This insightful Guide provides clear explanation, analysis, and advice that can be used to quickly evaluate fringe benefit alternatives, ensure compliance with IRS rules and regulations, and avoid costly mistakes.
The Guide includes time-saving checklists, worksheets, charts, client letters, sample plan documents, practical examples, and planning tips and cautions that help clearly illustrate the materials discussed.
PPC's Guide to Compensation and Benefits provides the tools needed to structure optimal compensation and fringe benefit plans. It will help you understand the popular types of compensation and benefits many companies are currently offering and their tax implications. It explains the rules and regulations for providing dependent care, educational assistance, adoption assistance, life insurance, long-term care insurance, health plans (including information on health care reform), and disability income plans to employees.
The Guide can be used to help your clients stay competitive by designing compensation plans that motivate key executives, including nonqualified deferred compensation and stock option plans. It also discusses travel and entertainment expense reimbursement rules, including the proper treatment of company-provided automobiles, computers, and cell phones used for personal purposes; covers the rules for establishing, operating, amending, and terminating all types of fringe benefit and cafeteria plans; and addresses questions regarding health plan requirements including COBRA and HIPAA.
Other features that make it a Must Have include:
- American Taxpayer Relief Act of 2012. The American Taxpayer Relief Act of 2012 (ATRA) permanently increased the tax rates on ordinary income and dividends for higher-income individuals and extended many fringe benefit provisions that were set to expire at the end of 2012. Discussions throughout the most recent edition of the Guide have been updated to reflect changes made by ATRA.
- Additional 0.9% Medicare Tax. Beginning with wages paid in 2013, employers are responsible for withholding an additional 0.9% Medicare tax from the wages paid to certain higher-income employees. How this new withholding responsibility affects different types of compensation and fringe benefits are discussed throughout the 2013 edition of this Guide.
- Cafeteria Plan Rules. Beginning in late 2013, individuals will be able to purchase health insurance coverage that is effective in January 2014, through a state exchange (i.e., marketplace). Employees participating in a 2013 fiscal year employer-sponsored health plan must be allowed to make changes in their health coverage that is effective as early as January 2014. The IRS has provided a transition rule that allows employers to amend a 2013 fiscal year cafeteria plan with regard to certain cafeteria plan election rules so that employees who want to change their health insurance coverage can do so without tax consequences. A discussion on the transition rule is in the latest edition of the Guide.
- Section 274 Proposed Regulations. The most recent update includes a discussion on new proposed regulations that clarify how the 50% meals and entertainment deduction limitation applies when a third-party payer is involved.
- Health Care Changes. The IRS has issued proposed regulations regarding the employer mandate that requires certain large employers to offer affordable health insurance benefits to full-time employees (and their dependents). These regulations are covered in the current edition.
- Section 83(b) Election. The most recent edition includes a discussion on Section 83 proposed regulations and other guidance that clarifies when stock is subject to a substantial risk of forfeiture and provides a sample election statement.
- Hurricane Sandy Relief. The current edition has a discussion on a relief measure that allows an employer to make a tax-deductible cash contribution to a qualified tax-exempt organization providing relief to Hurricane Sandy victims for the value of vacation, sick, or personal leave that employees elect not to use.
- Transit Benefit Parity. The ATRA retroactively extended the provision that allows the monthly exclusion for commuter transportation and transit passes to be the same as the monthly exclusion for parking expenses. The most recent edition has information on what actions employers must take to apply this retroactive benefit.