Benefits Essentials

Benefits Essentials brings you the latest HR, Benefits, and Tax News, Trends & Developments.

Monday, December 11, 2006

The Tax Relief and Health Care Act of 2006

The House and the Senate have passed H.R. 6111, the Tax Relief and Health Care Act of 2006.

The House approved the Act on Dec. 8 by a vote of 367-45, and the Senate approved the measure on Dec. 9, by a vote of 79-9. The bill is now headed to the President for signature.

The Tax Relief and Health Care Act of 2006 extends and/or modifies many tax provisions, including several tax breaks that had expired at the end of 2005.

Friday, October 20, 2006

Retirement News for Employers

This Special Edition announces the National Save for Retirement Week and the 2007 dollar limitations.

To read the October 2006 Special Edition, please access the (PDF) newsletter file directly or visit the Current Edition of the Retirement News for Employers page in the Retirement Plans Community section of the Web site.

The Retirement News for Employers is a periodic newsletter of the IRS Employee Plans with retirement plan information for employers and business owners from Employee Plans (Tax Exempt and Government Entities (TE/GE) at the IRS). The freely available Adobe Acrobat Reader software is required to view, print and search this file.

The presence of IRS material does not constitute or imply the endorsement, recommendation or favoring by the IRS of any opinions, products or services offered by the sponsor of this web page or document.

Sunday, September 03, 2006

The Pension Protection Act of 2006

The Pension Protection Act of 2006 (PPA) was signed into law by President Bush on August 17th, 2006.

The Act contains a variety of provisions designed to strengthen the funding rules for defined benefit pension plans. The new rules will generally apply to plan years beginning after 2007.

The Act includes a number of significant tax incentives to enhance retirement savings for millions of Americans, including:

1. Permanent Retirement and Savings Incentives
2. Saver’s Credit Made Permanent
3. DROP Plans for Public Safety Employees
4. Direct Deposit of Tax Refunds into IRAs
5. Automatic Enrollment in employer-sponsored defined contribution pension plans
6. Treatment of IRA Contributions for Guard and Reservists Called to Active Duty
7. Long Term Care/Annuity Products
8. Public Safety Officer Early Withdrawals for Health and Long Term Care Insurance
9. Corporate-Owned Life Insurance (COLI)
10. Clarification of Treatment of Tribal Pension Plans
11. Black Lung Benefit Trust Funds
12. Transfers of Excess Defined Benefit Fund Assets for Retiree Health

Charitable Giving Incentives

The bill contains a charitable giving incentives package designed to encourage charitable donations:

1. Tax-Free Distributions From IRAs for Charitable Purposes
2. Charitable Deduction for Contributions of Food Inventory
3. Basis Adjustment to Stock of S Corporation Contributing Property
4. Charitable Deduction for Contributions of Book Inventory
5. The Tax Treatment of Certain Payments to Controlling Exempt Organizations
6. Qualified Conservation Contributions
7. Excise Tax Exemption for Blood Collector OrganizationsCharitable Reform

In addition, the bill contains a charitable reform package designed to responsibly regulate exempt organizations.

For additional information, see

. The Committee on Ways & Means, US House of Representatives website: (
· BenefitsEssentials Newsblog
· H.R. 4, Pension Protection Act of 2006 (July 28, 2006)
· Joint Committee on Taxation Technical Explanation Of H.R. 4, The "Pension Protection Act Of 2006," As Passed By The House On July 28, 2006, And As Considered By The Senate On August 3, 2006 (JCX-38-06).

Monday, August 28, 2006

New IRS Publication Summarizes Tax Benefits to Hurricane Victims

In a continuing effort to assist victims of last year’s hurricanes, the IRS has issued a new publication summarizing the tax incentives to rebuild the Gulf Coast, which are valued at almost $9 billion.

Publication 1460, Highlights of Tax Relief Provided to Taxpayers in Response to Hurricanes Katrina, Rita, and Wilma, provides up-to-date information on tax relief, such as:

  • The extended deadlines available to those affected by the hurricanes.

  • The rules on claiming a casualty loss and directions on how to get information on the new safe harbor method, which provides a simple way to calculate a loss.

  • Summaries of the different credits available to businesses, such as the work opportunity credit, the employee retention credit and the new market tax credit.

  • Explanations of the special depreciation rules and deduction for clean-up costs for businesses.
[IR-2006-133, Aug. 24, 2006]

For additional information, see:

Friday, August 11, 2006

DOL Releases Draft Strategic Plan for Fiscal Years 2006-2011

The Department of Labor has released a draft copy of its FY 2006–2011 Strategic Plan.

