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","breadcrumb":[{"name":"Life Health","uri":"/life-health/"},{"name":"Life Insurance","uri":"/life-health/life-insurance/"}]},{"publication":"ThinkAdvisor","baseDomain":"www.thinkadvisor.com","presentedBy":"","uri":"/2025/07/09/15-best-value-private-colleges-and-universities-2025/","title":"15 Best Value Private Colleges and Universities: 2025","byline":"Michael S. Fischer","kicker":"Slideshow","timeToRead":"1 minute","authors":[{"name":"Michael S. Fischer","webUrl":"/author/profile/michael-s-fischer/"}],"kickerNode":[{"uri":"/slideshow/","sectionName":"Slideshow"}],"categories":[],"allCategories":[{"channelName":"Kicker","sectionName":"Slideshow","slug":"slideshow-kicker","channelUri":""},{"channelName":"Financial Planning|College Planning","sectionName":"","slug":"financial-planning-college-planning","channelUri":""},{"channelName":"Financial Planning|College Planning","sectionName":"529 Plans","slug":"529-plans","channelUri":"financial-planningcollege-planning"}],"prettyDate":"July 09, 2025","pubDate":"2025-07-09 12:15:40.000","prettyModifiedDate":"July 09, 2025 at 11:15 AM","readtime":"1","primaryCategory":{"channelName":"Financial Planning|College Planning","sectionName":"","uri":"/financial-planning/college-planning/"},"image":{"uri":"https://images.thinkadvisor.com/contrib/content/uploads/sites/415/2021/12/11_College_Cap_Money_Shutter_640x640.jpeg","width":"640","height":"640"},"summary":"The Princeton Review analyzed data on academics, costs, financial aid, student debt and graduates' salaries.","breadcrumb":[{"name":"Financial Planning","uri":"/financial-planning/"},{"name":"College Planning","uri":"/financial-planning/college-planning/"}]}]},"articleData":null,"articlePackages":null,"recentData":{"name":"Recently Updated Q&As","tieredName":["Recently Updated Q&As"],"description":"","page":1,"estimate":85,"h1":"","metaTitle":"","metaDescription":"","pageSize":10,"contents":[{"publication":"Tax Facts","baseDomain":"www.thinkadvisor.com/tax-facts","presentedBy":"","uri":"/tax-facts/2025/04/08/8828-what-is-a-high-deductible-health-plan-for-purposes-of-an-hsa/","title":"8828 / What is a high deductible health plan for purposes of an HSA?","byline":"","kicker":"","timeToRead":"11 minute","authors":[{"name":"jonathanneerman","webUrl":"/author/profile/-/"}],"kickerNode":[],"categories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"allCategories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"prettyDate":"April 08, 2025","pubDate":"2025-04-08 07:53:58","prettyModifiedDate":"July 07, 2025 at 03:51 PM","readtime":"11","primaryCategory":{"channelName":"","sectionName":"","uri":""},"image":{"uri":"","width":"","height":""},"summary":"<div class=\"Section1\"> \n \nEditor’s Note: In response to the COVID-19 pandemic, the CARES Act allowed HDHPs to cover the cost of telehealth services without cost to participants before the HDHP deductible is satisfied. HDHPs providing telehealth coverage do not jeopardize their status as HDHPs. Plan members similarly retained the right to fund HSAs after taking advantage of cost-free telehealth services. The Consolidated Appropriations Act of 2022 (CAA 2022) extended the CARES Act relief so that HDHPs could provide first-dollar telehealth services from April 2022 through December 2022 (regardless of the plan year) without jeopardizing HDHP status. The remote services did not have to be related to COVID-19 or preventative in nature to qualify. Plans and participants should note that if the HDHP is a calendar year plan, the usual rules regarding the plan deductible applied between January 2022 and March 2022. The 2023 year-end omnibus spending bill extended this relief again, although it should be noted that instead of beginning on January 1, 2023, the relief is effective for plan years beginning after December 31, 2022 and before January 1, 2025 (that means a gap existed for non-calendar year plans from January 1, 2023 until the date that the plan year began). The ability to provide pre-deductible remote health services is optional for employers. At the last minute, a provision that would have extended telehealth coverage was stripped from the 2025 American Relief Act that was signed into law late in December of 2024. As a result, as of January 1, 2025 HDHPs are no longer permitted to reimburse telehealth and remote healthcare services on a pre-deductible basis to participants with health savings accounts (HSAs). Note that extending HDHP-related telehealth flexibilities was not included in the Continuing Resolution passed in March of 2025. \n \nIn Notice 2023-37, the IRS confirmed that that the special rules allowing pre-deductible coverage of COVID-related testing and treatment will end as of December 31, 2024. The guidance also states that the preventive care safe harbor does not include COVID-19 testing as of July 24, 2023. \n \nUnder the Inflation Reduction Act, HDHPs will be permitted to cover insulin prior to the participant satisfying the plan deductible effective for tax years beginning after December 31, 2022. This insulin coverage will not adversely affect a participant’s eligibility to contribute to an HSA. Going forward, HDHPs will be permitted to cover selected insulin products before the deductible is satisfied regardless of whether the participant has been diagnosed with diabetes. “Selected insulin products” is defined to include any dosage form, including vials, pumps, or inhalers of any type of insulin. \n \nThe requirements for a high deductible health plan (HDHP) differ depending on whether individual or family coverage is provided. In this context, family coverage includes any coverage other than self-only coverage.<a href=\"#_ftn1\" name=\"_ftnref1\">1</a> \n \nFor 2026, an HDHP is a plan with an annual deductible of not less than $1,700 for self-only coverage ($1,650 in 2025). The family coverage deductible limit is $3,400 in 2026 ($3,300 in 2025). Annual out-of-pocket expenses for an HDHP cannot exceed $8,500 in 2026 ($8,300 in 2025) for self-only coverage. For family coverage, the annual out-of-pocket expense limitation is increased to $17,000 in 2026 ($16,600 in 2025).<a href=\"#_ftn2\" name=\"_ftnref2\">2</a> These annual deductible amounts and out-of-pocket expense amounts are adjusted annually for cost of living.<a href=\"#_ftn3\" name=\"_ftnref3\">3</a> Increases are made in multiples of $50. \n \nDeductible limits for HDHPs are based on a 12-month period. If a plan deductible may be satisfied over a period longer than twelve months, the minimum annual deductible under IRC Section 223(c)(2)(A) must be increased on a pro-rata basis to take the longer period into account.<a href=\"#_ftn4\" name=\"_ftnref4\">4</a> \n \nAn HDHP may impose a reasonable lifetime limit on benefits provided under the plan as long as the lifetime limit on benefits is not designed to circumvent the maximum annual out-of-pocket limitation.<a href=\"#_ftn5\" name=\"_ftnref5\">5</a> A plan with no limitation on out-of-pocket expenses, either by design or by its express terms, does not qualify as a high deductible health plan.<a href=\"#_ftn6\" name=\"_ftnref6\">6</a> Beginning in 2016, the CMS has provided guidance stating that the self-only limitation applies to each individual, regardless of whether the individual is enrolled in self-only or family coverage. This is the case even if the limitation for self-only coverage is below the family deductible limit. Family coverage can continue to be offered as long as the self-only limitation is applied separately to each individual under the plan.<a href=\"#_ftn7\" name=\"_ftnref7\">7</a> \n \nAn HDHP may provide preventive care coverage without application of the annual deductible.<a href=\"#_ftn8\" name=\"_ftnref8\">8</a> The IRS has provided guidance and safe harbor guidelines on what constitutes preventive care. Pursuant to the IRS safe harbor, preventive care includes, but is not limited to, periodic check-ups, routine prenatal and well-child care, immunizations, tobacco cessation programs, obesity weight-loss programs, and various health screening services. Preventive care may include drugs or medications taken to prevent the occurrence or reoccurrence of a disease that is not currently present.