• Forgivable loans and enhanced expense deduction relief. Forgivable loans and advance tax deduction opportunities are again available through Treasury and the Small Business Association Programs. Generally, some of these provisions permit employers to claim a tax deduction for business expenses covered by forgivable loans obtain through the above referenced programs.
• Employee retention incentive credit. The employee retention credit included in CARES will remain available until July 1, 2021, the credit percentage is increased from 50% to 70%, the per employee limit on qualifying wages is increased to $10,000 per quarter, and eligibility for qualifying employers has also been expanded.
• Paid Sick and Family Leave incentive credits. Paid Sick and Family Leave tax credits remain available for employers until March 31, 2021. The mandate in this regard has not been extended.
• Employer payroll tax obligation deferral. The ability for employers to defer their obligation to withhold and pay certain employee payroll taxes was extended to Dec. 31, 2021 from April 30, 2021. This opportunity was initially introduced in a presidential memorandum and described further in IRS Notice 2020-65.
• Enhanced restaurant expense deductions. Restaurants can deduct 100% of their food and beverage business expenses. This applies to expenses incurred after December 31, 2020 and before January 1, 2023.

Below are the notable flexible spending arrangement (“FSA”) provisions available for inclusion in cafeteria plans. The inclusion of these provisions are not required. Employers can decide to include this provisions in their plans retroactively as long as they are adopted before the last day of the first calendar year after the year in which the change is to become effective within the plan. Additionally, the plan would have needed to be operated consistent with the retroactive change from the date of the amendment and the date the amendment is adopted.

• Expanded unused balance carry over. Health and dependent care FSA participants can carry over unused balances from a plan year ending in 2020 to a plan year ending in 2021 and from a plan year ending in 2021 to plan year ending in 2022.
• FSA grace period extension. A health and dependent care FSA grace period for plan years ending in 2020 or 2021 can be extended for 12 months after the end of the respective plan year.
• Post termination Health FSA reimbursements. Employees that are terminated from service or otherwise leave their FSA plan during 2020 or 2021 can continue to take reimbursements for qualifying expenses from the unused assets in their FSA accounts through the end of the plan year in which they left the plan, include the grace period referenced immediately above.
• Extension of Dependent Care FSA reimbursement availability. For the remainder of the applicable plan year and in the following plan year, if a balance remains, until the qualifying child turns 14, Dependent care FSA participants can continue to take reimbursements for the childcare expenses of a 13 year old child, turning 13 during the pandemic. The plan year described above must have had a regular enrollment period that was on or before January 31, 2020.
• FSA election change expansion. Health and dependent care FSA election changes will be permitted regardless of whether the employee has a permitted change event, for all plan years ending in 2021. This relief was initially provided for in IRS Notice 2020-29.
• Student loan payment reimbursement extension. The CARES provision allowing employers to pay qualified student loan payments tax-free through its employer education assistance program (up to $5,250 annually) is extended to payments made before January 1, 2026, instead of January 1, 2021.

• Partial plan termination relief. A plan will not be deemed partially terminated, thereby avoiding the 100% vesting requirement, in any plan year that includes the period beginning March 13, 2020 and ending March 31, 2021, provided that the number of active participants covered by the plan on March 31, 2021 is at least 80 percent of the active participants on March 13, 2020.
• Disaster relief codification. The Act provides special disaster related distribution and loan rules (similar to the CARES Act and other natural disasters – such as $100,000 distribution right, 10% penalty tax relief, increase in loan limits, loan suspensions, repayment options, return of withdrawals for home purchases) for FEMA declared disasters (other than COVID-19) from January 1, 2020 through 60 days after enactment of the Act. This applies to distributions made through 180 days after enactment.
• Coronavirus-Related Distributions (“CRDs”) expanded to Money Purchase Plans. CARES was retroactively amended to permit CRDs from Money Purchase Plans. Consequently, it may be possible for participants that took a distribution from a money purchase plan, between March 27, 2020 and December 31, 2020, to recontribute that amount to their plan as a CRD repayment if those distributions would have otherwise qualified as a CRD.
• Section 420 DB plan transfers. Employers making “qualified future transfer” to transfer excess defined benefit plan assets to cover future retiree health/life insurance costs to elect, to terminate that transfer and restore the unused funds to the plan, subject to certain conditions if that election to terminate is made by December 31, 2021. This election results in a taxable reversion if not restored to the health/life account within 5 years following the original transfer period.
• Narrow DB in-service distribution age change. In-service distribution age lowered in Certain DB Plans for certain employees in the building and construction industry. Age lowered from 59 ½ to 55.

• E-Delivery. This Act also contained a request that the DOL issue a report to assess the impact of their new e-delivery regulation on rural and remote areas and seniors etc. This request suggest that there are forces in Congress that may be seeking to reverse the e-delivery process achieved in 2020.
• Section 7702 reform. As summarized by Ways and Means, “[t]o qualify as life insurance contracts for tax purposes, permanent life insurance policies must meet several requirements under Internal Revenue Code, including two fixed interest rates that were last adjusted in 1984. This provision updates these outdated fixed interest rate assumptions, and fixes the problem going forward by tying the rates to one of two benchmark interest rates that are periodically updated.”