effect on January 1, 2018. This article covers the TCJA’s impact on employer-provided fringe benefits and offers insights, based on conversations with employers across the country, on how the changes may influence employers’ fringe benefit offerings in the years to come.