<a href=\"#_ftn9\" name=\"_ftnref9\">9</a> \n \n<hr /> \n \nPlanning Point: In 2020, the IRS announced that high deductible health plans can cover costs associated with COVID-19. HDHPs can cover coronavirus-related testing and equipment needed to treat the virus. Generally, HDHPs are prohibited from covering certain non-specified expenses before the covered individual’s deductible has been met. Certain preventative care expenses are excepted from this rule. HDHPs will not jeopardize their status if they pay coronavirus-related expenses before the insured has met the deductible, and the insured will remain HSA-eligible. The guidance applies only to HSA-eligible HDHPs. Participants in HDHPs should pay attention to IRS guidance in specific future situations.<a href=\"#_ftn10\" name=\"_ftnref10\">10</a> \n \n<hr /> \n \nNotice 2013-57 clarifies that a health plan will not fail to qualify as an HDHP merely because it provides preventative services under the ACA without requiring a deductible.<a href=\"#_ftn11\" name=\"_ftnref11\">11</a> \n \nFor months before January 1, 2006, a health plan would not fail to qualify as an HDHP solely based upon its compliance with state health insurance laws that mandate coverage without regard to a deductible or before the high deductible is satisfied.<a href=\"#_ftn12\" name=\"_ftnref12\">12</a> This transition relief only applied to disqualifying benefits mandated by state laws that were in effect on January 1, 2004. This relief extended to non-calendar year health plans with benefit periods of twelve months or less that began before January 1, 2006.<a href=\"#_ftn13\" name=\"_ftnref13\">13</a> \n \nOut-of-pocket expenses include deductibles, co-payments, and other amounts that a participant must pay for covered benefits. Premiums are not considered out-of-pocket expenses.<a href=\"#_ftn14\" name=\"_ftnref14\">14</a> \n \n</div> \n<div class=\"refs\"> \n \n<hr align=\"left\" size=\"1\" width=\"33%\" /> \n \n<a href=\"#_ftnref1\" name=\"_ftn1\">1</a>. IRC § 223(c)(5). \n \n<a href=\"#_ftnref2\" name=\"_ftn2\">2</a>. Rev. Proc. 2024-25, Rev. Proc. 2025-19. \n \n<a href=\"#_ftnref3\" name=\"_ftn3\">3</a>. IRC § 223(g). \n \n<a href=\"#_ftnref4\" name=\"_ftn4\">4</a>. Notice 2004-50, 2004-2 CB 196, A-24. \n \n<a href=\"#_ftnref5\" name=\"_ftn5\">5</a>. Notice 2004-50, 2004-2 CB 196, A-14. \n \n<a href=\"#_ftnref6\" name=\"_ftn6\">6</a>. Notice 2004-50, 2004-2 CB 196, A-17. \n \n<a href=\"#_ftnref7\" name=\"_ftn7\">7</a>. See DOL FAQ, available at www.dol.gov/ebsa/faqs/faq-aca27.html. \n \n<a href=\"#_ftnref8\" name=\"_ftn8\">8</a>. IRC § 223(c)(2)(C). \n \n<a href=\"#_ftnref9\" name=\"_ftn9\">9</a>. Notice 2004-50, 2004-2 CB 196, A-27; Notice 2004-23, 2004-1 CB 725. \n \n<a href=\"#_ftnref10\" name=\"_ftn10\">10</a>. Notice 2020-15. \n \n<a href=\"#_ftnref11\" name=\"_ftn11\">11</a>. 2013 IRB LEXIS 465. \n \n<a href=\"#_ftnref12\" name=\"_ftn12\">12</a>. Notice 2004-43, 2004-2 CB 10 \n \n<a href=\"#_ftnref13\" name=\"_ftn13\">13</a>. Notice 2005-83, 2005-2 CB 1075. \n \n<a href=\"#_ftnref14\" name=\"_ftn14\">14</a>. Notice 2004-2, 2004-1 CB 269, A-3; Notice 96-53, 1996-2 CB 219, A-4. \n \n</div>","breadcrumb":[]},{"publication":"Tax Facts","baseDomain":"www.thinkadvisor.com/tax-facts","presentedBy":"","uri":"/tax-facts/2025/04/08/3640-remote-workers-eligible-for-leave-under-the-family-and-medical-leave-act-fmla/","title":"3640.03 / Are remote workers eligible for leave under the Family and Medical Leave Act (FMLA)?","byline":"John Manganaro","kicker":"","timeToRead":"11 minute","authors":[{"name":"John Manganaro","webUrl":"/author/profile/john-manganaro/"}],"kickerNode":[],"categories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"allCategories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"prettyDate":"April 08, 2025","pubDate":"2025-04-08 08:20:36","prettyModifiedDate":"February 17, 2025 at 01:29 PM","readtime":"11","primaryCategory":{"channelName":"","sectionName":"","uri":""},"image":{"uri":"https://images.thinkadvisor.com/contrib/content/uploads/sites/415/2021/12/Curtis_Scott_Raymond-James_640x640.jpg","width":"640","height":"640"},"summary":"Editor’s Note: The DOL has released a bulletin clarifying its position on employer obligations when determining whether a remote employee is eligible for FMLA leave. Employers must generally provide FMLA leave if they employ at least 50 employees within a 75-mile radius. When employees work from home, the worksite for FMLA eligibility purposes is the office to which they report or from which their assignments are generated. So, if at least 50 employees (including remote workers) are employed within 75 miles of the office to which the employee reports or from which assignments are generated, the remote employee is eligible for FMLA leave (even if no other employees are employed within 75 miles of the employee’s remote office). \n \nThe Family Medical Leave Act (FMLA) is a federal law that gives covered employees the right to 12 weeks of unpaid leave each year for any covered reason. While it may seem that employees who are not required to report to a physical location would be less likely to need time off to handle family and medical issues, the reality is that many are equally unable to work while a covered reason is ongoing. Employers with remote workers should be aware that they may be required to grant an employee’s request for unpaid time off even if the employee does not report to a physical worksite. \n \nCovered reasons under the FMLA include: \n<ul> \n \t<li>For the birth and care of the newborn child of an employee,</li> \n \t<li>For placement with the employee of a child for adoption or foster care,</li> \n \t<li>To care for an immediate family member (spouse, child, or parent) with a serious health condition, or</li> \n \t<li>For medical leave if the employee is unable to work because of a serious health condition.</li> \n</ul> \nPlanning Point: Note that the Sixth Circuit<a href=\"#_ftn2\" name=\"_ftnref2\">2</a> has ruled that employers may be required to grant FMLA leave when an employee must care for an adult sibling. The issue to consider is whether an \"in loco parentis\" relationship exists between the two parties. Factors listed by the Sixth Circuit as relevant to the determination include whether the person (1) is in close physical proximity to the adult, (2) assumes responsibility for supporting the adult, (3) exercises control over the adult or has rights over them and (4) shares a close emotional or familial bond (similar to that of an adult child). While the case is limited to the Sixth Circuit, it makes clear that employers should carefully consider the facts before denying a request for FMLA leave. \n \nNot all employees are eligible for unpaid FLMA leave and not all employers are subject to the law. Employees are eligible for FMLA leave if they: \n<ul> \n \t<li>Have worked for their employer at least 12 months,</li> \n \t<li>Have worked at least 1,250 hours over the 12 months preceding the request for FMLA leave, and</li> \n \t<li>Work at a location where the company employs 50 or more employees within a 75-miles radius.<a href=\"#_ftn2\" name=\"_ftnref2\">3</a></li> \n</ul> \nThis law may create unanticipated complications for employers who permit employees to work on a remote basis. In some cases, remote workers report to an office that is in their same geographic location. However, it is becoming more common for workers to report to managers and supervisors who are also working remotely from different locations. \n \nWhen a remote employee requests FMLA leave, questions involving whether the employee is entitled to the FMLA leave often arise. The issue in these cases is whether the employer has at least 50 employees within a 75-mile radius of the remote employee’s workplace. \n \n<hr /> \n \nPlanning Point: Employers who continue to permit remote work should be aware that existing and evolving state and local paid leave laws may apply. For example, Illinois has enacted a new paid bereavement act that became effective January 1, 2023. Under the law, the same requirements that apply in determining FMLA eligibility apply. An employee is eligible to take leave if the employee has worked for a covered employer for at least 1,250 hours within the previous 12 months, and also works at a location where the employer has 50 or more employees within a 75-mile radius.