Parking & Transit Maximums and FSA & HSA Maximums for 2016

The Consolidated Appropriations Act of 2016 was recently passed and takes effect as of January 1, 2016. As a part of that bill, the monthly maximum tax exclusion for both transit AND parking allowances will be equal at $255.00/month. This Act also retroactively increases the maximums for 2015 from $130 to $250.

Employers should note the Federal maximum for transit pre-tax benefits is $255.00/month, but the state of Massachusetts is keeping the maximum transit pre-tax benefit at $130.00/month.  Employees will still be able to elect up to the $255.00/month amount, but employers will have to setup and process the Federal and State tax differently in their payroll system.  For Federal, employees can elect up to $255.00 pre-tax, but for Massachusetts the maximum pre-tax amount can only be $130.00.  Elected amounts from $130-$255 for Massachusetts will need to be treated differently by the company’s payroll provider.

Employers (that offer post-tax transit benefits plans) will be required to modify any 2015 post-tax deductions to be pre-tax of up to $250 per month. It is important to note that these modifications will only affect employees’ W-2 forms.

If employees would like to modify their elections, they will need to fill out an Election Change Form and provide it to their company’s benefit administrator.  The Election Change Form should be kept internally or submitted to your third party administrator.

In 2016, the FSA maximum elected amount by employees will remain at $2,550.  If an employer offers a Health Savings Account (H.S.A.) to its employees, the maximum contribution for single coverage will remain at $3,350 and for family coverage the maximum contribution will increase to $6,750.

If you need help obtaining an Election Change Form or have any questions regarding any of the maximum contribution amounts for 2016, please contact our office at 978-777-6554 or at iba@ipswichfinancial.com.

Thank you.

IRS Grants Extensions for Filing 1094 & 1095 Forms

The Internal Revenue Service (IRS) announced this week they will be granting an extension for employers, insurers, and other providers who are required to file and report the 1094 & 1095 forms.

Notice 2016-4 states insurers have until 3/31/2016 to distribute the 1095-B forms to covered members and employers have until 3/31/2016 to distribute the 1095-C forms to their full-time employees.  The extension provides insurers and employers with an extra 2 months to provide covered members these documents.  The original deadline to distribute these documents was 2/1/2016.

For employers and insurers who are not filing these forms electronically, they now have until 5/31/2016 to submit and report the 1094-B/1094-C & 1095-B/1095-C forms to the IRS.  The original deadline to file these forms to the IRS was 2/29/2016.  For those employers who plan on filing electronically, the deadline has been extended until 6/30/2016.  The original deadline to file these forms electronically was 3/31/2016.

Notice 2016-4 also provides valuable information for those who may not have received their 1095-B or 1095-C forms. For more information regarding Notice 2016-4, please click here.

If you have any questions, please do not hesitate to call our office at 978-777-6554.

Thank you.

New Developments in MA Earned Sick Leave Law

This week Attorney General Maura Healey announced a safe harbor provision for the  Massachusetts Earned Sick Leave law, providing for a delay in compliance until January 1, 2016.

The safe harbor provision includes:

1.    Employers who had a time off policy (put in place prior to 5/1/15) offering ALL employees 30 or more hours of paid time off in 2015, and

2.    Employers must also ensure that the sick leave is job-protected and abides by the law’s non-retaliation policies.

Those employers who are operating within the safe harbor provision, along with all other employers, will eventually need to be fully compliant with the Earned Sick Leave Law by January 1, 2016.  If your sick leave policy does not follow the guidelines above, you will need to create a policy compliant with Massachusetts’ Earned Sick Leave Law by July 1, 2015.

Ipswich Bay Advisors will keep you updated on any changes to the Earned Sick Leave Law. If you need help determining whether or not your company is in compliance with this law or for help with creating a policy, please contact our office at 978-777-6554.

Thank you.

Massachusetts Establishes The Parental Leave Act

A new piece of Massachusetts legislation similar to Maternity Leave was signed into law in earlier this month. The new “Parental Leave Act” will become effective on April 7, 2015 and will allow both males AND females who work for a company with more than 6 employees to take an 8 week job-protected leave for the birth, adoption, or placement by a court order of a child.

