by admin | Dec 23, 2021 | IRS
On November 4, 2021, the Internal Revenue Service (IRS) released Notice 2021-61 announcing cost-of-living adjustments affecting dollar limits for pension plans and other retirement-related items for tax year 2022. Many pension plan limits will change next year because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. Other items, however, will not increase for 2022. Here is a summary of the limits for 2022.
For 401(k), 403(b), and most 457 plans and the federal government’s Thrift Savings Plans:
- The elective deferral (contribution) limit increases from $19,500 for 2021 to $20,500 for 2022.
- The catch-up contribution limit for employees aged 50 and over who participate in these plans will stay the same at $6,500 for 2022.
For individual retirement arrangements (IRAs):
- The limit on annual contributions will not change for 2022. It remains $6,000.
- The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment so it remains $1,000 for 2022.
For simplified employee pension (SEP) IRAs and individual/solo 401(k) plans:
- Elective deferrals increase to $61,000 for 2022, based on an annual compensation limit of $305,000 (up from the 2021 amounts of $58,000 and $290,000).
- The minimum compensation that may be required for participation in a SEP remains unchanged at $650.
For savings incentive match plan for employees (SIMPLE) IRAs:
- The contribution limit on SIMPLE IRA retirement accounts increases from $13,500 for 2021 to $14,000 for 2022.
- The SIMPLE catch-up limit remains unchanged at $3,000 for 2022.
For defined benefit plans:
- The basic limitation on the annual benefits under a defined benefit plan increases from $230,000 for 2021 to $245,000 for 2022.
Other items:
- The threshold for determining “highly compensated employees” increases from $130,000 for 2021 to $135, 000 for 2022.
- The threshold for officers who are “key employees” in a top-heavy plan increases from $185,000 for 2021 to $200,000 for 2022.
- In a separate announcement, the Social Security Administration stated that the 2022 taxable wage base will increase to$147,000, an increase of $4,200 from the 2021 taxable wage base of $142,800. Thus, the maximum Social Security tax liability will increase for both employees and employers.
The IRS announcement is needed information for employers that sponsor 401(k) plans and other types of retirement and savings plans. For those interested in health and welfare plans, the IRS will release a separate announcement on the 2022 benefit limits for health flexible spending accounts (HFSAs) and transit benefit programs which we’ll cover separately on this blog.
By Kathleen A. Berger, CEBS
Originally posted on Mineral
by admin | Dec 15, 2021 | IRS
The Internal Revenue Service (IRS) announced annual inflation adjustments for more than 50 tax provisions, including an increase in voluntary employee contributions to employer-sponsored healthcare flexible spending arrangements (HFSAs) to $2,850 for plan years beginning in 2022, up from the 2021 limit of $2,750.
For HFSAs that include a carryover provision, up to $570 may be carried over from the 2022 plan year to the next plan year. Note that HFSAs had the option of allowing an unlimited carryover for the 2021 plan year due to federal COVID-19 relief provisions. For unused HFSA funds at the end of the 2022 plan year, however, the plan cannot allow more than $570 to be carried over for use in the following year.
The IRS also announced an increase in the 2022 monthly limits for qualified transportation fringe benefits under Code § 132(f). For transportation in a commuter highway vehicle and mass transit passes, the limit will be $280 (up from $270 this year). The separate monthly limit for qualified parking also will increase to $280.
Details of this announcement can be found in Revenue Procedure 2021-45.
By Kathleen A. Berger, CEBS
Originally posted on Mineral
by admin | Dec 7, 2021 | Hot Topics
“Children laughing, people passing, meeting smile after smile” stirs happy memories of singing Christmas carols for some, but for others, the holidays can be the most stressful and loneliest time of the year. The holidays often present a dizzying array of demands – shopping, baking, and entertaining to name a few. For those dealing with mental health conditions like depression or or anxiety, the holidays can be even harder.
