21 Dec New Law Extends Tax Breaks
Source: Business Insurance
By Jerry Geisel
President Barack Obama [last week] signed tax cut legislation that would extend the tax-favored status of several employer-provided benefits.
The bill, which the House passed late Thursday on a 277-148 vote, cleared the Senate Wednesday.
Under H.R. 4853, Section 127 of the tax code, which allows employers to reimburse employees for up to $5,250 in annual undergraduate and graduate educational costs without the reimbursement being included in employees’ taxable income, would be extended through Dec. 31, 2012.
The measure also would continue through the end of 2012 a section of a 2001 law due expire at year-end in which employers are eligible to receive a tax credit equal to 25 percent of expenses for developing and operating child care centers as well as a tax credit of 10 percent on expenses for child care and referral services.
Under another provision, Section 137 of the Tax Code, which allows employers to provide tax-free reimbursement to employees of about $13,000 of adoption-related expenses, would be extended through the end of 2012. The tax break now expires at the end of next year.
In addition, the measure would extend through Dec. 31, 2011, a provision in a 2009 economic stimulus law that allows employees to reduce their salaries and make pretax contributions of up to $230 a month to pay for mass transit expenses. Without an extension, the monthly maximum contribution would be reduced to the prior limit of $120, effective Jan. 1, 2011.