<a href=\"#_ftn3\" name=\"_ftnref3\">4</a> \n \nThe Healthy Delaware Families Act provides up to 12 weeks of paid family and medical leave beginning in 2026 (employers will be required to begin implementing payroll deductions as of January 1, 2025). The law is similar to the federal FMLA, but applies to smaller employers, so that any employer with 10 or more employees who report to a Delaware worksite will be required to comply. It remains to be seen whether the law will apply to employers with ten or more employees who work remotely from Delaware.<a href=\"#_ftn4\" name=\"_ftnref4\">5</a> \n \n<hr /> \n \nA Texas court<a href=\"#_ftn5\" name=\"_ftnref5\">6</a> recently refused to grant a motion to dismiss a case where a company denied an employee’s request for FMLA leave. The company claimed they did not have 50 employees within a 75-mile radius in Texas. The employer’s headquarters was in Ohio, yet the employee was working remotely from Texas (the employee’s supervisor was also working remotely from Texas). The employee claimed that her “worksite” for FMLA purposes was Ohio, where the company was headquartered. \n \nTo have won summary judgement, the court found the company must establish that Ohio was not: \n<ul> \n \t<li>The employee’s “home base”,</li> \n \t<li>The site that assigns the employee’s work, or</li> \n \t<li>The site to which the employee reports</li> \n</ul> \nThe court found that the term “worksite” had to be a location where the employee was physically present and that it referred not to the physical base of the employer’s operations, but to the physical base of the employee. The employee in this case was never physically present in Ohio, so she could not prove Ohio was her home base. However, the court found an issue of fact with respect to where the employee’s assignments were created and originated. The court found that this location is the site from which the employee’s day-to-day instructions were provided and that there was an issue of fact as to whether the assignments originated at the Ohio headquarters. \n \nThe Texas case settled privately before the court provided a final resolution of the issues. The case does, however, point to the fact-intensive nature of the inquiry as to whether any given remote employee may be eligible for FMLA leave. Employers should be aware that is possible that they may be required to provide FMLA leave even if they do not have 50 employees within a 75-mile radius of the remote employee’s physical location. That may be the case if the employee can establish that assignments were created or originated from the employer’s central location or if the employee sends assignments to a central location where they are evaluated (i.e., if the employee’s reporting worksite is where the employer has at least 50 employees). \n<div class=\"refs\"> \n \n<hr align=\"left\" size=\"1\" width=\"33%\" /> \n \n<a href=\"#_ftnref1\" name=\"_ftn1\">1</a>. See https://www.dol.gov/sites/dolgov/files/WHD/fab/2023-1.pdf \n \n<a href=\"#_ftnref2\" name=\"_ftn2\">2</a>. Chapman v. Brentlinger Enterprises, No. 2:20-cv-05009 (Dec. 13, 2024). \n \n<a href=\"#_ftnref2\" name=\"_ftn2\">3</a>. More information on the Family and Medical Leave Act requirements can be found at <a href=\"https://www.dol.gov/agencies/whd/fmla\">https://www.dol.gov/agencies/whd/fmla</a>. \n \n<a href=\"#_ftnref3\" name=\"_ftn3\">4</a>. See Family Bereavement Leave Act (FBLA), available at <a href=\"https://www.ilga.gov/legislation/102/SB/PDF/10200SB3120lv.pdf\">https://www.ilga.gov/legislation/102/SB/PDF/10200SB3120lv.pdf</a>. \n \n<a href=\"#_ftnref4\" name=\"_ftn4\">5</a>. Available at <a href=\"https://legis.delaware.gov/json/BillDetail/GenerateHtmlDocumentEngrossment?engrossmentId=25023&docTypeId=6\">https://legis.delaware.gov/json/BillDetail/GenerateHtmlDocumentEngrossment?engrossmentId=25023&docTypeId=6</a> \n \n<a href=\"#_ftnref5\" name=\"_ftn5\">6</a>. Landgrave v. Fortec Medical, Inc., 1-20-CV-968-RP (U.S. District Ct., W.D. Austin, Tx. 2022). \n \n</div>","breadcrumb":[]},{"publication":"Tax Facts","baseDomain":"www.thinkadvisor.com/tax-facts","presentedBy":"","uri":"/tax-facts/2025/01/08/8791-is-the-value-of-employer-provided-coverage-under-accident-or-health-insurance-taxable-income-to-an-employee-when-the-coverage-is-provided-for-the-employees-spouse-children-or-dependent/","title":"8791 / Is the value of employer-provided coverage under accident or health insurance taxable income to an employee when the coverage is provided for the employee’s spouse, children or dependents?","byline":"John Manganaro","kicker":"","timeToRead":"11 minute","authors":[{"name":"John Manganaro","webUrl":"/author/profile/john-manganaro/"}],"kickerNode":[],"categories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"allCategories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"prettyDate":"January 08, 2025","pubDate":"2025-01-08 08:55:31","prettyModifiedDate":"December 30, 2024 at 01:29 PM","readtime":"11","primaryCategory":{"channelName":"","sectionName":"","uri":""},"image":{"uri":"https://images.thinkadvisor.com/contrib/content/uploads/sites/415/2021/12/Curtis_Scott_Raymond-James_640x640.jpg","width":"640","height":"640"},"summary":"<div class=\"Section1\">Employer-provided accident and health coverage for an employee and the employee’s spouse and dependents, both before and after retirement, and for the employee’s surviving spouse and dependents after the employee’s death, does not have to be included in gross income by the active or retired employee or, after the employee’s death, by the employee’s survivors.<a href=\"#_ftn1\" name=\"_ftnref1\">1</a></div> \n<div class=\"Section1\"> \n \nIn 2010, the Affordable Care Act (“ACA”), expanded the exclusion from gross income for amounts expended on medical care to include employer-provided health coverage for any adult child of the taxpayer if the adult child has not attained the age of 27 as of the end of the taxable year. The IRS has released guidance indicating that the exclusion applies regardless of whether the adult child is eligible to be claimed as a dependent for tax purposes.<a href=\"#_ftn2\" name=\"_ftnref2\">2</a> \n \n</div> \n<div class=\"refs\"> \n \n<hr align=\"left\" size=\"1\" width=\"33%\" /> \n \n<a href=\"#_ftnref1\" name=\"_ftn1\">1</a>. Rev. Rul. 82-196, 1982-2 CB 53; GCM 38917 (11-17-82). \n \n<a href=\"#_ftnref2\" name=\"_ftn2\">2</a>. IRC § 105(b), as amended by the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010. Notice 2010-38, 2010-20 IRB 682. \n \n</div>","breadcrumb":[]},{"publication":"Tax Facts","baseDomain":"www.thinkadvisor.com/tax-facts","presentedBy":"","uri":"/tax-facts/2025/01/08/3757-auto-enrollment-rules-apply-to-401k-plans-starting-in025/","title":"3757.01 / What auto-enrollment rules apply to 401(k) plans starting in 2025?","byline":"John Manganaro","kicker":"","timeToRead":"11 minute","authors":[{"name":"John Manganaro","webUrl":"/author/profile/john-manganaro/"}],"kickerNode":[],"categories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"allCategories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"prettyDate":"January 08, 2025","pubDate":"2025-01-08 08:47:26","prettyModifiedDate":"January 13, 2025 at 01:29 PM","readtime":"11","primaryCategory":{"channelName":"","sectionName":"","uri":""},"image":{"uri":"https://images.thinkadvisor.com/contrib/content/uploads/sites/415/2021/12/Curtis_Scott_Raymond-James_640x640.jpg","width":"640","height":"640"},"summary":"Starting with the 2025 tax year, the SECURE Act 2.0 requires employers that establish new 401(k) or 403(b) plans to auto-enroll employees in the savings plans. \n \nThe minimum auto-enrollment contribution rate will range from 3% to 10%. Each year, the minimum contribution rate will then increase by 1% until the rate reaches 15%. \n \nThe IRS has released proposed regs confirming that there is no delay--meaning that new plans are currently subject to the auto-enrollment rule starting in 2025. The rules contained in the proposed regulations will be effective six months after the date that final regulations are published. In the meantime, a reasonable, good faith interpretation of the law is required. \n \nThe regulations clarify that there is no provision that excludes any class of participant from auto-enrollment, meaning that long-term part-time employees must also be automatically enrolled if they are otherwise eligible and the plan is subject to the rule. Participants with an affirmative election