Changes to Flexible Spending Accounts – January 1, 2011
The cost of over-the-counter medicine or drug will no longer be reimbursed, unless a prescription is obtained from a physician. For more information please visit the IRS website or IRS Notice 2010-59.
Reporting Requirement Optional in 2011
Starting in tax year 2011, employers are required to report the aggregate cost of employer sponsored healthcare coverage on Form W-2. The reporting is optional in 2011 for tax year 2010. The IRS has released a revised draft of Form W-2, which includes the codes that employers may use for cost of coverage reporting. The prupose of this reporting is to show employees the value of healthcare benefits. The amount reported has no impact on tax liability.
Prescription Drug Discounts – January 1, 2010
Seniors, who experience the “Donut Hole” coverage gap in Medicare Part D, are entitled to receive a 50% discount when buying covered brand-named prescription drugs. Seniors will continue to receive additional savings on prescription drugs over the next ten years, until the coverage gap is closed in 2020.
Small Business Tax Credit Form
A new Form 8941 with instructions for small businesses was recently released by the IRS. The form is to be used by eligible employers to calculate the tax credit amount for the 2010 tax year. The number is then to be used as part of the general business credit on an employer’s tax return.