The plan is available for public comment as part of the strategic planning process under the Government Performance and Results Act (GPRA). This document integrates the Department’s diverse missions and different program objectives into a presentation of performance objectives under four overarching strategic goals.

The final Strategic Plan will be officially released in September 2006.

For additional information

Draft Strategic Plan for Fiscal Years 2006 — 2011:

Wednesday, July 12, 2006

Employee Plans Newsletter Available from the IRS

The Summer Edition of Employee Plans News , a periodic newsletter with retirement plan information for retirement plan practitioners - attorneys, accountants, actuaries and others - from the Tax Exempt and Government Entities (TE/GE) division of the IRS, is now available.

Some of the items covered in the current issue, include:
  • Experts Agree: When it comes to plan mistakes, fix ’em now rather than later;
  • Critical Michael Julianelle (Director, EP Examinations);
  • Forms & Pubs;
  • HERO Act;
  • Form 5500 Filing Tips - Do You Really Have a Multiemployer Plan?;
  • DOL Corner;
  • PBGC Insights;
  • This Way to the Forums;
  • Employee Plans Published Guidance;
  • EP Senior Leadership;
  • Calendar of EP Benefits Conferences
For more information, view the current issue, here (Note: PDF file).

IRS Renews Alert Following New Email Scams

After increased complaints, the IRS reminds taxpayers to be on the lookout for bogus e-mails claiming to be from the tax agency.

These e-mails are designed to trick the recipients into disclosing personal and financial information that could be used to steal identities and financial assets. The IRS does not send out unsolicited e-mails asking for personal information.

Find out more about these e-mail scams and what to do if you receive one or if your identity is stolen by reading the whole story in News Release IR-2006-104.

“The IRS does not send out unsolicited e-mails asking for personal information,” said IRS Commissioner Mark W. Everson. “Don’t be taken in by these criminals.”

The IRS has seen a recent increase in these scams. Since November, 99 different scams have been identified, with 20 of those coming in June – the most since 40 were identified in March during the height of the filing season.

The IRS has established an electronic mailbox for taxpayers to send information about suspicious e-mails they receive which claim to come from the IRS. Taxpayers should send the information to:

More than 7,000 bogus emails have been forwarded to the IRS, with nearly 1,300 forwarded in June alone.

Links for more information:

Wednesday, June 21, 2006

USCIS Reaches H-1B Cap

The U.S. Citizenship and Immigration Services (USCIS) has announced that it has received a sufficient number of H-1B petitions to meet the congressionally-mandated cap for fiscal year 2007 (FY 2007).

The “final receipt date” for H-1B petitions subject to the FY 2007 annual cap was May 26, 2006. Affected H-1B petitions received on that date will be subject to the random selection process described below. H-1B petitions subject to the FY 2007 annual cap that are received by USCIS after the “final receipt date” will be rejected.

Additional information regarding the specific number of H-1B petitions processed is available at:

Current H-1B Workers

Petitions filed on behalf of current H-1B workers do not count towards the congressionally-mandated H-1B cap. Accordingly, USCIS will continue to process petitions filed to:
  • Extend the amount of time a current H-1B worker may remain in the United States.
  • Change the terms of employment for current H-1B workers.
  • Allow current H-1B workers to change employers.
  • Allow current H-1B workers to work concurrently in a second H-1B position.
For Additional Information, see:

New Bill to Raise Minimum Wage

Legislation to Help Workers, Local Businesses

U.S. Rep. Phil English (R-Pa.) has introduced legislation, H.R. 5368, which would raise the minimum wage and provide tax relief for small businesses. The bill has been referred to the Committee on Ways and Means, and to the Committee on Education and the Workforce for consideration.

English’s bill approaches the issue of the minimum wage from two broad angles: 1) Raise the minimum wage for workers; 2) Expand tax relief for small businesses. Workers earning the current minimum wage of $5.15 per hour would see an increase over four years to $7.50 and by increasing the earning limit, workers receiving Social Security disability payments would be able to continue receiving those benefits. In the tax portion of the legislation, English proposes to increase and make permanent full small business expensing of equipment, reform the home office deduction, and exempt the welfare-to-work and work opportunity tax credits from the Alternative Minimum Tax (AMT).

English was an original sponsor of the 1996 Quinn-Riggs-English amendment to raise the minimum wage to $5.15.

For additional information:


DOL Launches New Online Back Wage Employee Locator

The U.S. Department of Labor's (DOL) Wage and Hour Division (WHD) has launched a new Web-based back wage employee locator to provide easy and secure access for employees to find and collect back wages due to them.

The new back wage employee locator guides employees through an online series of questions that helps them determine if they are owed back wages as a result of a WHD investigation.