to opt out of auto-enrollment on file do not have to be automatically enrolled in the plan. The preamble to the proposed regulations clarifies that when plans did not automatically enroll participants who were already participating in the plan, yet did not make an affirmative election, they must automatically enroll the participant by the first plan year when final regulations are effective (presumably, 2027). The participant's default deferral rate must be calculated as though they had been auto-enrolled since 2025. \n \nUnder the law, small business employers who normally employ 10 or fewer employees and new businesses are exempt from the auto-enrollment requirement. The proposed regulations clarify that self-employed individuals, independent contractors and corporate directors do not count toward the 10-employee threshold (only common law employees must be included).","breadcrumb":[]},{"publication":"Tax Facts","baseDomain":"www.thinkadvisor.com/tax-facts","presentedBy":"","uri":"/tax-facts/2025/01/08/974-are-the-penalties-for-failing-to-comply-with-the-fbar-filing-requirements/","title":"974 / What are the penalties for failing to comply with the FBAR filing requirements?","byline":"John Manganaro","kicker":"","timeToRead":"11 minute","authors":[{"name":"John Manganaro","webUrl":"/author/profile/john-manganaro/"}],"kickerNode":[],"categories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"allCategories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"prettyDate":"January 08, 2025","pubDate":"2025-01-08 08:05:39","prettyModifiedDate":"March 17, 2025 at 01:29 PM","readtime":"11","primaryCategory":{"channelName":"","sectionName":"","uri":""},"image":{"uri":"https://images.thinkadvisor.com/contrib/content/uploads/sites/415/2021/12/Curtis_Scott_Raymond-James_640x640.jpg","width":"640","height":"640"},"summary":"<div class=\"Section1\"> \n \nThe maximum civil penalty for non-willful failure to comply with FBAR reporting requirements is $10,000.<a href=\"#_ftn1\" name=\"_ftnref1\">1</a> However, additional penalties may apply for willful violations. Penalties for a willful failure to file can be as much as the greater of $100,000 or 50 percent of the amount in the account at the time of the violation.<a href=\"#_ftn2\" name=\"_ftnref2\">2</a> These penalties can be imposed for failure to file or for failure to maintain the required records (see Q <a href=\"javascript:void(0)\" class=\"accordion-cross-reference\" id=\"\"></a>). \n \nThe statute of limitations for civil or criminal violations is generally six years for FBAR purposes, meaning that the total penalties for failure to file for multiple years could be more than the value in the account. \n \nThese dollar values are adjusted annually for inflation. In 2023, the penalty for a non-willful failure to comply is $15,611 and $156,107 or 50 percent of the amount in the account at the time of violation for a willful failure to comply.<a href=\"#_ftn3\" name=\"_ftnref3\">3</a> \n \nThe Tax Court has ruled that FBAR penalties are not taxes imposed under the Internal Revenue Code, so taxpayers are not entitled to the notice and other requirements of IRC Section 6330.  The taxpayers in the case had submitted a request to the Treasury Department's Debt Management Servicing Center (DMSC) to request a Collection Due Process (CDP) hearing.<a href=\"#_ftn4\" name=\"_ftnref4\">4</a> \n \n<hr> \n \nPlanning Point: On multiple occasions, disputes have arisen over whether the $10,000 maximum penalty for non-willful FBAR filing failures is to be imposed on a per-account basis or a per-taxpayer basis. \n \n<hr> \n \nBoth the Ninth Circuit and a Texas district court previously held that the total non-willful FBAR penalties that can be imposed on an individual should be limited to $10,000 per FBAR report, rather than $10,000 per financial account.<a href=\"#_ftn4\" name=\"_ftnref4\">5</a> However, the IRS continued to attempt to assess penalties on a $10,000 per-account basis. That position was accepted in the Fifth Circuit. The U.S. Supreme Court has now clarified that non-willful FBAR penalties should be imposed on a per-report basis, rather than a per-account basis.<a href=\"#_ftn5\" name=\"_ftnref5\">6</a> \n \nThe test for willfulness is generally whether there was a voluntary, intentional violation of a known legal duty. The IRS has the burden of establishing willfulness. Willfulness is shown by the person’s knowledge of the reporting requirements and the person’s conscious choice not to comply with the requirements. In the FBAR situation, individuals should know is that they have a reporting requirement. If a person has that knowledge, the only intent needed to constitute a willful violation of the requirement is a conscious choice not to file the FBAR. \n \n<div class=\"refs\"> \n \n<hr align=\"left\" size=\"1\" width=\"33%\"> \n \n<a href=\"#_ftnref1\" name=\"_ftn1\">1</a>     31 U.S.C. 5321(a)(5)(B)(i). \n \n<a href=\"#_ftnref2\" name=\"_ftn2\">2</a>     31 U.S.C. 5321(a)(5)(C). \n \n<a href=\"#_ftnref3\" name=\"_ftn3\">3</a>     See https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar. \n \n<a href=\"#_ftnref4\" name=\"_ftn4\">4</a>      Jenner v. Commissioner of Internal Revenue, 163 T.C. No. 7 (2024). \n \n<a href=\"#_ftnref4\" name=\"_ftn4\">5</a>     See U.S. v. Boyd, 991 F.3d 1077 (9th Cir. 2021) and U.S. v. Bittner, 469 F. Supp. 3d 709 (E. D. Tex. 2020). \n \n<a href=\"#_ftnref5\" name=\"_ftn5\">6</a>     U.S. v. Bittner, No. 21–1195 (Feb. 28, 2023). \n \n</div></div> \n","breadcrumb":[]},{"publication":"Tax Facts","baseDomain":"www.thinkadvisor.com/tax-facts","presentedBy":"","uri":"/tax-facts/2025/01/08/3511-what-are-the-payment-options-that-must-be-made-available-to-employees-on-fmla-leave/","title":"3511 / What are the payment options that must be made available to employees on FMLA leave?","byline":"John Manganaro","kicker":"","timeToRead":"11 minute","authors":[{"name":"John Manganaro","webUrl":"/author/profile/john-manganaro/"}],"kickerNode":[],"categories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"allCategories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"prettyDate":"January 08, 2025","pubDate":"2025-01-08 08:35:59","prettyModifiedDate":"January 27, 2025 at 01:29 PM","readtime":"11","primaryCategory":{"channelName":"","sectionName":"","uri":""},"image":{"uri":"https://images.thinkadvisor.com/contrib/content/uploads/sites/415/2021/12/Curtis_Scott_Raymond-James_640x640.jpg","width":"640","height":"640"},"summary":"<div class=\"Section1\">Editor’s Note: The 2017 Tax Act created a new tax credit for employers that provide paid family and medical leave to employees. See Q <a href=\"javascript:void(0)\" class=\"accordion-cross-reference\" id=\"\"></a> for details.<div class=\"Section1\"> \n \nWhatever payment options are available to employees on non-FMLA leave must also be made available to employees on FMLA leave.<a href=\"#_ftn1\" name=\"_ftnref1\">1</a> Employers must continue to contribute the same share of the premium cost that they were paying prior to the FMLA leave. Employees who choose to continue health coverage during an FMLA leave must pay the same portion of the cost of such coverage that they paid while actively at work.<a href=\"#_ftn2\" name=\"_ftnref2\">2</a> Employers may choose to waive this requirement, provided that they do so on a nondiscriminatory basis. \n \nA cafeteria plan may generally offer employees on unpaid FMLA leave up to three options for paying for their health coverage under a cafeteria plan or health FSA.<a href=\"#_ftn3\" name=\"_ftnref3\">3</a> These rules do not apply where paid leave is substituted for unpaid FMLA leave, in which case the employer must offer the payment method normally available during other types of paid leave.<a href=\"#_ftn4\" name=\"_ftnref4\">4</a> \n \nAny of the three payment options discussed below may generally be made on a pre-tax salary reduction basis to the extent that the employee on FMLA leave has any taxable compensation (including the cash value of unused sick days or vacation days). A restriction applies when an employee’s FMLA leave spans two plan years. In such a case, the plan may not operate in a manner that would allow employees on FMLA leave to defer compensation from one plan year to a subsequent plan year.