Other Miscellaneous Tax Relief for Covid-19

MISCELLANEOUS TAX RELIEF

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Other Miscellaneous Tax Relief for Covid-19

MISCELLANEOUS TAX RELIEF

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Several miscellaneous tax relief have been announced in response to COVID-19 Pandemic’s grappling effects to businesses and individuals.

HSA HIGH-DEDUCTIBLE HEALTH PLANS CAN COVER CORONAVIRUS COSTS

The IRS has provided emergency relief for health savings accounts (HSAs) and COVID-19 health plans costs to remove barriers for testing and treatment of COVID-19. Under this relief, health plans that otherwise qualify as high-deductible health plans (HDHPs) will not lose that status merely because they cover the cost of testing for or treatment of COVID-19 before plan deductibles have been met. In addition, any vaccination costs will count as preventive care and can be paid for by an HDHP. This relief applies only to HSA-eligible HDHPs.

HSAs and HDHPs

Eligible individuals can deduct contributions to HSAs. An HDHP is a health plan that satisfies certain requirements, including requirements with respect to minimum deductibles and maximum out-of-pocket expenses. One requirement to qualify as an individual is to be covered under an HDHP and have no disqualifying health coverage.

HDHP Requirements Satisfied for COVID-19

A health plan that otherwise satisfies the requirements to be an HDHP will not fail to be an HDHP merely because the health plan provides medical care services and items purchased related to testing for and treatment of COVID-19 prior to the satisfaction of the applicable minimum deductible. As a result, the individuals covered by such a plan will not fail to be eligible individuals merely because of the provision of those health benefits for testing and treatment of COVID-19.

Relief

This relief applies only to HSA-eligible HDHPs. Employees and other taxpayers in any other type of health plan with specific questions about their own plan and what it covers should contact their plan. This relief also provides flexibility to HDHPs to provide health benefits for testing and treatment of COVID-19 without application of a deductible or cost sharing.

Individuals participating in HDHPs or any other type of health plan should consult their particular health plan regarding the health benefits for testing and treatment of COVID-19 provided by the plan, including the potential application of any deductible or cost sharing.

CUSTOMS OR IMPORT

Guidance for Distilled Spirits Plants (DSPs) and Industrial Alcohol User permittees on producing hand sanitizers

The U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) issued a release announcing that it was waiving certain excise tax provisions with regard to distilled spirits that are used in the production of hand sanitizers.

  • Existing beverage DSPs and alcohol fuel plants (AFP) can immediately commence production of ethanol-based hand sanitizer without first having to obtain authorization or formula approval.
  • DSPs and AFPs can supply distilled spirits (ethanol) for use in the manufacture of hand sanitizer to other permittees without having to obtain authorization first.
  • Industrial alcohol users may procure increased amounts of denatured ethanol and can use denatured ethanol to manufacture hand sanitizer without first obtaining formula approval.
  • The hand sanitizer produced must meet certain World Health Organization standards and other standards listed in the TTB release. 

The TTB release notes that hand sanitizers made with denatured ethanol are not subject to federal excise tax. However, if the hand sanitizer is made with undenatured ethanol, federal excise tax applies.

These measures are generally authorized under authorities that apply in disaster situations, and as a result, are initially approved through June 30, 2020, with the possibility for extension as necessary.

WE’D LOVE TO HELP.

We will continuously update you regarding evolving news surrounding legislative and administrative issuances dedicated to relieve the general public of the effects of COVID-19. Stay tuned with the advisory bulletin. For immediate clarifications, please contact us at taxteam@scrubbed.net or discuss it with your Scrubbed professional.

Disclaimer

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. It is not intended to be relied upon as accounting*, tax, or other professional service. Please refer to your advisors for specific advice. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.