The new system queries a database that contains information about people who are due back wages and their employment history. Employees should be ready to enter information about their past or present employment, such as the name and location of their employer. Those due back wages will be provided restitution upon verification of their identity.

This new electronic program is part of an ongoing effort at the DOL to meet the e-government objectives of the president's management agenda. The back wage employee locator is accessible from the Wage and Hour Division's home page at or directly at

To get more information on the laws the Wage and Hour Division enforces, go to its home page or call the DOL's toll-free help line at 1-866-4USWAGE (1-866-487-9243).

Wednesday, June 07, 2006

NEW DOL Employment Law Guide Now Available (Guía en Inglés y Español)

The U.S. Department of Labor (DOL) announces the availability of a newly revised edition of its Employment Law Guide.

The Employment Law Guide describes in plain language the major employment laws and regulations enforced by DOL. The Guide is available in English or Spanish and is written in plain language to assist employers in developing wage, benefit, safety and health and nondiscrimination policies for their businesses.

Both English and Spanish versions of the Guide can be printed from or viewed on the DOL Web site at A free English language bound copy of the Guide can be ordered by calling 1-866-4-USA-DOL.

El Departamento del Trabajo de los Estados Unidos (DOL) anuncia la disponibilidad de una nueva edición revisada de la Guía de Derecho Laboral. La Guía de Derecho Laboral describe claramente las leyes principales del empleo y las regulaciones impuestas por el DOL. La guía está disponible en Inglés o Español y está escrita en lenguaje claro para ayudar a los empleadores en el desarrollo de los sueldos, los beneficios, la seguridad y la salud y políticas de no discriminar para sus empresas.

Se puede ver e imprimir ambos versiones de la Guía, en Inglés y Español, en la página web del DOL en Se puede ordenar una copia gratuita en Inglés de la Guía en llamar 1-866-4-USA-DOL.

Wednesday, May 24, 2006

DHS Secure Border Initiative

DHS Secure Border Initiative includes greatly increased interior enforcement of our immigration laws – including more robust worksite enforcement.

The Secure Border Initiative (SBI) is a comprehensive multi-year plan to secure America’s borders and reduce illegal migration. Homeland Security Secretary Michael Chertoff has announced an overall vision for the SBI which includes:

  • More agents to patrol our borders, secure our ports of entry and enforce immigration laws;
  • Expanded detention and removal capabilities to eliminate “catch and release” once and for all;
  • A comprehensive and systemic upgrading of the technology used in controlling the border, including increased manned aerial assets, expanded use of UAVs, and next-generation detection technology;
  • Increased investment in infrastructure improvements at the border – providing additional physical security to sharply reduce illegal border crossings; and
  • Greatly increased interior enforcement of our immigration laws – including more robust worksite enforcement
For more information, see:

Friday, May 12, 2006

President's Plan to Make Health Care More Affordable And Available Through HSAs

President's Comprehensive Strategy To Make Health Care More Affordable And Available For All Americans Through Health Savings Accounts (HSAs)

The White House Fact Sheet states that:
"The Administration is determined to reduce health care costs by pursuing practical, commonsense reforms that will improve quality and increase choice. America leads the world in health care because we believe in a system of private medicine that encourages innovation and change. The best way to reform our health care system is to preserve this system of private medicine, strengthen the relationship between doctors and patients, and make the benefits of private medicine more affordable and accessible."

For additional information, see:
Fact Sheet: Making Health Care More Affordable and Accessible for All Americans

Wednesday, May 10, 2006

Protect Yourself from Identity Theft

Treasury Secretary John W. Snow on Protecting Americans from Identity Theft:

"Perhaps the most serious threat to financial consumers today is identity theft. Identity thieves are clever, adaptable, and heartless. Indeed, many identity thieves specifically target the most vulnerable members of society - families of the recently deceased, seniors, hospital patients, and men and women serving our nation overseas. The effects don't stop with a few unauthorized charges. A ruined credit history can be an unbearable burden that lasts for years. They are a threat to individual Americans and a threat to our progressive and open economy.

"President Bush recognized from the beginning the need for his Administration to act quickly to address this problem. Today, the President signed an executive order that creates the Nation's first ever Identity Theft Task Force. This task force will marshal the resources of the federal government to crack down on the criminals who traffic in stolen identities, and protect American families from this devastating crime.

"Treasury has been working hard to fulfill the President's call to action and protect Americans' financial assets. In just the past few months we have distributed approximately 200,000 free educational DVDs across the country to help Americans learn about identity theft, how they can protect themselves, and what they should do if they think someone is attacking their information.