<a href=\"#_ftn5\" name=\"_ftnref5\">5</a> Any of the three payment options may also be made on an after-tax basis. \n \nA cafeteria plan may offer one or more of the following payment options, or a combination of these options, to an employee who continues group health plan coverage (including a health FSA) while on unpaid FMLA leave; provided that the payment options for employees on FMLA leave are offered on terms at least as favorable as those offered to employees not on FMLA leave. \n \n“Pre-pay” Option. Under this option, the employer allows the employee to pay the amounts due for the FMLA leave period prior to the commencement of FMLA leave.<a href=\"#_ftn6\" name=\"_ftnref6\">6</a> Under no circumstances may the pre-pay option be the only option offered to employees on FMLA leave. The employer may offer the pre-pay option to employees on FMLA leave even if such option is not offered to employees on other types of unpaid leave.<a href=\"#_ftn7\" name=\"_ftnref7\">7</a> \n \n“Pay-as-you-go” Option. Under this option, employees pay their portion of the health care costs according to a payment schedule. This schedule may be (1) the same as the schedule that would be in effect if they were not on FMLA leave; (2) the same schedule upon which COBRA payments would be made (see Q <a href=\"javascript:void(0)\" class=\"accordion-cross-reference\" id=\"368\">368</a>); (3) the same schedule as applies to other employees on other, unpaid non-FMLA leave; or (4) any other schedule that (a) the employee and the employer voluntarily agree upon and (b) is not inconsistent with the regulations. The employer may not offer employees on FMLA leave only the pre-pay option and the catch-up option if the pay- as-you-go option is offered to employees on unpaid non-FMLA leave.<a href=\"#_ftn8\" name=\"_ftnref8\">8</a> \n \n“Catch-up” Option. Under this option, an employer continues providing coverage during FMLA leave. The catch-up option may be the sole option offered by the employer only if it is the sole option offered to employees on unpaid non-FMLA leave.<a href=\"#_ftn9\" name=\"_ftnref9\">9</a> \n \nIn general, the employer and the employee must agree in advance that (1) coverage will continue during the FMLA leave, (2) the employer assumes responsibility for the payment of employee’s portion of the health care costs during the FMLA leave, and (3) the employee will repay such amounts when he returns from FMLA leave. \n \nPlanning Point: Many states have developed their own state-level paid family and medical leave programs (PFML programs).  That raised questions over how these programs are treated for federal and employment tax purposes.  The IRS clarified that employer contributions to state PFML programs are excluded from employees' income and not subject to FICA, FUTA or federal tax withholding.  Employer contributions are treated as after-tax contributions.  However, if the employer makes the employee's required contribution on their behalf, that contribution is included in the employee's compensation and subject to FICA, FUTA and federal tax withholding.  When employees receive benefits under state PFML programs, they are treated as compensation to the extent they are designed to replace the employee's wages (unless the amounts qualify for exclusion based on the rules governing accident and health plans, meaning that they're paid for medical reasons).  Importantly, the tax treatment of benefits will vary depending on whether they are paid for family or medical reasons.<a href=\"#_ftn10\" name=\"_ftnref10\">10</a> \n \nEmployer’s Right of Recoupment. An employer is not required to continue the coverage of an employee on FMLA leave who fails to make the required premium payments when due. But if the employer does continue coverage, the employer is entitled to recoup the missed payments under the “catch-up” option, without the employee’s prior agreement.<a href=\"#_ftn10\" name=\"_ftnref10\">11</a> \n \nHealth FSAs. Health FSAs are generally subject to the same payment rules as traditional cafeteria plans.<a href=\"#_ftn11\" name=\"_ftnref11\">12</a> The regulations do not make clear whether the employer’s right of recoupment, discussed above, applies to health FSAs. If so, it would appear to represent a significant departure from the general risk-shifting rule applicable to health FSAs. \n \n</div><div class=\"refs\"> \n \n<hr align=\"left\" size=\"1\" width=\"33%\"> \n \n<a href=\"#_ftnref1\" name=\"_ftn1\">1</a>.       Treas. Reg. § 1.125-3, A-3(b). \n \n<a href=\"#_ftnref2\" name=\"_ftn2\">2</a>.       Treas. Reg. § 1.125-3, A-2. \n \n<a href=\"#_ftnref3\" name=\"_ftn3\">3</a>.       Treas. Reg. § 1.125-3, A-3(a). \n \n<a href=\"#_ftnref4\" name=\"_ftn4\">4</a>.       Treas. Reg. § 1.125-3, A-4. \n \n<a href=\"#_ftnref5\" name=\"_ftn5\">5</a>.       Treas. Reg. § 1.125-3, A-5. \n \n<a href=\"#_ftnref6\" name=\"_ftn6\">6</a>.       Treas. Reg. § 1.125-3(a)(1)(i). \n \n<a href=\"#_ftnref7\" name=\"_ftn7\">7</a>.       Treas. Reg. § 1.125-3, A-3(b)(1). \n \n<a href=\"#_ftnref8\" name=\"_ftn8\">8</a>.       Treas. Reg. § 1.125-3, A-3. \n \n<a href=\"#_ftnref9\" name=\"_ftn9\">9</a>.       Treas. Reg. § 1.125-3, A-3. \n \n<a href=\"#_ftn10\" name=\"_ftnref10\">10</a>.      Rev. Rul. 2025-4. \n \n<a href=\"#_ftnref10\" name=\"_ftn10\">11</a>.     Treas. Reg. § 1.125-3, A-3(a). \n \n<a href=\"#_ftnref11\" name=\"_ftn11\">12</a>.     Treas. Reg. § 1.125-3, A-6(a)(1). \n \n</div></div> \n","breadcrumb":[]},{"publication":"Tax Facts","baseDomain":"www.thinkadvisor.com/tax-facts","presentedBy":"","uri":"/tax-facts/2025/01/08/3797-a-401k-plan-sponsor-distribute-a-former-participants-account-balance-without-consent-after-the-participant-separates-from-service/","title":"3797.01 / Can a 401(k) plan sponsor distribute a former participant’s account balance without consent after the participant separates from service?","byline":"John Manganaro","kicker":"","timeToRead":"11 minute","authors":[{"name":"John Manganaro","webUrl":"/author/profile/john-manganaro/"}],"kickerNode":[],"categories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"allCategories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"prettyDate":"January 08, 2025","pubDate":"2025-01-08 08:29:42","prettyModifiedDate":"February 03, 2025 at 01:29 PM","readtime":"11","primaryCategory":{"channelName":"","sectionName":"","uri":""},"image":{"uri":"https://images.thinkadvisor.com/contrib/content/uploads/sites/415/2021/12/Curtis_Scott_Raymond-James_640x640.jpg","width":"640","height":"640"},"summary":"Under SECURE 2.0, employer-sponsored plans can elect to include an automatic cash-out provision to distribute small retirement plan balances when the employee separates from service. \n \nQualified plans are not required to contain cash-out provisions that provide for immediate distribution of a participant's benefits without the participant's consent upon termination of participation if the value of the benefit is less than the statutory limit (under SECURE 2.0, $7,000 starting in 2024). Plans do have the option of adding a cash-out threshold if the threshold is not more than $7,000. If the threshold established is less than $1,000, the plan can merely cut a check for the participant's balance. \n \nIf the account balance threshold established by the employer is $1,000 or higher, the plan must automatically roll the amounts over into an IRA in the former employee's name (unless the former employee makes an affirmative election to receive the amount directly or have the amounts rolled over into another eligible retirement plan). \n \nThese transfers, known as \"auto-portability,\" involve three elements: (1) the original 401(k) plan that mandates these distributions (the \"transfer out\" plan), (2) a default IRA (in the participant's name) that receives the distributed amount as a rollover and (3) a \"transfer-in\" plan sponsored by a new employer, which receives the rollover from the default IRA (only if it is determined that the participant has a new account with a new employer). \n \nUnder the DOL’s proposed regulations, plan sponsors will be required to search recordkeepers' systems to determine whether the participant has established a new retirement account with a new employer. \n \nThe proposal would also impose regulations on any service providers associated with the auto-portability rules. While these service providers can rely on a new prohibited transaction exemption, they must also