Taxes Reformed, Now What?

Now that the tax reform has passed, how will it impact employers and what does HR need to do to prepare for this new legislation?
By: | December 21, 2017 • 2 min read
tax reform

2017 has been a whirlwind year, and, not to be outdone, the Trump administration has ended it with a bang by passing the tax reform bill. Though Trump and the GOP are celebrating, much is still left to be discussed, such as how will the tax reform impact employers?

According to Geoff Manville, government relations leader at Mercer, a global HR consulting firm, “As the sweeping Republican tax bill heads to enactment, its healthcare and fringe benefit provisions present a mixed bag to employers. Under the legislation, the Affordable Care Act’s individual mandate penalty will be repealed beginning in 2019, potentially taking millions of people out of the individual health care market. The bill will also do away with the employer deduction for qualified transportation fringe benefits and offer a two-year trial program offering tax credits to employers providing certain paid family leave.”

Advertisement




Beginning in the new year, employers can no longer deduct money provided to employees for commuter benefits, including qualified parking and mass transit. Additionally, employers can no longer deduct employees’ pre-tax contributions to these commuter plans.

“The January 1 effective date does not leave much time for employers to decide whether or how to modify their transportation programs given that most employees have already made their elections for this benefit for 2018,” says Tracy Watts, Mercer’s US leader for healthcare reform and senior partner at its Washington D.C. office.

Advertisement