After passing the American Tax Payer Relief Act at the beginning of 2013, the US Congress and IRS have been working on changes and new legislation that will affect employee benefits.
One of the more positive results is the renewal of permanent education benefits. This is especially important for employers who provide educational opportunities for their employees such as certifications and higher degrees. Educating current employees is most often a great benefit to the company as well as the employee. Employers may provide up to $5,250 each year, tax free to provide undergraduate and graduate fees to their employees and will remain permanent.
Other moves include higher mass transit benefits, Roth 401(k) options and health reform.
A new law will increase employee maximum pretax contributions to mass transit from $125 per month to $240 per month, however this will only last until then end of the year. 12/31/13. For those employees willing to deal with administration issues, this provision can be put into action retroactively to January 1st of 2012.
Companies that offer Roth 401(k)’s and traditional 401(k) programs may now allow their workers to convert their balances to a Roth 401(k) at any time.
In health care reform news, the IRS, released regulations that will be in effect 2014 for companies with 50 or more full time employees that requires employers to pay $2,000 per worker if they fail to offer health insurance at their company or $3,000 per worker if they offer unaffordable health care services.
Kevin E. Thompson, CPA
1014 S. Pacific Coast Hwy. #105, Redondo Beach, CA 90277
310-792-0819 (Fax) 310-872-5647
2601 Ocean Park Blvd. #310, Santa Monica, CA 90405
310-450-4625 (Fax) 310-450-6787