acknowledge their fiduciary status with respect to the IRA receiving the rollover distribution (in writing). Further, their fees must be reasonable and approved in writing by the employer-sponsored plan fiduciary. \n \nRelatedly, the Department of Labor has begun efforts to collect information to create the “missing participant database” mandated by the 2022 SECURE Act. As of November 2024, the DOL is requesting that plans provide the name and social security number of participants who separated from service, are owed a benefit from a plan, and are age 65 or older. They are also requesting current contact information for the plan administrator so that individuals meeting these characteristics may contact the plan administrator. The information collection completely voluntary. \n \nThe DOL has announced that a retirement plan sponsor will not violate their fiduciary responsibilities with respect to transfers of small retirement balances of missing plan participants if certain conditions are met. The plan can transfer retirement benefit payments owed to a missing participant to a state unclaimed property fund if the present value of the participant’s or beneficiary's vested benefit (including rollover contributions but excluding outstanding loan balances) does not exceed $1,000. The plan sponsor must also determine that the state unclaimed property fund is a prudent destination for the funds and that the plan itself has implemented a prudent program to locate missing participants (consistent with DOL best practices guidance) yet has still been unable to locate the participant. The transfer must be made to the unclaimed property fund in the state of the individual's last known address and the unclaimed property fund must qualify as an eligible state fund (based on DOL criteria). The plan must also include in its summary plan description disclosures of the fact that the funds will be transferred to an eligible state fund and the unclaimed property fund's name, address, and phone number for further contact.<a href=\"#_ftn9\" name=\"_ftnref9\">1</a> \n<div class=\"refs\"> \n \n<hr align=\"left\" size=\"1\" width=\"33%\" /> \n \n<a href=\"#_ftnref1\" name=\"_ftn1\">1</a>. DOL FAB 2025-1. \n \n</div>","breadcrumb":[]},{"publication":"Tax Facts","baseDomain":"www.thinkadvisor.com/tax-facts","presentedBy":"","uri":"/tax-facts/2025/01/08/445-can-participation-in-a-health-fsa-impact-an-individuals-ability-to-contribute-to-an-hsa/","title":"445 / Can participation in a health FSA impact an individual’s ability to contribute to an HSA?","byline":"John Manganaro","kicker":"","timeToRead":"11 minute","authors":[{"name":"John Manganaro","webUrl":"/author/profile/john-manganaro/"}],"kickerNode":[],"categories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"allCategories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"prettyDate":"January 08, 2025","pubDate":"2025-01-08 08:45:03","prettyModifiedDate":"January 20, 2025 at 01:29 PM","readtime":"11","primaryCategory":{"channelName":"","sectionName":"","uri":""},"image":{"uri":"https://images.thinkadvisor.com/contrib/content/uploads/sites/415/2021/12/Curtis_Scott_Raymond-James_640x640.jpg","width":"640","height":"640"},"summary":"<div class=\"Section1\">GCM 201413005 states that carrying over FSA funds from year one to year two will prevent an individual from participating in a health savings account (HSA) in year two. HSA-eligible individuals must have qualifying high-deductible health plan (HDHP) coverage and no non-HDHP coverage other than permitted insurance, coverage providing only certain types of preventive care, or coverage with a deductible that equals or exceeds the statutory minimum annual HDHP deductible (collectively, HSA-compatible coverage). Unused amounts from a general-purpose health FSA that could be carried over to an HSA-compatible health FSA may be used during the general-purpose health FSA’s run-out period to reimburse expenses covered by the general-purpose health FSA that were incurred during the previous plan year.</div> \n<div></div> \n<div>Planning Point: Note that if the FSA participant has a zero-dollar balance at the end of the FSA’s plan year, that individual may be HSA-eligible on the day following the end of the FSA plan year even if the FSA offers a grace period.</div> \n<div class=\"Section1\"> \n \nA health FSA that reimburses all qualified Section 213(d) medical expenses without other restrictions is a health plan. Consequently, an individual who is covered by a general purpose health FSA that pays or reimburses qualified medical expenses is not an eligible individual for purposes of contributing to an HSA. This disqualification includes the entire plan year, even if the health FSA has paid or reimbursed all amounts prior to the end of the plan year. To prevent this, an individual may decline or waive a health FSA carryover in order to become eligible for the HSA, at least if the FSA plan permits. \n \nA cafeteria plan may provide that if an individual participates in a general purpose health FSA that provides for a carryover of unused amounts, the individual may elect prior to the beginning of the following year to decline or waive the carryover for the following year. In that case, the individual who declines under the terms of the cafeteria plan may contribute to an HSA during the following year if the individual is otherwise eligible for the HSA. \n \nHowever, if a cafeteria plan offers an HSA-compatible (limited purpose) health FSA, (i.e., one that covers, dental, vision, preventive care, and/or pharmaceutical expenses not covered under a health insurance plan) this does not prohibit funding an HSA. Thus, individuals wishing to participate in an HSA should either not carryover any FSA funds into the next plan year or make sure carryover funds are deposited in an HSA-compatible FSA (i.e., one that provides solely incidental benefits or reimburses other medical expenses after the deductible is met). There is no requirement that the unused amounts in the general purpose health FSA only be carried over to a general purpose health FSA. However, the carryover amounts may not be carried over to a non-health FSA or another type of cafeteria plan benefit. \n \nThus, if a carryover feature is included in the general-purpose health FSA plan, an employer has three options available to preserve employees’ HSA eligibility for the following plan year: \n<blockquote>Option 1: Allow participants with a general-purpose health FSA to elect and enroll in a limited-purpose FSA — an FSA plan that is compatible with an HSA — for the following plan year. Those participants can carry over unused funds (up to the maximum limit) to a limited-purpose FSA; however, the carryover cannot be applied to another non-health FSA or another cafeteria plan benefit. \n \nOption 2: Automatically enroll participants in a limited-purpose FSA if those participants enroll in a qualifying high deductible health plan (HDHP) and have a carryover balance in a general-purpose health FSA. \n \nOption 3: Allow individuals to waive or decline a health FSA carryover prior to the beginning of the next plan year to become eligible.</blockquote> \n \n<hr /> \n \nPlanning Point: An employer may have both a general purpose health FSA and an HSA-compatible FSA. Where an employee participates in both and does not utilize all elected benefits in a year, GCM 201413005 provides an example for maximizing the benefits for the succeeding year while maintaining eligibility to participate in an HSA, as follows: \n \n<hr /> \n \n<blockquote>Example: Employer offers a calendar year general purpose health FSA and a calendar year HSA-compatible health FSA. Both FSAs provide for a carryover of up to $500 of unused amounts and do not have a grace period. Employee has an unused amount of $600 in the general purpose health FSA on December 31 of Year 1. Prior to December 31 of Year 1, Employee elects $2,500 in the HSA-compatible health FSA for Year 2 and elects to have any carryover go to the HSA-compatible health FSA. Employee also elects coverage by an HDHP for Year 2. In January of Year 2, Employee incurs and submits a claim for $2,700 in dental care covered by the HSA-compatible health FSA. The plan timely reimburses $2,500, the amount elected. In February of Year 2, Employee submits and is reimbursed from the general purpose health FSA for $300 in medical expenses incurred prior to December 31 of Year 1. At the end of the run-out period, $300 in the general purpose health FSA is unused and carried over to the HSA-compatible health FSA. Employee is then reimbursed $200 for the excess of the January claim over the amount elected for the HSA-compatible health FSA. Employee has $100 remaining in the HSA-compatible health FSA to be used for expenses incurred in the year or carried over to the next year. Employee is allowed to contribute to an HSA as of January 1 of Year 2.