Holiday depression can be misinterpreted as being nothing more than the winter blues. So, when it comes to the holidays, people are more focused on their physical health issues instead of their mental health issues. They are more interested in losing weight than taking care of their mental health. Being unaware that there is a problem can make holiday depression evolve into major depression. Counseling and medication are good avenues to seek if you are living with symptoms of depression.
Here are 9 tips that you can use to help you with holiday depression:
- Be realistic – Holidays change just as people change. Kids grow older, people move, and new people will become a part of your life. Focus on those connections, new traditions and remember past holidays with fondness while still enjoying the one right in front of you.
- Schedule Some Down-Time – Even 15-20 minutes a day to enjoy some quiet time, take a bath, listen to music or read a book can do wonders for your stress levels. Plus, it’s ok to say no: you don’t have to attend every party or family event.
- Don’t Isolate Yourself – Look for ways that you can enjoy social connections, even if you aren’t able to go home for the holidays. If you are feeling lonely, ask a friend to come over for a heart to heart or volunteer for something that interests you.
- Drink Only in Moderation – Alcohol is a depressant and can exacerbate negative feelings.
- Exercise Regularly – While hitting the gym can be tough when you are stressed and busy, try going for a short walk. Did you know that exercise can help relieve symptoms of depression?
- Focus on the Positives – Today is a gift. That is why it’s called the present! Being positive and practicing gratitude has a strong positive impact on psychological well-being. It increases self-esteem, enhances positive emotions and makes us more optimistic.
- Keep Expectations Manageable – Try to set realistic goals for yourself and your family. Pace yourself. Organize your time and make a list and prioritize the important activities.
- Let People Close to You Know What’s Going On – Don’t try to hide your holiday depression from your friends and family. Hiding your problem can make your mental health worse. Instead, be honest with them and let them know what you are going through and make sure you let them know that you don’t expect them to make it better.
- Seek Professional Help if You Need It – You may find yourself feeling persistently sad or anxious, unable to sleep, unable to face routine chores or irritable and hopeless despite your best efforts. If these feelings last for a while, talk to your doctor or a mental health professional.
Avoid beating yourself up if you are not full of the “joy of the season.” With some planning, self-care and social connections, it’s possible to tackle depression around the holidays and still enjoy the season. Be gentle with yourself, have realistic expectations, and don’t abandon your healthy habits just because it’s the holiday season. By actively working to manage your mental health, you will be able to make the best of the holidays!
If you are experiencing these symptoms over a period of several weeks, you may be depressed. Talking with a mental health professional or taking a mental health screening test can help you understand how well you are coping with recent events. Seek help.
by admin | Nov 30, 2021 | Flexible Spending Accounts
The end of the year is drawing near which may mean you have some extra money to spend.
No, you didn’t read that wrong. Many Americans have money in their Flexible Savings Accounts (FSAs) that they need to use up before the end of the year. FSAs provide the benefit of putting pre-tax money aside which optimizes your money. Your FSA is set up through your employer and everyone’s rules are a little different. However, most plans run January 1 – December 31. Some companies allow their employees to roll over a set amount into the new year. Checking with your HR department will help you maximize your hard-earned money.
Typically, FSA money has to be used by the end of the year but the COVID-19 relief bill gets you one more year to spend. That means you have until December 31, 2021 to spend FSA money earmarked for last year. The extension also applies for your 2021 FSA money – the credit will be available until the end of 2022.
All funds remaining in the account at the end of the grace period are forfeited according to the “use-it-or-lose-it” rule, which requires all remaining funds in an FSA to be forfeited at the end of the plan year.
If you have FSA money to spend, we’ve compiled a list of some ways to use up your hard-earned FSA dollars that you may not have thought possible:
Fill Your Medicine Cabinet
You can once again purchase over the counter medication with FSA money thanks to the CARES Act. You can stock up on first aid kits or other items that don’t require a prescription such as:
- Bandages
- Heating pads
- Contraceptives
- Fertility and Pregnancy Tests
- Sleep aids such as Melatonin or a sleep mask
- Motion sickness medication
- Headache medicine
- Antacids or heartburn medication
- Menstrual products
- Contact Solution
- Allergy medication
- Acne creams and cleansers
Alternative Therapies
Under IRS law, certain alternative therapies are eligible for reimbursement. Acupuncture and chiropractic care, alternative medicinal treatments, and herbal supplements are a great way to use up your funds for the year and get a little cash back when you most need it.