This time off can be paid or unpaid depending on the employer’s policies and must be available to utilize after the employee has been employed at the company for 90 days. If feasible, the employee should inform their employer at least two weeks in advance of their intended parental leave.

However, in the event that the mother and father both work for the same company, the employees would have 8 weeks to split between each other.

Employees must be informed of the addition of this act to their company’s leave policies. This can be done via a written notice or by a posting an announcement in a common work area. If you need help developing a notice or adjusting your employee handbooks, please feel free to contact Ipswich Bay Advisors.

Massachusetts Minimum Wage Increase Reminder

This is a reminder that on January 1, 2015 the Massachusetts minimum wage was raised by a dollar, from $8 to $9 an hour for eligible employees.

Employees who are not eligible for the wage increase to $9/hour are those who are:

v  Being rehabilitated in an educational, religious, or non-profit organization

v  Service industry workers (their minimum wage increased to $3/hour on January 1, 2015)

v  Members of religious orders

v  Agricultural workers (their minimum wage increased to $8/hour on January 1, 2015)

v  Outside sales reps who do not travel to their office daily

There will be a dollar increase to the minimum wage for eligible employees every year on January 1^st until 2017. Service industry workers will also see an increase every year in their hourly wage until 2017. These increases are illustrated in the charts below:

                               

Minimum Wage Increases for Eligible Employees
Year	Hourly Rate
2015	$9.00
2016	$10.00
2017	$11.00

Service Industry Wage Increases
Year	Hourly Rate
2015	$3.00
2016	$3.35
2017	$3.75

It is important that employers abide by these wage laws or they risk facing civil and criminal charges. If you have any questions about the recent wage changes, please contact Ipswich Bay Advisors at 978-777-6554.

Thank You.

The Tax Increase Prevention Act of 2014 (H.R. 5771)

What this legislation means for your company’s commuter benefit plans

Last month, President Obama passed the Tax Prevention Act of 2014. Although it contains an array of different tax provisions, this regulation will affect employers who offer commuter transit benefits in particular. The transit and parking pre-tax limits will be retroactively extended to the end of 2014 and set to $250/month limit for 2014 (NOT the previous $130/month transit limit). This will not affect pre-tax parking limits which were already set to $250/month.

According to the IRS, employers can expect to see the pre-tax transit limits return to $130/month in 2015. Parking limits will remain at $250 for 2015.

No changes are necessary for employers, unless employees had elected post tax deductions in amounts beyond the $130/month limit.  If so, these deductions can now be revised to be pre-tax.  If employees had only elected $130/month pre-tax, then no adjustments to their election are permitted retroactively.  This adjustment to the 2014 transit benefits will affect your employees’ pre-tax savings on their W-2 forms.

If you have any questions regarding this legislation change, please feel free to contact Ipswich Bay Advisors.

Thank You.

What You Should Know About Earned Sick Time

Last week at the polls, voters in Massachusetts approved the right for employees to earn and use up to forty hours of sick leave in the workplace each year. Listed below is what you should know about Earned Sick Time:

v  Beginning on July 1, 2015, this new legislation will allow employees who work for larger companies (11 + employees) to be paid for sick leave, as opposed to those who work for smaller companies (< 11 employees) whose sick leave will be unpaid.

v  This leave can be used in order to care for his/her self, spouse, children, parents or spouse’s parent in the event of a routine medical appointment, injury, physical illness or mental illness. An employee may also use the leave to deal with the effects of domestic violence.

v  An employee can only request sick leave after the first 90 days of employment with a company.

v  Employees are required to earn a minimum of 1 hour of sick time per every 30 hours that they work.

v  Although employees may not use more than 40 hours each year, they can carry over hours that are unused from previous years. These hours are not “paid out” when the employee resigns or is terminated.

v  Employers may request proof of illness if the hours used by an employee for an illness exceed 24 work hours in a row.

v  A notice/handout explaining Earned Sick Leave must be posted where employees can see it.

Further details regarding the administration of the law are still being worked out.  Ipswich Bay Advisors will provide updates as they are released.  If you have any questions regarding the recent legislation or would like our assistance in reviewing how the Earned Sick Time law coordinates with your current leave policies, please contact our office.

Thank you.