Expansion of Health Savings Accounts (HSAs) What are the new provisions for HSAs under the OBBBA? The OBBBA includes two significant HSA provisions: • Direct Primary Care Arrangements: Individuals with high deductible health plans (HDHPs) can enroll in direct primary care arrangements while remaining HSA eligible, provided the monthly fee does not exceed $150. • Telehealth Safe Harbor: The special telehealth safe harbor for HSA-compatible HDHPs, which expired in 2024, is permanently extended and made retroactive. Changes to Executive Pay and Tax-Exempt Compensation How does the OBBBA affect executive pay and tax-exempt compensation? The OBBBA introduces new rules for executive pay and tax-exempt compensation: • Aggregation Rule for Executive Pay: The $1 million deduction limit for employee pay now applies to specified covered employees within a controlled group of publicly held corporations. • Expanded Tax on Excess Compensation: The 21% excise tax on compensation over $1 million now includes all current and former employees of applicable tax-exempt organizations. Tax Rate Changes and Other Adjustments What are the key tax rate changes in the OBBBA? The OBBBA includes several tax rate changes and adjustments: • Permanent Reduced Individual Tax Rates: The reduced individual tax rates from the Tax Cuts and Jobs Act (TCJA) are made permanent, with additional inflation adjustments. • Enhanced Standard Deduction: The increased standard deduction from the TCJA is made permanent and further enhanced. • Qualified Business Income Deduction: The 20% deduction for qualified business income (QBI) is made permanent, with increased phase-in limits and a new minimum deduction for active QBI. What Are the Next Steps for the OBBBA? The bill was signed into law on July 4, 2025. Stay tuned for the latest developments and how these changes may affect your retirement savings strategy. And for more detailed information on the OBBBA, scan the QR code. https://www.ascensus.com/industry-regulatory-news/ news-articles/washington-pulse-2025-taxbill-provides-key-changes-for-savers/ 15
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