News & Notes - Page 3 of 21 - Catholic Benefit Plans

For the ERTC, with an Eligible Employer who sponsors a health reimbursement arrangement (HRA), a health flexible spending arrangement (FSA), or a qualified small employer health reimbursement arrangem

HRA and FSA = Yes. QSEHRA = No. The amount of qualified health plan expenses may include contributions to an HRA (including an individual coverage HRA), or a health FSA, but does not include contributions to a QSEHRA. To allocate contributions to an HRA or a health FSA, Eligible Employers should use the amount of contributions […]

For the ERTC, when an Eligible Employer that sponsors a fully-insured group health plan, how are the qualified health plan expenses of that plan allocated to the qualified sick or family leave wages o

This is a challenging issue that the employer should probably consult an expert about. n Eligible Employer who sponsors a fully-insured group health plan may use any reasonable method to determine and allocate the plan expenses, including the COBRA applicable premium for the employee typically available from the insurer, one average premium rate for all […]

For the ERTC, with an Eligible Employer who sponsors a self-insured group health plan, how are the qualified health plan expenses of that plan allocated to the qualified leave wages on a pro rata basi

An Eligible Employer who sponsors a self-insured group health plan may use any reasonable method to determine and allocate the qualified health plan expenses, including (1) the COBRA applicable premium for the employee typically available from the administrator, or (2) any reasonable actuarial method to determine the estimated annual expenses of the plan. If the […]

This area of the aggregation rules is highly complex, so it is important that any prospective client should discuss eligibility with their own counsel first. Solely for the purposes of this tax credit, tax exempt organization are required to aggregate when they are part of a controlled group of organizations. Being in a controlled group […]

For the ERTC, What if the employer has two health plans? For example, both a group health plan and a health flexible spending arrangement (FSA)), how are the qualified health plan expenses for each em

The qualified health plan expenses are determined separately for each plan. Therefore, for each plan, those expenses are allocated to the employees who participate in that plan. In the case of an employee who participates in more than one plan, the allocated expenses of each plan in which the employee participates are aggregated for that […]

For the ERC, How does an employer determine if the part of the business that was suspended is enough to qualify the entire business for the tax credit?

The law provides that the part of business operations that must be affected by a government order to qualify that business for the ERC must account for more than a “nominal portion” of its business operations. Solely for purposes of the employee retention tax credit, a portion of an employer’sbusiness operations will be deemed to […]

For the ERTC, Does the amount of qualified health plan expenses include both the portion of the cost paid by the Eligible Employer and the portion of the cost paid by the employee?

The amount of qualified health plan expenses taken into account in determining the credits generally includes both the portion of the cost paid by the Eligible Employer and the portion of the cost paid by the employee with pre-tax salary reduction contributions. However, the qualified health plan expenses should not include amounts that the employee […]

Helping Catholic Religious on the Diocesan Plan

Many dioceses have members of religious orders that are covered by the diocesan health plan. This can raise some unique concerns, including: TAX: Tax implications for the individual religious member. CLAIMS: For a self-funded diocesan plan, the cost of these members’ claims can be significant. THERE’S A BETTER WAY TO PROVIDE COVERAGE: In most cases, […]

Church-controlled Organizations may Disaggregate from the Church for Employee Retention Tax Credit Purposes.

March 6, 2023
Eric Allen Kauk, Esq., LL.M.
controlled group rules, tax, tax credits

Churches & Church-related Organizations can Receive Large Refund Checks from the IRS The Employee Retention Tax Credit (ERTC) presents an opportunity for employers to receive a stimulus-like incentive in the form of a refundable tax credit for every employee that they employed from the second quarter of 2020 to the 3rd quarter of 2021. Specifically, […]

Applying the IRS Aggregation Rules to Dioceses when Massive Tax Credits are at Stake.

The Employee Retention Tax Credit (ERTC) has created lively and spirited conversations between diocesan Chief Financial Officers (CFOs) about the Internal Revenue Service (IRS) aggregation rules. These debates about whether, and under what method a diocese must aggregate with related employers (like parishes, charities, schools, colleges, hospitals, etc.) are important. As most dioceses are aware, […]