November 2017

November 2017


We delayed sending our November newsletter (which would typically be sent the last day of the month), until after the Senate vote so that we could provide you with the most up-to-date information on tax reform.

Senate Passes Landmark Tax Reform Legislation

In the early hours of this morning (December 2), the Senate passed landmark tax legislation which, if enacted into law, will impact every individual and business in America. The vote on H.R.1, the Tax Reconciliation Act, was strictly along party lines, 51-49. One Republican, Sen. Bob Corker of Tennessee, voted against passage of the bill.

Up to the time of the final vote, amendments were considered and voted upon. It will take some time to sort out the impact of all of the provisions, but what follows is an overview of the Senate bill that passed this morning, as well as a comparison to the House bill that passed on November 16. When the official version of the modified Senate bill is posted, we will provide a link. The Joint Committee on Taxation issued its economic analysis of the final changes this morning.

Modifying the Individual Tax Brackets  

The Senate bill would retain seven tax brackets for individuals, but would lower the rates to 10%, 12%, 22%, 24%, 32%, 35%, and 38.5%. The top bracket would not be reached for married taxpayers until they have income above $1 million.

Continue reading here.

QSEHRA Guidance Clarifies that Plans May Not Benefit All Employees

On October 31, the IRS issued Notice 2017-67, detailing requirements for the qualified small employer health reimbursement arrangements (QSEHRAs) implemented last December by the 21st Century Cures Act. The law removes from the definition of “group health plan” reimbursement arrangements that follow the law’s requirements. Removing such plans from the definition of “group health plan” means exempting them from the requirements of Affordable Care Act's market reforms, including the “no annual dollar limits” and “no cost sharing for preventive health services.” Thus, by following the requirements of this law, eligible small employers may offer stand-alone HRAs to their employers without being subjected to onerous excise penalty under section 4980D of the Internal Revenue Code.

Although QSEHRAs may be useful for some small employers, for others they may not. The plans are likely most beneficial if employees have individual health insurance under a grandfathered plan. If employees must buy coverage on the Marketplace, the QSEHRA may make them ineligible for a premium tax credit (PTC) or merely reduce the PTC to which they would otherwise be entitled. If an employee has insurance coverage through a spouse’s employer, the QSEHRA may reimburse for those premiums. If the spouse can pay those premiums on a tax-free basis, however, the QSEHRA reimbursement is taxable. In other words, the employer could provide the same economic benefit to the employee by raising wages.

Continue reading here.


Donate to CALT

As you know, our work at the Center is dependent on the fees generated by seminar registrations and gifts. If you would like to donate to further the Center's efforts, please contact our Program Administrator, Micki Nelson at or (515) 294-5217. You can also give online with a credit card. We thank you for your generous support.

CALT does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. CALT's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.

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