IRS Archives - EMPLOYEE BENEFITS BLOG

IRS Releases 2026 Limits for HSAs and Excepted Benefit HRAs

by Evan Walters, Samuel Hamer, Edward Froelich, Michael Scarduzio and Matthew J. Blaney | Jun 10, 2025 | Employee Benefits, Health and Welfare Plans

On May 19, 2025, the Internal Revenue Service (IRS) released Internal Revenue Bulletin 2025-21. It includes Revenue Procedure 2025-19, which provides the 2026 inflation-adjusted amounts for health savings accounts (HSAs) as determined under Code § 223, as well as the maximum amount that may be made newly available for excepted benefit health reimbursement arrangements (HRAs) under Code § 54.9831-1(c)(3)(viii). Revenue Procedure 2025-19 is effective for HSAs for the 2026 calendar year and for excepted benefit HRAs beginning in 2026.

Learn more about other new IRS guidance in this Weekly IRS Roundup published by McDermott’s Tax Group.

“Big, Beautiful Bill”: Federal Tax Bill Would Restrict the Employee Retention Credit

by Shawn O’Brien, Samuel Hamer and Michael Scarduzio | May 27, 2025 | Employee Benefits, Fiduciary and Investment Issues

A new federal tax bill under consideration in the US House of Representatives proposes major changes to the Employee Retention Credit (ERC), including disallowing claims made after January 31, 2024 – even if they were filed before the official deadlines in April 2024 and 2025. It would also extend the Internal Revenue Service’s statute of limitations for assessing ERC-related amounts to six years, raising uncertainty for taxpayers with pending or previously approved claims.

Read more here.

The Employee Retention Credit: IRS’s “Risking” Model Faces Legal Challenge

by Shawn O’Brien, Samuel Hamer and Michael Scarduzio | Apr 30, 2025 | Employee Benefits

In April 2025, the US District Court for the District of Arizona rejected a motion for a preliminary injunction filed by two tax preparation companies. These firms aimed to stop the Internal Revenue Service from using an automated “risk assessment model” to evaluate and reject Employee Retention Credit (ERC) claims, seeking to reinstate individualized reviews of ERC claims.

Read more here.

The Employee Retention Credit: How to Litigate and Resolve Claims

by Shawn O’Brien, Samuel Hamer and Michael Scarduzio | Apr 10, 2025 | Employee Benefits, Employment

The Employee Retention Credit (ERC), introduced under the Coronavirus Aid, Relief, and Economic Security Act in March 2020, was designed to help employers retain employees during the COVID-19 pandemic by offering a refundable tax credit against certain employment taxes. However, the processing and payment of ERC claims have faced significant delays, with many claims remaining unprocessed or disallowed by the Internal Revenue Service (IRS).

In this Bloomberg Tax article, Shawn O’Brien, Samuel Hamer, and Michael Scarduzio summarize each ERC stage and outline a taxpayer’s path to payment by stage.

Access the article.

New Rules Simplify ACA Employer Shared Responsibility Reporting Obligations

by Jacob Mattinson, Sarah Raaii and Alden Bianchi | Jan 21, 2025 | Employee Benefits, Health and Welfare Plans

Two recently passed laws have modified the provisions of the Affordable Care Act (ACA) that require employers and insurers to prepare tax forms showing offers of health coverage, streamlining the compliance and reporting process.

Under the ACA’s employer shared responsibility provisions, applicable large employers must either offer qualifying health coverage to full-time employees (and their dependents), or they may face significant excise taxes. Employers may also face penalties if they fail to report, or make mistakes in reporting, the offered coverage. These new rules will ease the reporting burdens on employers seeking to prove that they follow these complex and demanding requirements.

Read more here.

How Employers Can Aid Employees Impacted by the LA Wildfires

by Brian Tiemann and Jennifer Hill | Jan 16, 2025 | Employee Benefits, Employment

Over the past two weeks, wildfires have caused substantial loss and damage to homes and communities in Los Angeles, California, and the surrounding areas. In the wake of such devastation, employers may seek opportunities to provide financial assistance to impacted employees. Fortunately, the Internal Revenue Service (IRS) has outlined various ways for employers to provide much-needed assistance to employees impacted by natural disasters like the wildfires, including tax-free qualified disaster relief payments, leave donation programs, and other tax-efficient options.

Read more here.

IRS Issues Proposed Regulations to Ensure Expanded Preventative Care Services Coverage

by Kevin Spencer, Evan Walters and Sama Kaseer | Dec 3, 2024 | Employee Benefits, Health and Welfare Plans

On November 18, 2024, the Internal Revenue Service (IRS) released Internal Revenue Bulletin 2024-47, which includes proposed regulations designed to ensure that non-grandfathered group health plans and insurance issuers provide an accessible exceptions process for preventive services, allowing coverage without cost sharing if deemed medically necessary by an individual’s provider.

Learn more about new IRS guidance in the latest Weekly IRS Roundup published by McDermott’s Tax Group.

IRS Releases Regulatory Notices Related to Health Plan Coverage of Contraceptives

by Kevin Spencer, Evan Walters and Sama Kaseer | Nov 12, 2024 | Employee Benefits, Health and Welfare Plans

The Internal Revenue Service (IRS) recently released Internal Revenue Bulletin 2024-44. The Bulletin includes Notice 2024-71, which provides a safe harbor under Internal Revenue Code § 213(d), treating amounts paid for condoms as medical care expenses eligible for reimbursement under various health plans. It also includes Notice 2024-75, which expands the list of preventive care benefits that high-deductible health plans can provide without a deductible or with a lower deductible, including benefits for over-the-counter oral contraceptives and condoms.

IRS Issues New Long-Term, Part-Time Employee Guidance Under the SECURE 2.0 Act for 403(b) Plans

by Kevin Spencer, Evan Walters and Sama Kaseer | Nov 7, 2024 | Employee Benefits, Retirement Plans

On October 3, 2024, the Internal Revenue Service (IRS) released Notice 2024-73, which provides guidance on the application of nondiscrimination rules under Internal Revenue Code § 403(b) for long-term, part-time employees. The notice also announces that the final regulations, which the IRS will issue for 401(k) plans on long-term, part-time employees, will apply to plan years beginning on or after January 1, 2026.

Government Announces 2025 Employee Benefit Plan Limits

by Jeffrey Holdvogt, Jacob Mattinson and Brian Tiemann | Nov 5, 2024 | Employee Benefits, Health and Welfare Plans, Retirement Plans

The Internal Revenue Service (IRS) has announced the cost-of-living adjustments to the applicable dollar limits for various employer-sponsored retirement and welfare plans for 2025. Most of the dollar limits that are subject to adjustment for cost-of-living increases will increase for 2025. The Social Security Administration released separate adjustment amounts.

See the amounts here.

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