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Federal, State and Local Governments News

Increase in Information Return Penalties
Penalties for failure to file correct information returns and/or to furnish correct payee statements have increased and are now subject to inflationary adjustments.

Local Lodging Expenses
Lodging expenses an employee incurs when not traveling away from home are generally considered taxable income to the employee unless they meet the safe harbor or facts and circumstances test.

Social Security and Medicare Taxes - Section 218 Retroactive Payments
State and local governments that have established Section 218 agreements with the Social Security Administration (SSA) can agree to retroactively modify these agreements to establish coverage for past years.

IRS Guidance to Simplify ABLE Program Administration
The IRS announced three changes to the proposed rules for new tax-favored Achieving a Better Life Experience accounts for eligible disabled individuals.

Patient Protection and Affordable Care Act
See the IRS page summarizing major provisions of the Patient Protection and Affordable Care Act.

Compensation Paid to Dependents of Fallen Public Safety Officers is Excluded from Gross Income
On May 22, 2015, the Don't Tax Our Fallen Public Safety Heroes Act became effective. The Act adds Internal Revenue Code section 104(a)(6), which provides a specific exclusion from income for amounts paid.

Tax Benefit for Disability IRC Section 529A
The Achieving a Better Life Experience (ABLE) Act permits a state to establish and maintain a new type of tax-advantaged savings program (under Section 529A of the Internal Revenue Code) for a qualified disabled person.

Certain Medicaid Waiver Payments Excludable
Notice 2014-7 addresses tax treatment of payments to related/unrelated individual care providers.

Explanation of Third-Party Payroll Provider Responsibilities
The IRS has released a fact sheet (2013-9) addressing third-party payroll procedures.

Same Sex Couples: Guidance for Employers
Notice 2013-61 addresses claims for overpayment of taxes.

Voluntary Classification Settlement Program has expanded
Two announcements provide guidance that clarifies rules on VCSP eligibility.

Requirements for Furnishing Form 1099-G Electronically
Consent requirements must be met prior to furnishing statements.

Educating Your Employees About Tax Compliance
Employers can use these communication products to help employees understand their tax compliance responsibilities.

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Page Last Reviewed or Updated: 11-Mar-2016