Dental
Dental benefits often work differently than medical coverage. According to the American Dental Association, this benefit is often capped annually – generally between $1,000 and $2,000. If you have unused funds remaining in your FSA, now may be the time to schedule a last-minute appointment with your dentist, especially if you might need serious work down the road. This way, you can use up the funds remaining in your account by year-end and reduce your out-of-pocket expense next year.
Prescription Refills
Refilling your prescription medications at year end are a great way to use up your funds in your medical FSA. Take inventory of your prescription drugs, toss out expired ones, and make that call for a refill to your doctor or pharmacy.
Medical Equipment and Supplies
Medical equipment and supplies are eligible for reimbursement under a medical FSA. Walking aids like canes, walkers and crutches, blood pressure monitors, thermometers, and joint braces are just a few. Please note that some will require a note or prescription from your doctor.
Mileage and Other Healthcare-Related Extras
Traveling to and from any medical facility for appointments or treatment for yourself or a dependent are eligible for reimbursement under your FSA. This not only includes traveling by your own vehicle, but also by bus, train, plane, ambulance service and includes parking fees and tolls. However, transportation expenses are not eligible with a Dependent Care Flexible Spending Account (DCFSA).
Family Planning
You can put your FSA dollars to work if you are a new or soon-to-be mom on products such as pregnancy tests, fertility monitors, prenatal vitamins and breastfeeding supplies. On the flip side, condoms and other contraceptives are also FSA eligible.
Nicotine Cessation Products
If you are trying to quit smoking, you can use your FSA funds toward nicotine gum, patches, lozenges, inhalers and nasal sprays.
Dependent Care
If you have opted to contribute to a DCFSA, you can get reimbursed for day care, preschool, summer camps and non-employer sponsored before and after school programs. In addition, funds contributed to this type of FSA can be used for elderly daycare if you’re covering more than 50% your parent’s maintenance costs.
Ancestry Kits with Health Reports
Interested in learning about your heritage and how your DNA can affect your health? You are in luck! Ancestry kits like 23andMe that include health reports are typically considered FSA eligible to be reimbursed approximately 50%.
People often don’t use their FSA out of fear that they need to save it for later. However, every year $400-500 million in FSA funds is forfeited. Lost cash is never a good thing. If you still have leftover funds, consider going to the FSA Store where you can find hundreds of eligible items and pay for them with your account dollars without ever leaving your house.
This list is not an exhaustive list of ways to spend your FSA money. Check with your HR department and insurance agent if you have questions about qualified expenses.
by admin | Nov 22, 2021 | Human Resources
The Americans with Disabilities Act (ADA) applies to employers with 15 or more employees. Despite its broad coverage, there’s a lot of confusion about what the law requires and what its terms entail. A big reason for this confusion is the language of the law itself; the ADA speaks of nebulous concepts like undue hardship and reasonable accommodation. Words like undue and reasonable are by their nature open to some interpretation, which is not exactly a comfort to employers.
Fortunately, employers can feel confident in their application of the law by reviewing and understanding its most important concepts. In this article, we’re going to define and analyze the terms disability, undue hardship, reasonable accommodation, and interactive process. These are the big four terms that serve as the foundation of your responsibilities as an employer under the ADA.
Disability
Let’s start with the term disability. Under the ADA, a person with a disability is someone who:
- Has a physical or mental impairment that substantially limits one or more major life activities;
- Has a record of such an impairment; or
- Is regarded as having such an impairment.
Major life activities include caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working. A major life activity also includes the operation of a major bodily function, such as digestive, circulatory, and reproductive functions.
Although determining whether an impairment meets the definition of disability is an individualized assessment, some conditions “virtually always qualify.” For example, according to the EEOC, deafness substantially limits hearing; HIV substantially limits immune function; and bipolar disorder substantially limits brain function. Other conditions may vary from case to case in whether they substantially limit a major life activity.