"The Fair and Accurate Credit Act, signed by President Bush in 2003, has helped teach Americans how to protect their assets by giving them easier access to spot unauthorized activity on their credit information and by allowing businesses to move quickly to identify the criminals at work. President Bush's leadership on this issue has provided Americans the needed tools to keep informed and to protect their financial information. His efforts today remind us that no matter where or when, we must remain constantly alert and work together to prevent this crime from ruining more lives."


For more information check out Treasury's Identity Theft Resource page at:

Preview Upcoming DOL Regulations

The Department of Labor's Unified Agenda of upcoming Federal Regulations, is published twice a year. The Spring 2006 edition is currently available here (as a PDF document).

This document sets forth the Department's semiannual agenda of regulations that have been selected for review or development during the coming year.

The agenda complies with the requirements of both Executive Order 12866 and the Regulatory Flexibility Act. The agenda lists all regulations that are expected to be under review or development over the coming year, as well as those completed during the past six months.


Friday, May 05, 2006

May 15th Medicare Deadline Looms

The May 15 deadline for enrolling in the new Medicare prescription drug plan is only a few days away. Seniors who fail to meet the deadline can enroll later, but they will have to pay penalties.

You may sign up from November 15, 2005 to May 15, 2006. If you joined by December 31, 2005, your coverage started January 1, 2006. If you haven’t signed up by May 15, 2006, you may pay a penalty. Your next opportunity to enroll will be from November 15, 2006 to December 31, 2006.

See for more information.

IRS Reminds Large Tax-Exempt Organizations of May 15 e-file Deadline

The Internal Revenue Service reminds large tax-exempt organizations of the May 15 deadline to electronically file federal information returns, including Form 990.

For the first time, exempt organizations are required to file these returns electronically if they have $100 million in total assets and file at least 250 returns per year –– including income, excise, employment tax and information returns such as forms W-2 and 1099.

Exempt organizations that cannot meet the May 15 deadline may request an automatic extension using Form 8868 and file by August 15, 2006. Exempt organizations are encouraged to file their extension forms electronically as well.

For tax years ending on or after Dec. 31, 2006, the electronic filing requirement will be expanded to include the year 2006 returns of tax-exempt organizations with $10 million or more in total assets that file at least 250 returns per year. In addition, private foundations and charitable trusts will be required to electronically file Form 990-PF, regardless of asset size, if they file at least 250 returns per year. Because of the ease with which organizations can electronically file, all tax-exempt organizations are encouraged to do so voluntarily.

For additional information, see:

Monday, May 01, 2006

Child Labor Laws and the Summer Employment of Minors

Now is the time of year that many minors are considering summer employment, and many employers are considering hiring minors for summer jobs and internships. Be aware, that in many states, an employment certificate or permit is required for minors under 18 before they may begin work. High school graduates, minors who work for their parents, and minors who do industrial homework are generally also included in this group.

Child Labor. The sale of goods produced in any part through the use of child labor is prohibited in many states and is often punishable as a misdemeanor.[1] This can include so-called "piecework" produced in the home. “Child labor” is generally defined as employment of persons under 16 years of age. This prohibition on the employment of children and the trading of goods produced by minors is often subject to several exceptions.

Generally, full-time school is compulsory for children under 16 years old. A community can require those who are not employed, to attend school until they reach age 17 or graduate. In most states, High school graduates, regardless of age, are not required to continue attending school. However, they often must provide an employer with a Full-time Employment Certificate until they reach their 18th birthday. Of course, there are certain exceptions to these rules; check with your State Employment Office for details.

In New York State, for example, to obtain working papers, students must first get an application from their school office. Those who are not attending school or who are applying during vacation periods, can often get the address of the certifying office from the school nearest their home. The complete application form will often require:

  • the signature of a parent or guardian,
  • birth or baptismal record for proof of age, and
  • a doctor’s certificate showing that the minor is physically fit to work

Types of Working Papers can include:

· Student Non Factory Employment Certificate

· Student General Employment Certificate, and

· Full-Time Employment Certificate

· Special Occupation Permits, including:

o Farm Work Permits

o Newspaper Carrier Permits

o Street Trades Permits, and

o Child Model Permits

For Additional Information:


State Information:
New York:

Wednesday, April 26, 2006

IRS Provides Sample Plan Amendment for Roth 401(k) Plans

Notice 2006-44 provides a sample plan amendment for sponsors, practitioners, and employers (plan sponsors) who want to provide for designated Roth contributions in their § 401(k) plans.

The sample amendment will help those plan sponsors comply with the requirement to timely adopt a discretionary amendment by the end of the plan year in which the amendment is effective, as set forth in section 5.05(3) of Rev. Proc. 200566, 2005-37 I.R.B. 509.

Notice 2006-44 will appear in Internal Revenue Bulletin 2006-20,
May 15, 2006.