Lancaster Law Blog : Lancaster PA Lawyer & Attorney : Russell Krafft & Gruber Law Firm : Pennsylvania : Lancaster's Legal Link

• Email This
• Print
• Comments
• Trackbacks

The writer of Ecclesiastes did not have tax law in mind when he said that there is a time to live and a time to die. However, because Congress did not act to extend the current federal estate tax law, the tax expires on December 31. The federal estate tax is scheduled to resurface in 2011 at a rate of 55% on estates valued at $1 million or higher.

During the time that the tax is not in effect, it will be replaced by a 15% capital gains tax on inherited property that is sold (subject to the taxpayer's right to use current values to save at least $1.3 million of assets from capital gains).

In short, there is great uncertainty regarding estate taxes which probably will not be resolved until some time next year. At that time, Congress could reauthorize the estate tax, possibly retroactive to January 1. Such a law, even though retroactive, could be constitutional.

On the other hand, perhaps this is the ideal time persons with a substantial estate should do the right thing for their families by reviewing their estate planning documents.

• Email This
• Print
• Comments
• Trackbacks

The United States Department of Labor's Employee Benefits Security Administration released two new resource links on the COBRA Continuation coverage.

• Fact Sheet: COBRA Premium Reduction
• COBRA Premium Reduction Extension Provision

According to the United States Department of Labor (DOL) the FAQ and other information will be updated sometime this week. If you are interested in receiving immediate updates from the DOL, consider subscribing to their COBRA webpage. By subscribing you can receive notification when the site is updated with new information. 

• Email This
• Print
• Comments
• Trackbacks

Legislation enacted by Congress and signed by President Obama on December 21, 2009, extends the ARRA COBRA premium reduction eligibility for two months, from December 31, 2009 to February 28, 2010, and increases the maximum period for receiving the subsidy to a total of 15 months instead of 9 months. 

With the new changes, the law provides that the 65% premium subsidy for COBRA continuation health benefits is available to individuals who are eligible for COBRA as a result of an involuntary termination between September 1, 2008 and February 28, 2010. The law previously required that both the involuntary termination and the eligibility for COBRA coverage occur before the last effective date of the subsidy, but now only the involuntary termination need take place on or before February 28, 2010, not the COBRA eligibility.

Last month, when we posted on the duration of the COBRA ARRA subsidy, we noted that legislation was introduced to extend the deadline for eligibility as well as the duration of the subsidy. The change enacted this month was not a result of passage of the October legislation but rather changes added to the Department of Defense 2010 Appropriations Act.

• Email This
• Print
• Comments
• Trackbacks

'Tis the season to be jolly, at least that is what we are told. With the stresses that accompany last minute shopping, crowded malls, rising credit card debts and dysfunctional family members, finding that holiday jolliness can be difficult at times. To help you find that holiday joy, I have combed the web for some light-hearted legal bits related to the holiday season. And yes, you may find this hard to believe, but sometimes lawyers can actually be funny. Admittedly, it doesn't happen often, but it does indeed happen.

• "The Night Before Christmas" in legal-speak. Sadly, this piece is not that big of an exaggeration as to how lawyers write in legal documents. There's also an alternate version.
• In the same vein, here is a politically correct and legalese version of a Christmas card  and a holiday email, both from an attorney.
• Want to rock around the Christmas tree lawyer style? Then this website is for you! I'll bet these CDs just fly off the shelves. Seasons Briefings!
• Ever wondered what it would be like to see the detectives on "Law and Order" interrogate Santa? You're in luck -- here you go! I hope Santa was read his Miranda warnings or his confession may be inadmissible in court.
• Here's an amusing Christmas letter from a lawyer's son. I have a feeling this kid is going to end up with lumps of coal in his stocking.

From all of us at the Lancaster Law Blog, Merry Christmas, Happy Hanukkah and Season's Greetings!

• Email This
• Print
• Comments
• Trackbacks

The Internal Revenue Service has announced a new standard mileage rate for 2010, which is generally used to estimate the costs of operating an automobile for tax purposes. The new rate, effective January 1, 2010, is 50 cents per mile, down 5 cents from last year. In addition, the standard mileage rate for medical or moving and medical expenses has been lowered to 16.5 cents per mile, and the rate for charitable purposes remains at 14 cents per mile.

While there are generally no Pennsylvania laws requiring employers to use the IRS' rate, there may be some tax advantage for doing so. The IRS will deem employers who make qualifying reimbursements up to 50 cents per mile as meeting their accounting requirements, thus no income reporting or withholding is required for those reimbursements. However, employers need to make sure that their employees have provided adequate proof that the mileage was strictly for business use. Qualifying employees who are not reimbursed for their business mileage will be able to deduct 50 cents per mile on their individual tax returns.