It’s important to note that the definition of disability is broad. After the ADA was originally passed, the courts interpreted the definition very narrowly, and Congress responded by amending the ADA in 2008 so that more disabilities are covered. If an employee asks for an accommodation because of a physical or mental condition, it often won’t be hard for them to show that the condition substantially limits a major life activity.
Reasonable Accommodation
Employers often encounter the ADA when an applicant or employee asks for a reasonable accommodation. A reasonable accommodation is a change to the workplace or the job application process so that people with disabilities can perform the essential functions of their job, access employment benefits, or be considered for a job they’re qualified for. The intent of reasonable accommodations is to remove workplace barriers for people with disabilities—barriers that don’t prevent people without disabilities from performing the work or applying for the job. But don’t focus too much on the word reasonable; in the context of disability accommodations, reasonable means feasible or plausible.
Common types of accommodations include modifying work schedules, altering the way job duties are done, re-assigning a non-essential job duty (like asking the receptionist to stack the monthly 100-lb paper delivery in the storage room), granting additional breaks, providing accessible parking, and providing materials in alternative formats (e.g., Braille, large print). Another type of accommodation is a temporary leave of absence. Although a bit counterintuitive (because the employee isn’t working while on leave), the theory with a leave as an accommodation is that the time off will enable to employee to perform the essential functions of their job when they return.
Not every requested accommodation is required, however. For one, employers don’t have to remove an essential job function (e.g., the receptionist can still be expected to answer the phone). Employers also aren’t required to provide items for personal use, like wheelchairs or hearing aids. And, as we turn to next, an accommodation doesn’t have to be provided if it causes an undue hardship.
Undue Hardship
Under the ADA, an employer is not required to provide reasonable accommodations to employees or applicants with disabilities if doing so creates an undue hardship on the organization. The basic definition of undue hardship is an action that creates a significant difficulty or expense. Generally, this is a high standard to meet.
The cost of an accommodation could be an undue hardship on the employer, but so could an accommodation’s duration or disruption. An accommodation that would fundamentally alter the nature or operation of the business would be an undue hardship even if the cost was negligible. But if cost alone is the basis for claiming undue hardship, employers should remember that the standard is a significant expense.
Undue hardship is determined on a case-by-case basis, considering the following factors:
- The nature and net cost of the accommodation, including the availability of tax credits and deductions, as well as outside funding;
- The overall financial resources of the facility providing the accommodation, the number of employees at the facility, and the effect of the accommodation on expenses and resources;
- The employer’s overall financial resources, size, number of employees, and the number, type, and location of its facilities;
- The type of operation of the employer, including the composition, structure, and functions of the workforce, and the geographic separateness and administrative or fiscal relationship of the facility providing the accommodation; and
- The impact of the accommodation on the operation of the facility, including the impact on the ability of other employees to perform their duties and the impact on the facility’s ability to conduct business.
An employer can’t claim undue hardship based on employee or customer fears or prejudices toward the disability. An undue hardship also can’t be based on the possibility that an accommodation could reduce employee morale.
Interactive Process
The interactive process is an ongoing conversation between the employer and employee to explore potential accommodations so that the employee can perform their essential job functions or access the benefits or privileges of their job.
Basically, the interactive process starts with brainstorming. The employee—and in some cases their medical provider—is often the best source for accommodation options. However, the employer should do some research too, for example, by searching for the disability or functional limitation on the Job Accommodation Network website.
Next, the employer chooses an accommodation from all the options. Employers should give consideration to which accommodation the employee prefers, but, at bottom, whatever accommodation they choose must be effective. If it’s not clear initially, the employer can implement an accommodation for a trial period to determine whether it’s effective. If that accommodation doesn’t work, employers should then try a different accommodation. In addition, circumstances may change over time, so the best practice is to keep an open dialogue with the employee to see if further adjustments are needed throughout the employment relationship.
By Megan LeMire
Originally posted on Mineral
