Employee Benefit Changes in the Tax Cuts and Jobs Act of 2017
On December 22, 2017, President Trump signed what is popularly known as the Tax Cuts and Jobs Act (H.R. 1) (the "Bill"), overhauling America's tax code for both individuals and corporations and providing the most sweeping changes to the U.S. Tax Code since 1986. The House and Senate Conference Committee provided a Policy Highlights of the major provisions of the Bill, and the Joint Committee on Taxation provided a lengthy explanation
of the Bill.
Compared to initial proposals, the final Bill generally does not make significant changes to employee benefits. The chart that follows highlights certain broad-based health and welfare, fringe and retirement plan benefit provisions of the Bill (comparing them to current law). Notable changes include:
Repeal of the Individual Mandate penalty beginning in 2019;
Elimination/changes of employer deductions for certain fringe benefits, including qualified transportation fringes, moving expenses, and meals/entertainment;
New tax credit for employers that pay qualifying employee while on family and medical leave, as described by the Family Medical Leave Act;
Extended rollover periods for deemed distributions of retirement plan loans; and
Tax relief for retirement plan distributions to relieve 2016 major disasters.