The Payroll Report: April 23 to 27


PayClocker

Here is a roundup of payroll issues covered in the past week:

Federal

This week, the IRS announced that individuals with family coverage under a high-deductible health plan may treat $6,900 as the maximum deductible health saving account contribution for 2018.

The maximum contribution was reduced to $6,850 on March 2 because of a change in the inflation adjustment calculations for 2018 under the Tax Cuts and Jobs Act (Pub. L. 115-97), the IRS said in Revenue Procedure 2018-27.

The Treasury Department and the IRS were told by holders of health savings accounts that the reduction would impose unanticipated administrative and financial burdens because some had family coverage under an HDHP and had made the maximum contribution before the reduction went into effect, while others had made salary reduction elections based on the $6,900 limit, the agency said.

The American Payroll Association had requested transition relief for employers, citing complications for payroll operations. Including the excess $50 in contributions as taxable income required “an adjustment by previous hitpayrollnext hit departments at a cost to employers that far exceeds $50,” the association said April 6 in a letter to the IRS. 

Taxpayers who contributed more than $6,850, up to the $6,900 maximum, and who have received as a distribution the difference between the two amounts may treat the distribution as a mistake and repay the health savings account without any tax or reporting consequence, the revenue procedure said.

State

New York’s labor department clarified that the hours worked by home-care aides may exclude meal periods and sleep times for those who work shifts of at least 24 hours, according to two notices in the April 25 New York Register that re-adopt an emergency rule and issue proposed rulemaking to codify the department’s interpretation.

The re-adopted emergency rule (LAB-17-18-00005-E) is effective April 25 until June 3. The state labor department said in the notice that it “intends to adopt the provisions of this emergency rule as a permanent rule, having previously submitted to the Department of State a notice of proposed rulemaking.”

The proposed rulemaking (LAB 17-18-00005-P) is accompanied by guidance on how public comment may be provided on the proposed rule. A public hearing is to be held at 11 a.m. on July 11 at the Department of Labor, 55 Hanson Place, Brooklyn, N.Y., the notice said.

Comments on the proposed rule also may be submitted using the guidance contained in the notice until July 16, which is five days after the last scheduled public hearing.

By Jazlyn Williams

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