In a rare New Year’s Eve/New Year’s Day session, Congress passed the American Taxpayer Relief Act of 2012 (H.R. 8), preventing the U.S. from going over the impending “fiscal cliff”. President Barack Obama is expected to sign this bill shortly. The legislation extends permanently a number of tax provisions that had already expired at the end of 2011 and 2012, revises tax rates on income for married couples filing jointly at $450,000 and single $400,000 of taxable income, modifies the estate tax, and extends unemployment benefits, Medicare payments and farm subsidies. Additionally, the bill delays the sequestration provisions established by Congress in 2011 until March 27, 2013. The delays to sequestration provisions will allow lawmakers time for further negotiations on deficit reduction and the extension of the debt limit or borrowing authority of the federal government.
Specifically, H.R. 8 contains a number of provisions of importance to the HR profession:
- Permanently extends employer-provided education assistance (Section 127 of the Internal Revenue Code), which allows an employee to exclude from income up to $5,250 per year in educational assistance at the undergraduate and graduate level regardless of whether the education is job-related.
- Permanently extends the increase in the monthly exclusion for employer-provided transit and vanpool benefits.
Extends federal emergency unemployment benefits for one year.
- Reinstates and extends the Work Opportunity Tax Credit through 2013.
- The legislation does not include an extension of the 2 percent payroll tax cut of the Social Security (FICA) employee tax.
SHRM has been very active throughout 2012 on a variety of important issues directly affecting the HR profession. Most recently, SHRM has taken the lead for the employer community before Congress on such issues as employer-provided education assistance, employer-provided on-site childcare and employer-provided retirement plans, which were all included in the American Taxpayer Relief Act of 2012. SHRM has advocated for the past ten years for the permanent extension of Section 127 and is a proud co-chair of the Coalition to Preserve Employer Provided Education Assistance, a broad-based group representing business, labor and education organizations dedicated to making Section 127 a permanent tax benefit. Throughout the year, we’ve communicated directly with members of Congress and their staffs, brought hundreds of SHRM members to Capitol Hill to share their views and expertise with congressional offices, and generated thousands of letters on critical issues. SHRM Vice President of Government Affairs, Mike Aitken in a letter urged Congress to pass a bill that would include provisions to support the HR profession and to avoid plunging over the fiscal cliff. Click HERE to see a copy of that letter, and to see how House and Senate Members of Congress voted on the American Taxpayer Relief Act of 2012 (H.R.8).
If you have any question regarding SHRM’s efforts in these areas, please contact Kathleen Coulombe at Kathleen.Coulombe@shrm.org.