With another school year now in full swing, the Internal Revenue Service reminds parents and students that now is a good time to see if they will qualify for either of two college tax credits or any of several other education-related tax benefits when they file their 2014 federal income tax returns.

3. Technical Guidance

Notice 2014-49 describes a proposed approach to the application of the look-back measurement method, which may be used to determine if an employee is a full-time employee for purposes of Section 4980H of the Internal Revenue Code, in situations in which the measurement period applicable to an employee changes. This notice is intended to address the topics for which guidance was anticipated in section VII.G of the preamble to the final Section 4980H regulations (79 FR 8544, 8563 (Feb. 12, 2014)).

Notice 2014-54 provides guidance on the allocation of pre-tax and after tax amounts when a distribution from a qualified plan is sent to multiple destinations.

Revenue Procedure 2014-54 modifies the procedures in Rev. Proc. 2011-14, 2011-4 I.R.B. 330, and Rev. Proc. 2014-17, 2014-12 I.R.B. 661, regarding certain changes in method of accounting for dispositions of tangible depreciable property. This revenue procedure provides the procedures by which a taxpayer may obtain the automatic consent of the Commissioner of Internal Revenue to change to the methods of accounting provided in sections 1.168(i)-1, 1.168(i)-7, and 1.168(i)-8 of the Income Tax Regulations. This revenue procedure also allows a late partial disposition election under Section 1.168(i)-8 to be treated as a change in method of accounting for a limited period of time. Finally, this revenue procedure also modifies section 10.11 of the APPENDIX of Rev. Proc. 2011-14 regarding a change to the method of accounting described in Rev. Proc. 2014-16, 2014-9 I.R.B. 606, for amounts paid to acquire, produce, or improve tangible property.

Notice 2014-55 expands the permitted election rules for health coverage under a Section 125 cafeteria plan and addresses two specific situations in which a Section 125 cafeteria plan participant is permitted to revoke his or her election under the Section 125 cafeteria plan during a period of coverage. The first situation involves a participating employee whose hours of service are reduced so that the employee is expected to average less than 30 hours of service per week but for whom the reduction does not affect the eligibility for coverage under the employer’s group health plan. The second situation involves an employee participating in an employer’s group health plan who would like to cease coverage under the group health plan and purchase coverage through a competitive marketplace established under Section 1311 of the Patient Protection and Affordable Care Act, commonly referred to as an Exchange or Marketplace.

Notice 2014-56 provides the applicable dollar amount that applies for determining the PCORI fee for policy years and plan years ending on or after Oct. 1, 2014, and before Sept. 30, 2015.

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