The American Rescue Plan Act of 2021 expands upon some popular tax credit provisions and makes other changes to a key tax provision regarding compensation deduction limitations. These changes are summarized below. More
Tax law changes
Redesigned 2020 IRS Form W-4
The IRS has substantially redesigned the Form W-4 to be used beginning in 2020.
New employees first paid wages during 2020 must use the new redesigned Form W-4. In addition, employees who worked for an employer before 2020 but are rehired during 2020 also must use the redesigned 2020 Form W-4.
Continuing employees who provided…
IRS Releases Proposed Form W-4 Redesign
On Friday, May 31, 2019, the IRS released a new proposed design of the IRS Form W-4 to be used starting in 2020. The goal is to make it easier for employees to calculate accurate withholdings under the 2017 Tax Cuts and Jobs Act. Employees who already have completed a Form W-4 will not be…
A Quick Form W-4 Reminder for Employers: May 10, 2019 Deadline for Updates
The Tax Cuts and Jobs Act (the “Tax Act”) significantly changed the federal income tax rules. Several of these changes impact income tax withholding, including changes to the tax rates and brackets, increasing the standard deduction, and eliminating personal exemptions.
Normally, employees must provide their employers with an updated Form W-4 within 10 days of…
Interim IRS Guidance Addressing Taxation Impact of Transportation and Parking Fringe Benefits Creates Planning Opportunities for Employers
In Notice 2018-99, the Internal Revenue Service sets forth interim guidance for taxpayers to determine parking expenses for qualified transportation fringes (QTFs) that are nondeductible and for tax-exempt organizations to determine the increase in unrelated business taxable income (UBTI) attributable to nondeductible parking expenses. The Tax Cuts and Jobs Act (Act) amended these tax…
IRS Proposed Regulations Implementing Changes To Hardship Distribution Rules
Earlier this year we reported on legislative changes that modified the requirements related to hardship distributions from 401(k) plans. Recently, the IRS issued proposed regulations that if finalized will implement those changes.
Background
The Internal Revenue Code (the “Code”) and associated regulations generally place restrictions on participants’ ability to withdraw their elective deferrals from 401(k)…
Excessive Executive Compensation and the Tax Cuts and Jobs Act of 2017: Widening the Net of Negative Tax Consequences for For-Profit and Non-Profit Corporations
With all the national press coverage about tax savings, tax cuts and company bonus payments associated with the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), it is easy to miss the changes in federal tax laws that impose substantial negative tax consequences on employers that pay certain executives an amount of compensation…
DEDUCTIONS AND W-4S: EARLY 2018 RESPONSES TO TAX REFORM
The Tax Cuts and Jobs Act signed into law on December 22, 2017 is prompting some prudent early tax 2018 actions by both employers and employees related to employee benefits. Many employers are electing to make additional employer qualified plan contributions for the 2017 tax year when the employer’s tax rate may be higher and…
Major Changes to Executive Compensation Tax Rules Loom
On December 2, 2017, the U.S. Senate passed its version of the Tax Cuts and Jobs Act, which follows a prior passage on November 16, 2017, of a House version of the tax bill. The bills must now be reconciled by a joint committee of House and Senate members, but both bills would make significant …
The Proposed Tax Cuts and Jobs Act Would Make Sweeping Changes to Executive Compensation and Employee Benefits
On November 2, 2017, the U.S. House of Representatives unveiled the Tax Cuts and Jobs Act (H.R. 1) (the “Bill”) as part of proposed tax reform legislation. The Bill is sweeping in scope and provides for significant changes to the U.S. Internal Revenue Code (the “Code”), including in the area of executive compensation and employee…