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New Spending Bill Passes! Targets Retirement, Healthcare and More

by MICPA | Dec 23, 2019   ()

By overwhelming majority and a signature from President Trump on Friday, Congress passed a new spending bill, The Further Consolidated Appropriations Act, 2020, H.R. 1865, which presents several changes to current tax law. Among those changes are repeals of three health care taxes, implementation of the Setting Every Community Up for Retirement Enhancement (SECURE) Act, tax relief for disaster victims, several extensions on expired tax provisions and a repeal of the Tax Cuts and Jobs Act (TCJA) provision regarding tax-exempt entities and parking as an unrelated business taxable income (UBTI).

The three repealed healthcare taxes, according to the Journal of Accountancy, include the Cadillac tax, which excised tax on some high-cost employer health plans, the medical device tax and the annual fee on health insurance providers. These taxes were all components of 2010’s Patient Protection and Affordable Care Act or (ACA). Designed to fund ACA, enaction of all three had been either suspended or postponed since inception. Also repealed is the TCJA provision regarding a tax on parking and transportation fringe benefits provided by tax-exempt organizations to their employees. Previously, the TCJA required these organizations to remit those benefits as UBTI.

There’s more to the bill than undoing previous tax law, however, as it also extends several expired tax provisions including those related to the new markets tax credit, employer credit for family and medical leave, the work opportunity credit and the employer credit for paid family and medical leave, to name a few. Additionally, The Further Consolidated Appropriations Act includes tax relief for victims of disasters occurring in 2018, 2019 and up to 30 days after enactment of the bill. This action includes an employee retention credit for eligible employers equal to 40% of qualified wages, which are paid to an employee during the time the business is not operational due to a natural disaster.

Finally, this bill enacts the SECURE Act which brings about a multitude of changes to retirement plan rules including age requirements for minimum distributions, multi-employer plan requirements, pension premium adjustment and penalty-free distributions for plan holders with recent births or adoptions among many others. It will be imperative for tax professionals, moving forward into 2020, to familiarize themselves with the implications of this new legislation. MICPA urges its members to do exactly that by taking advantage of our new course, “Keeping Retirement SECURE – New Act…New Opportunities” to stay ahead.


Source: MICPA
Source: MICPA

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