Tax Law Updates | New Statutes, Regulations, and Rulings
May 3, 2010
IRS Issues Guidance on Tax Treatment of Health Care Benefits for Children Under Age 27
Tax Treatment of Health Care Benefits Provided for Children Under 27
Notice 2010-38, 4/27/2010
The Internal Revenue Service (“IRS,” or “Service”) has issued guidance on the tax treatment of health care benefits provided with respect to children under age 27 under the newly enacted health care law.
According to the IRS. as a result of changes made by the recently enacted Affordable Care Act, health coverage provided for an employee’s children under 27 years of age is now generally tax-free to the employee, effective March 30, 2010.
The IRS explained that these changes immediately allow employers with cafeteria plans –– plans that allow employees to choose from a menu of tax-free benefit options and cash…
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