|
In October, President Bush signed the Working Families Tax Relief
Act of 2004 (WFTRA). The new law changes the definition of dependent
by providing a uniform definition of “child” for several
tax purposes, including pre-tax contributions to health plans and
flexible spending accounts. The new law becomes effective January
1, 2005.
For more information see the EBS/Atlanta
Newsletter, November 2004. HR professionals are questioning
what to do, since many have already completed their open enrollment
periods. The major issue affecting spending accounts is in the area
of Dependent Care for the purpose of Elder Care. If the Elder Care
individual will receive a pension over $3,100, the person would
not be a “qualifying relative” according to the new
law. Employers will have to determine which employees are using
Dependent Care Spending Accounts for Elder Care and advise them
of the new changes. If the employer has already had their open enrollment
period, employees affected by the new law should have the opportunity
to undo those elections.
|
