(Alert from SHRM)
On December 16th the U.S. House of Representatives passed H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, by a margin of 277-148. This bill extends many provisions within the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) for a 2-year period. The Senate previously passed the bill, which now awaits President Barack Obama’s signature. The bill will prevent many tax increases from occurring January 1, 2011. The below list of provisions are of particular interest to SHRM members, HR professionals and employers:
Section 127, Employer-Provided Education Assistance – Allows employees to use up to $5,250 in employer-provided tuition assistance – tax-free – for graduate, undergraduate or certificate level education and training. NOTE: This is an important victory for SHRM and the coalition it led to extend Section 127.
Deductible Education Expenses – Allows assistance from certain scholarship programs to be excluded from income. Qualified tuition reductions for certain education provided to employees are also excludable from income.
Federal Unemployment Benefits – Extends benefits for an additional 13 months, through December 2011, and maintains the current cap of 99 weeks of total benefits.
Employer-Provided Child Care Credit – Allows a credit of 25 percent for childcare expenses and 10 percent for child care resources (not totaling more than $150,000) for acquiring, constructing, rehabilitating or expanding property which is used for a child care facility.
“Make Work Pay” Credit – Terminates the credit and replaces it with a 1-year payroll tax reduction that will reduce the employee share of the FICA payroll tax by almost one-third, by 2 percentage points – down to 4.2 percent. For IRS guidance regarding the 2011 payroll…
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