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IRS Simplifies Procedures for Electing Tax Deferral on Canadian Retirement Plan Accrued Income

The IRS recently issued Revenue Procedure 2014-55, which simplifies the reporting obligation and method to obtain the deferral of U.S. taxation on interests held by U.S. taxpayers in Canadian Registered Retirement Savings Plans (?Ç£RRSPs?Ç¥) and Registered Retirement Income Funds (?Ç£RRIFs?Ç¥). Previously, to defer U.S. taxation on income accruing in their RRSPs and RRIFs to the date of distribution, U.S. taxpayers were required to file Form 8891 with the IRS, which many taxpayers failed to do. The IRS has eliminated Form 8891, as well as the requirement that taxpayers file this form for future and most prior tax years. U.S. taxpayers may generally qualify for favorable tax treatment under the Revenue Procedure so long as they continue to file U.S. tax returns for any year in which they hold an interest in a RRSP or RRIF and include any distributions as income on their U.S. tax returns. A copy of the… Continue Reading

Employer Provided Parking Can Be Taxable Employee Benefit

In Information Letter 2014-17, the IRS reminds employers that the amount that the fair market value of employer-provided parking exceeds the amount (i) paid by the employee for the parking, if any, plus (ii) the amount excludible from income as ?Ç£qualified parking,?Ç¥ is subject to income and employment taxes and withholding. For 2014, the amount excludible for qualified parking is $250 per month. Generally, qualified parking is parking provided by the employer on or near its premises. An employer is considered to provide parking if the employer pays for it (either directly or by reimbursing the employee) or provides it on property owned or leased by the employer. A copy of the Information Letter is available?áhere.

EEOC Files Second Wellness Program Lawsuit Against an Employer

The U.S. Equal Employment Opportunity Commission (?Ç£EEOC?Ç¥) sued an employer claiming it violated the Americans with Disabilities Act (?Ç£ADA?Ç¥) when the employer cancelled coverage and transferred 100% of the premium to the employee for failing to complete biometric screening and a health risk assessment. Employees who completed the screening were charged only 25% of the premium. This lawsuit follows the EEOC?ÇÖs ADA lawsuit earlier this year against a different employer that terminated an employee for failing to participate in the employer?ÇÖs wellness program. The EEOC has taken the position that wellness programs must be voluntary and cannot compel participation by cancelling coverage or imposing onerous penalties. The EEOC?ÇÖs Press Release can be found here.

October 2014