Conferees Get to Work Hashing Out Differences in House and Senate Tax Bills

Kathleen Coulombe By Kathleen Coulombe December 8, 2017

Earlier this week, House and Senate leadership named members to serve on a conference committee that will work to reconcile the differences between the House- and Senate-passed tax bills. Once completed, the conference agreement will then be voted on by each congressional chamber before it advances to President Donald Trump for his signature.

The House and Senate versions of H.R. 1, the Tax Cuts and Jobs Act, did not make any adverse changes to the tax treatment of defined contribution retirement plans. However, the House bill contained two policy provisions that SHRM has advocated in favor of for several years—improving the guidance related to nondiscrimination testing for defined benefit pension plans and allowing employees additional time to pay back loans from their defined contribution retirement plan should they be separated from employment unexpectedly.

While the legislation contains these positive changes to retirement plans, the tax-free status of other vital benefits—including employer-provided education assistance, qualified tuition reduction arrangements, adoption assistance, moving expenses, employee achievement awards and dependent care flexible spending accounts—face elimination. Areas that would impact the workplace include: 

  • Elimination of employer-provided education assistance (IRC Section 127). The House bill eliminates the tax exclusion that allows employers to provide up to $5,250 of education assistance per year, tax free, to their employees at the undergraduate, graduate or certificate level.
  • Elimination of qualified tuition reduction programs (IRC Section 117). The House bill eliminates the tax exclusion for educational assistance for employees, their spouses or their dependents at educational institutions.
  • Elimination of employer-provided benefits. Both bills eliminate certain tax exclusions for employee benefits, including adoption assistance, moving expenses, child care and employee achievement awards.
  • Phase-out of dependent care flexible spending accounts. The House bill sunsets the tax exclusion for employer-provided dependent care accounts after 2022.

SHRM sent a letter to conferees this week urging them to preserve employer-provided benefits, including Section 127, Section 117 and dependent care flexible spending accounts. SHRM continues to work with members of the SHRM-led Coalition to Preserve Employer-Provided Education Assistance and the SHRM Advocacy Team (A-Team) to advocate for the preservation of these important benefits. 

Review a side-by-side comparison of all the HR-related provisions in the House and Senate bills.

Advocate in support of employer-provided benefits, including education assistance. 


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