</blockquote> \n</div>","breadcrumb":[]},{"publication":"Tax Facts","baseDomain":"www.thinkadvisor.com/tax-facts","presentedBy":"","uri":"/tax-facts/2025/01/08/8724-are-the-new-1099-k-reporting-requirements-that-apply-for-business-owners-using-certain-apps-beginning-in023/","title":"8724.02 / What are the new 1099-K reporting requirements that apply for business owners using certain apps beginning in 2023?","byline":"John Manganaro","kicker":"","timeToRead":"11 minute","authors":[{"name":"John Manganaro","webUrl":"/author/profile/john-manganaro/"}],"kickerNode":[],"categories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"allCategories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"prettyDate":"January 08, 2025","pubDate":"2025-01-08 09:14:42","prettyModifiedDate":"December 02, 2024 at 01:29 PM","readtime":"11","primaryCategory":{"channelName":"","sectionName":"","uri":""},"image":{"uri":"https://images.thinkadvisor.com/contrib/content/uploads/sites/415/2021/12/Curtis_Scott_Raymond-James_640x640.jpg","width":"640","height":"640"},"summary":"<div class=\"Section1\">Editor’s Note: The IRS advises that taxpayers who receive incorrect Forms 1099-K request a corrected form from the issuer. The name and contact information of the issuer is listed under \"filer\" on the top left corner of the form. Taxpayers who do not recognize that issuer should contact the \"payment settlement entity\" (PSE) listed on the bottom left corner (above their account number). Once they receive the corrected form, they should keep a copy, along with any correspondence from the issuer or the PSE. The IRS also reminds taxpayers that the IRS itself cannot correct the Form 1099-K. If the corrected form is not received by the tax filing deadline, the taxpayer should report the incorrect amount on Schedule 1 (Form 1040), Additional Income and Adjustments to Income, rather than miss the tax filing deadline.<a href=\"#_ftn1\" name=\"_ftnref1\">1</a></div> \n<div class=\"Section1\"> \n \nStarting in 2024, PayPal, Venmo and other third-party payment networks must report a taxpayer’s transactions in excess of $5,000 per year to the IRS. The change was included in the American Rescue Plan Act (ARPA), which was was signed into law in March of 2021. The IRS announced the new phased-in threshold decrease in IR 2023-221 and Notice 2023-74. In Notice 2024-85, the IRS announced that 2025 will also be treated as a transition year. For 2025, the threshold will decrease to $2,500. After 2025, the threshold will decrease until it eventually reaches the originally proposed $600 level. \n \nUnder prior law, mobile payment apps only had to report transactions if a person had over 200 commercial transactions each year and the total value of those transactions exceeded $20,000. Now, apps like Venmo and Zelle must file and provide a Form 1099-K reporting any commercial income collected through the apps (personal charges between non-business parties are exempt from the new reporting rule) in excess of the applicable threshold. The rules also apply to taxpayers who make sales through internet sites, such as eBay, Airbnb, Etsy and StubHub. They also apply to taxpayers with seasonal businesses who accept credit cards through these types of apps. The apps themselves provide methods for taxpayers to identify their transactions as personal or commercial.3 \n \nThe IRS has now updated the FAQ on the new 1099-K reporting requirements. The guidance clarifies that taxpayers can report information from 1099-Ks separately or combine multiple 1099-Ks. \n \nThe IRS has also clarified that any gain on the sale of a personal item is taxable and may need to be reported on a Form 1099-K. However, the loss on the sale is not deductible. Taxpayers who received 1099-Ks for the sale of a personal items at a loss for 2022 made offsetting entries on Schedule 1 of Form 1040 by reporting the proceeds listed on Form 1099-K on Part I (Line 8z – Other Income) using the description \"Form 1099-K Personal Item Sold at a Loss.\" The taxpayer also reported the costs, up to (but not more than) the proceeds listed on Form 1099-K on Part II (Line 24z – Other Adjustments), again using the description \"Form 1099-K Personal Item Sold at a Loss.\" It is anticipated that future guidance will be issued on these and other issues. \n \n</div> \n<div class=\"refs\"> \n \n<hr align=\"left\" size=\"1\" width=\"33%\" /> \n \n<a href=\"#_ftnref1\" name=\"_ftn1\">1</a> IRS FS-2024-07. \n \n</div>","breadcrumb":[]},{"publication":"Tax Facts","baseDomain":"www.thinkadvisor.com/tax-facts","presentedBy":"","uri":"/tax-facts/2025/01/08/647-who-must-file-a-return/","title":"647 / Who must file a return?","byline":"","kicker":"","timeToRead":"11 minute","authors":[{"name":"jonathanneerman","webUrl":"/author/profile/-/"}],"kickerNode":[],"categories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"allCategories":[{"channelName":"Recently Updated Q&As","sectionName":"","slug":"recently-updated-q-and-as-tf","channelUri":""}],"prettyDate":"January 08, 2025","pubDate":"2025-01-08 09:07:54","prettyModifiedDate":"July 08, 2025 at 12:06 PM","readtime":"11","primaryCategory":{"channelName":"","sectionName":"","uri":""},"image":{"uri":"","width":"","height":""},"summary":"<div class=\"Section1\">Editor’s Note: Taxpayers who are not ordinarily required to file a tax return might consider filing a 2020 and 2021 tax return if they did not receive the full amount of the first or second round economic stimulus payments during the COVID-19 pandemic. These taxpayers may be eligible for a recovery rebate credit if they were eligible for the economic impact payments but have not received the full amount of their payment. Those taxpayers must file a federal income tax return to claim the recovery rebate credit even if they are not typically required to file a tax return. The deadline to file a return for 2021 and claim the credit is April 15, 2025.<div class=\"Section1\"> \n \nThe 2017 tax reform law modified the rules governing who is required to file a tax return for tax years beginning in 2018 through 2025. Because of the suspension of the personal exemption, unmarried individuals whose gross income exceeds the applicable standard deduction (see Q <a href=\"javascript:void(0)\" class=\"accordion-cross-reference\" id=\"752\">752</a>) are now required to file a tax return for the year. \n \nMarried individuals are required to file a tax return if the individual’s gross income, when combined with his or her spouse’s gross income, is more than the standard deduction that applies to a joint return and (1) the individual and his or her spouse at the close of the tax year shared the same household, (2) the individual’s spouse does not file a separate return, and (3) neither the individual nor his or her spouse is a dependent of another taxpayer who has income (other than earned income) in excess of $500.