Accelerating Incentive Pay From 2013 to 2012 — Executive Compensation Planning for the Fiscal Cliff
Because of the pending fiscal cliff and the possibility of higher tax rates coming in 2013, we have been asked if private company employers should accelerate payments of incentive compensation into 2012, rather than pay them in 2013. This strategy may sound tempting to executives given all of the headlines of the fiscal cliff and potentially higher tax rates on high-wage earners. Still, a lot can happen between now and December 31st.
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Code Section 162(m) Guidance Issued Regarding Deductibility of Dividends and Dividend Equivalents in Equity Awards
The IRS recently issued an important ruling on whether dividends and dividend equivalents related to restricted stock and restricted stock units (“RSUs”) can be treated as performance-based compensation for purposes of Code Section 162(m).
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$2,500 FSA Limits: Employers with Non-Calendar Year Plans Can Breathe a Sigh of Relief
In a recent blog, we discussed the need for employers with non-calendar year health FSAs to act now to implement the new $2,500 FSA limits imposed under health care reform. Thankfully, recent IRS guidance eliminates these concerns.
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Implementing $2,500 FSA Limits for Non-Calendar Year Plans – Start Now
Beginning January 1, 2013, the Patient Protection and Affordable Care Act (“PPACA”) requires plan sponsors to limit pre-tax health flexible spending account (“FSA”) contributions to no more than $2,500 per calendar year. There are currently no limits on health FSA contributions. This change is anticipated to be a revenue-raiser, because the new limit is lower than most existing plan-imposed pre-tax FSA contribution limits, and affected employees will pay taxes on more of their salary.
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Senate Gives Public Transportation A Boost
Yesterday’s action in the United States Senate would restore parity under federal tax law treatment for fringe benefits designed to encourage the use of public transportation by employees. Under Section 132(f) of the Internal Revenue Code (the “Code”), employer-provided qualified transportation fringe benefits (“QTFs”) that do not exceed specified monthly excludable limits are exempt from …
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Hiring Unpaid Summer Interns? Keep These Important Tips In Mind
On our sister blog – Employer Law Report – Leigh Anne Benedic discusses important considerations for employers who are considering hiring unpaid summer interns.
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Annual Bonuses for 2011 Paid in 2012: Tax Planning Opportunities for Employers
Are you able to accrue and deduct annual bonuses for a 2011 performance period in 2011, despite the fact that an employee is required to be employed through the payment date in 2012 in order to receive the bonus? A few years ago, the IRS issued guidance that strongly suggested the answer was no, the deduction could not be taken in 2011.
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New York’s Same Sex Marriage Law Has Broad Implications for Employee Benefit Plans
In a recent blog, we discussed a case that challenges the constitutionality of the Defense of Marriage Act (“DOMA”), which defines marriage for federal law purposes as a legal union between a man and a woman. DOMA was enacted during the administration of President Bill Clinton. Presuming DOMA is deemed constitutional by the courts and is not repealed by Congress (a possibility that appears remote at this point in time), employers theoretically could comply with federal employee benefits laws contained in ERISA by adopting (or maintaining) the DOMA definition of spouse.
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IRS Rings Up Cell Phone Tax Guidance
In an attempt up clear up confusion about the tax treatment of employer–provided cell phones, the Internal Revenue Service (the “IRS”) has issued Notice 2011‐72. The Notice was issued on September 14, 2011, and the tax exclusion rules described below are effective for all cell phone usage after December 31, 2009. This new guidance likely will be appreciated both for the resulting clarity (or at least increased clarity) and for the position taken by the IRS. Note that the guidance in the Notice is limited expressly to cell phones.
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