The IRS has issued a long string of regulations and rulings on “cafeteria plans” over the past 20 years. Even expert tax practitioners have trouble keeping up with all the stops and starts. But a new comprehensive set of proposed regulations look like the real deal. (NPRM REG-142696-05)
Strategy: Amend an existing plan to comply with the new regs. For most companies, the updates will be minor. If you adopt a cafeteria plan for the first time in 2008, use these new regulations as a guideline.
The new proposed regulations are mandatory for plan years beginning after 2008, but the IRS says you can rely on them now. That’s a good indication that they’re here to stay.
Here’s the whole story: Under a cafeteria plan authorized by Section125 of the tax code, you can provide employees with a “menu” of tax-free to choose from in lieu of cash compensation. Benefits that are exempt from tax under a specific c...(register to read more)
- How to Fire an Employee the Legal Way: 6 Termination Guidelines
- 10 Secrets to an Effective Performance Review
- On-demand leave isn't reasonable accommodation
- To attract younger talent, help repay student loans
- You can lead workers to PCs, but can you make them click?
- Completing the I-9: Top 10 do's and don'ts