<a href=\"#_ftn1\" name=\"_ftnref1\">1</a> \n \nA return must be filed by every individual whose gross income equals or exceeds the following limits in 2025:<a href=\"#_ftn2\" name=\"_ftnref2\">2</a> \n(1)     Married persons filing jointly – $30,000 (if one spouse is 65 or older – $31,600; if both spouses are 65 or older – $33,200). \n(2)     Surviving spouse (see Q <a href=\"javascript:void(0)\" class=\"accordion-cross-reference\" id=\"756\">756</a>) – $30,000 (if 65 or older – $31,600). \n(3)     Head-of-household (see Q <a href=\"javascript:void(0)\" class=\"accordion-cross-reference\" id=\"757\">757</a>) – $22,500 (if 65 or older – $24,100). \n(4)     Single persons – $15,000 (if 65 or older – $17,000). \n(5)     Married persons filing separately – $15,000 (if 65 or older – $16,600). \n(6)     Dependents – every individual who may be claimed as a dependent of another must file a return for 2025 if he has unearned income in excess of $1,350 (plus any additional standard deduction if the individual is blind or elderly) or total gross income that exceeds the sum of any additional standard deduction if the individual is blind or elderly plus the greater of (a) $1,350 or (b) the sum of (i) $450 plus earned income. \nIn 2026, a return must be filed by every individual whose gross income equals or exceeds the following limits: \n(1)     Married persons filing jointly – $31,500 (if one spouse is 65 or older – $39,100; if both spouses are 65 or older – $46,700). \n(2)     Surviving spouse (see Q <a href=\"javascript:void(0)\" class=\"accordion-cross-reference\" id=\"756\">756</a>) – $31,500 (if 65 or older – $39,100). \n(3)     Head-of-household (see Q <a href=\"javascript:void(0)\" class=\"accordion-cross-reference\" id=\"757\">757</a>) – $23,625 (if 65 or older – $31,225). \n(4)     Single persons – $15,750 (if 65 or older – $23,750). \n(5)     Married persons filing separately – $15,750 (if 65 or older – $23,350). \nBlind taxpayers may need to attach supporting documentation to a tax return to support a claim for the additional standard deduction. The additional standard deduction for taxpayers who are blind at the end of the tax year is not considered when determining a taxpayer’s filing threshold amount. \n \nThe kiddie tax rules have changed in recent years. Before 2018 and after 2020, certain parents whose children are required to file a return may be permitted to include the child’s income over $2,100 on their own return, thus avoiding the necessity of the child filing a return. See Q <a href=\"javascript:void(0)\" class=\"accordion-cross-reference\" id=\"679\">679</a>. The 2017 Tax Act provided new rules with respect to the unearned income of minors. That income was to be taxed at the rates applicable to trusts and estates, while the earned income of minors would be taxed at the ordinary income tax rates applicable to single filers. The SECURE Act repealed this rule for tax years beginning in 2020 and thereafter. For 2018 and 2019, taxpayers could choose which set of rules to apply. See Q <a href=\"javascript:void(0)\" class=\"accordion-cross-reference\" id=\"679\">679</a>. \n \nA taxpayer with self-employment income must file a return if net self-employment income is $400 or more. See Q <a href=\"javascript:void(0)\" class=\"accordion-cross-reference\" id=\"784\">784</a>. \n \n<hr> \n \nPlanning Point: A taxpayer must file a return if any of the following special taxes are due: \n<ol> \n \t<li>Alternative minimum tax (see Q <a href=\"javascript:void(0)\" class=\"accordion-cross-reference\" id=\"779\">779</a> for more information on the expanded AMT exemption that applies after 2017).</li> \n</ol> \n<ol start=\"2\"> \n \t<li>Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. Taxpayers filing a return only because this tax is owed can file Form 5329 by itself.</li> \n \t<li>Household employment taxes. Taxpayers can file Schedule H by itself if filing a return only because this tax is owed.</li> \n \t<li>Social Security and Medicare tax on tips a taxpayer did not report to an employer or on wages received from an employer who did not withhold these taxes.</li> \n \t<li>Recapture of first-time homebuyer credit.</li> \n \t<li>Write-in taxes, including uncollected Social Security and Medicare or RRTA tax on tips that were reported to an employer or on group-term life insurance and additional taxes on health savings accounts.</li> \n \t<li>Recapture taxes.</li> \n \t<li>Additional tax on a health savings account (HSA), Archer MSA, or Medicare Advantage MSA distributions. If the taxpayer is filing a return only because he or she owes this tax, he or she can file Form 5329 by itself.</li> \n \t<li>Wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer Social Security and Medicare taxes.</li> \n</ol> \n \n<hr> \n \nEven if not required to file a federal tax return, a taxpayer may want to file one if withholdings of tax have occurred, or he or she is eligible for a refundable credit, such as the Earned Income Credit. \n \n</div><div class=\"refs\"> \n \n<hr align=\"left\" size=\"1\" width=\"33%\"> \n \n<a href=\"#_ftnref1\" name=\"_ftn1\">1</a>.    IRC § 6012(f). \n \n<a href=\"#_ftnref2\" name=\"_ftn2\">2</a>.    IRC §§ 6012(a), 63(c), 151; P.L.115-97. \n \n</div></div> \n","breadcrumb":[]}]},"youmightlike":null},"extensions":{"DateTime":"2025-07-13T03:45:30.857883847","ResponseTime":"?","AuthorizedUser":false,"AlmContext":"AlmContext{clientIP='10.0.253.253', internalIP='true', origin='', authorizedUser='false', Chinchilla, userAccount='null', UCID=null, ipAccount='null', olyEncId='null'}","NavServiceResponse":{"message":"","action":"","data":"","placResultsPublic":null},"DebuggingData":"Input=(term: \"recently-updated-q-and-as\", site: \"www.thinkadvisor.com/tax-facts\", pageSize: 10, page: 1)","UsedCache":"false","DataUrl":"http://ml2.alm.com:9216/bff-services/content/get-you-may-like-for-content.xqy?naturalId=/2018/01/03/most-fed-officials-backed-continued-gradual-rate-increases/&site=www.thinkadvisor.com&total="},"status":200,"headers":{}},"request":{"query":"\n####\n####\n# QUERY\n# ROUTE:/2018/01/03/most-fed-officials-backed-continued-gradual-rate-increases/\n####\n\n\nquery ThinkAdvisor__view_article_no_sitedir{slideshow:\n getContentStream(term: \"slideshow\", site: \"thinkadvisor.com\", pageSize: 3, page: 1, sort: \"\", direction: \"\") {\n name\n tieredName \n description\n page\n estimate\n h1\n metaTitle\n metaDescription\n pageSize \n contents {\n publication\n baseDomain\n presentedBy\n uri\n title\n byline\n kicker\n timeToRead\n authors {\n name\n webUrl\n }\n kickerNode {\n uri\n sectionName\n }\n categories{\n channelName\n sectionName\n slug\n channelUri\n }\n allCategories{\n channelName\n sectionName\n slug\n channelUri\n }\n prettyDate\n pubDate \n prettyModifiedDate \n readtime \n primaryCategory {\n channelName,\n sectionName,\n uri,\n }\n image {\n uri\n width\n height\n }\n summary\n breadcrumb {\n name\n uri\n }\n }\n }\n articleData:\n getContent(naturalId: \"/2018/01/03/most-fed-officials-backed-continued-gradual-rate-increases/\", site:\"thinkadvisor.com\") {\n uri\n canonicalUrl\n generatedId\n naturalId\n recombeeId\n type\n postFormat\n kickerPresentedBy {\n \t\t label\n \t\t value\n \t\t}\n breadcrumb{\n name\n \t\turi\n }\n presentedBy\n title\n readtime\n timeToRead\n prettyModified\n prettyDateTime\n needToKnow\n byline\n nofollow\n showDisclaimer\n authors {\n name\n description\n imageLarge\n webUrl\n }\n publication\n kicker\n kickerNode {\n name\n slug\n uri\n sectionName\n }\n prettyDate\n prettyDateTime\n pubDate\n modifiedDate\n isDownload\n primaryCategory {\n channelName\n sectionName\n name\n uri\n slug\n channelUri\n }\n tags\n image {\n uri\n width\n height\n alt\n }\n embed1\n embed2\n summary\n categories {\n name\n uri\n channelName\n }\n allCategories {\n sectionName\n channelName\n } \n bodyArray\n slides {\n title\n image\n caption\n height\n width\n }\n video\n\n }\n articlePackages:\n getPackagesForArticle(docId: \"/2018/01/03/most-fed-officials-backed-continued-gradual-rate-increases/\", limit: 3, publication:\"thinkadvisor.com\") {\n title \n slug\n type \n summary\n cssFile\n navigations {\n name\n link\n }\n articles {\n title\n kicker\n uri\n image {\n uri\n }\n }\n\n \n }\n recentData:\n getContentStream(term: \"recently-updated-q-and-as\", site: \"thinkadvisor.com/tax-facts\", pageSize: 10, page: 1, sort: \"\", direction: \"\") {\n name\n tieredName \n description\n page\n estimate\n h1\n metaTitle\n metaDescription\n pageSize \n contents {\n publication\n baseDomain\n presentedBy\n uri\n title\n byline\n kicker\n timeToRead\n authors {\n name\n webUrl\n }\n kickerNode {\n uri\n sectionName\n }\n categories{\n channelName\n sectionName\n slug\n channelUri\n }\n allCategories{\n channelName\n sectionName\n slug\n channelUri\n }\n prettyDate\n pubDate \n prettyModifiedDate \n readtime \n primaryCategory {\n channelName,\n sectionName,\n uri,\n }\n image {\n uri\n width\n height\n }\n summary\n breadcrumb {\n name\n uri\n }\n }\n }\n youmightlike:\n getYouMayLikeForContent(naturalId: \"/2018/01/03/most-fed-officials-backed-continued-gradual-rate-increases/\", site:\"thinkadvisor.com\") {\n uri\n title\n byline\n prettyDate\n readtime\n image {\n uri\n width\n height\n }\n summary\n }\n }"}}

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