IRS NOTICE 2004-79 PDF

Excerpt: This notice provides guidance regarding the effect of the Working Families Tax Relief Act of (WFTRA), Pub. L. No. , On November 17, , the Internal Revenue Service (“IRS”) published Notice (“Notice”), clarifying some confusion over the definition. (IRB ) Corporate distributions of property; distribution by subsidiary Notice (IRB ) Notice withdrawn; IRS to continue.

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Recent legislation provides for the exclusion from Massachusetts gross income of any imputed income resulting from employer-provided health insurance of a person included in the employee’s family health insurance plan where 0204-79 coverage is required by state law.

IRS Notice 2004-79 Clarifies WFTRA Confusion

The child is supported by both his parents. The term “imputed income” is sometimes used to refer to the value of a noncash fringe benefit an employee receives where federal law requires the value of the fringe benefit to be included in the employee’s gross irx.

Pending specific guidance from the Internal Revenue Service, an employer must determine the amount of nogice income attributable to the health insurance coverage of an employee’s nondependent child under valuation principles articulated in federal income tax law.

Collectively, the amendments require that on or after January 1,carriers issuing or renewing insured health benefit plans with coverage for dependents make coverage available for persons “under 26 years of age or for 2 years after the end of the calendar year in which such persons last qualified as dependents under 26 U.

The Massachusetts Health Care Reform Act at chapter 58 ris the Acts ofas amended, changed chapters 32A,A, B and G of the General Laws to require a broadening of dependent coverage offered by health insurance carriers. The child is included in noticd father’s employer-provided health insurance coverage.

The recent legislation provides an exemption for imputed income for Massachusetts personal income tax purposes where health care coverage is required by Massachusetts law.

However, the exclusion is limited to contributions made for coverage of the employee, the employee’s spouse, and the employee’s dependents.

Feedback Did you find what you were 204-79 for on this webpage? Skip table of contents. When does notiec employee’s child meet the nofice of dependent for purposes of employer-provided health insurance coverage so that the entire value of the coverage is excluded from gross income? The purpose of this fact sheet is to provide general guidance on the federal and Massachusetts treatment of employer-provided health insurance coverage for an employee’s child. This TIR focuses on the instances where a child of a taxpayer who is not a “qualifying child” may be a “qualifying relative.

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Employer-provided health insurance coverage is a fringe benefit. Massachusetts General Laws show more show less.

A child of divorced parents, age 25, is a full-time student who lives with his mother. A noncash fringe benefit that is included in gross income is sometimes referred to as “imputed income.

We use your feedback to help us improve this site but we are not able to respond directly. However, pursuant to G. 2004-79 gross income is federal gross income, as defined under the Code, with certain modifications.

Generally, with respect to the personal income tax, Massachusetts adopts the Code as amended and in effect on January noticw, The extent to which a particular fringe benefit is excluded from gross income depends on the Code provisions that apply to the benefit. Section a of the Code provides that gross income of an employee does not include employer-provided coverage under an accident or 2004-97 plan.

So a child may qualify as a dependent for purposes of the exclusion nitice gross income for employer-provided health insurance benefits whether or not the parent actually claims the dependency exemption for the child on the parent’s federal income tax return.

If you need a response, please locate the contact information elsewhere on this page or in the footer. Except in the case of amounts attributable to and not in excess of deductions allowed under section relating to medical, etc.

In Notice, C.

When does employer-provided health insurance coverage for an employee’s child result in imputed income to the employee? Massachusetts Department of Revenue. As of January 1,the Massachusetts Health Care Reform Act expands employer-provided health insurance coverage to include an employee’s child “under 26 years of age or for 2 years after the 204-79 of the calendar year in which such persons last qualified as dependents under 26 U.

For an affected employee, the Massachusetts gross income for the year, as reflected in his or her W-2, will be lower than federal gross income. The father is a Massachusetts resident. The Legislature made several technical corrections to the health care reform law in the recent “Act further Regulating Health Care Access,” St.

IRS Notice Clarifies WFTRA Confusion – Benefits Counsel

In the context of employer-provided health insurance benefits, the following examples illustrate when imputed income occurs and when it does not. As a result, Massachusetts will not follow federal law in the area of imputed income resulting from employer-provided health care fringe benefits. Any child to whom section e applies shall ontice treated as a dependent of both parents for purposes of this subsection.

This can happen, for example, when the child is over age 24 or is emancipated. If a child does not meet the definition of dependent for these purposes, the value of the health coverage for this individual will be imputed as income to the employee for federal income tax purposes. If an employee participates in an employer-provided health insurance plan, any amount which, but for this section, would be included in gross income of the employee by reason of coverage under the plan of any person other than the employee, to the extent such coverage is mandated by law.

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Section 61 a 1 ors the Code states that, except as otherwise provided, gross income includes compensation for services, including fees, commissions, fringe benefits, and similar items. Massachusetts Department of Revenue Referenced Sources: Also, prior to the clarification in the technical corrections Act, the health care reform law required that on or after January 1,carriers issuing or renewing insured health benefit plans with coverage for dependents make coverage available for persons “under 26 years of age or for 2 years following loss of dependent status under the Internal Revenue Code, whichever occurs first.

As explained in TIRwhether a child of an employee is a dependent for purposes of the federal exclusion from gross income of employer-provided health insurance coverage is a question of federal income tax law pursuant to Internal Revenue Code section Where an employee is charged with federal imputed income for employer-provided health coverage, the employee is not charged with the imputed income for Massachusetts purposes where the health care coverage is required by state notics.

Under the terms of the divorce agreement, the mother may claim the federal dependency exemption for him. However, for federal income tax purposes, the value of health insurance benefits for a child of an employee is treated as imputed income in cases where the child does not qualify as a dependent under IRC section Accordingly, under Internal Revenue Service Noticean employee may exclude from gross income the value of employer-provided health insurance coverage for a child who, while not a “qualifying child,” meets the definition of a “qualifying relative” determined without regard to the child’s gross income.

Please do not include personal or contact information. An employer or an employee seeking a case-specific determination on imputed income for federal income tax purposes must contact the Internal Revenue Service. Pursuant to IRS Noticethe definition of “dependent” for purposes of the exclusion from gross income for employer-provided health insurance benefits is broader than the definition for purposes of claiming the dependency exemption for the child 20004-79 the parent’s federal income tax return.