Incentives for Buying Clean Vehicles

California and federal incentives for buying certain clean vehicles are still available. California currently offers a rebate of up to $5,000 per light duty vehicle to individuals and businesses who purchase or lease a new eligible zero emissions or hybrid electric vehicle. Certain zero emissions commercial vehicles are eligible for a rebate of up to $20,000. The rebates are available on a first come first serve basis and apply to qualified vehicles purchased or leased after March 15, 2010. For more information on eligible vehicles, rebate amounts and to apply for rebates visit www.energycenter.org. Read more

Estate and GST taxes—Where We Are and Where We’re Headed if Congress Doesn’t Act

Estate and generation-skipping transfer (GST) taxes have been repealed for 2010 but are scheduled to return in 2011. Next year’s rules, however, won’t be those that applied during 2009 when these taxes were last in effect. Rather, unless Congress acts, rules from 2001 will apply for next year. This Practice Alert explains what repeal means, what old rules are scheduled to return in 2011, and relevant concerns and planning considerations both for this year and next year.

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2011 Standard Mileage Rates

The IRS released Rev. Proc. 2010-51 and announced that beginning January 1, 2011, the following standard mileage rates will apply:

•  51 cents per mile for business miles driven
• 19 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

These rates apply to the use of cars, vans, pickups, or panel trucks. California conforms to these amounts. (R&TC §17024.5)

W-2 Health Care Coverage Reporting Requirement

The IRS has released notice 2010-69 making the health care coverage W-2 reporting requirement optional for 2011. Before the notice was issued, employers were required to report the applicable cost of employer provided coverage on the 2011 Form W-2 under the Patient Protection and Affordable Care Act of 2010, enacted March 23, 2010. This reporting will no longer be mandatory for 2011, allowing employers additional time to implement changes to their payroll systems in order to track the reportable costs. Further guidance from the IRS as to when the reporting requirement will be put into effect is expected before the end of this year. In the meantime, the IRS has released a draft version of the 2011 W-2, which includes the codes employers will use to report the coverage costs. Click here to view the 2011 draft W-2.

Proposed Changes to Electronic Payment System

The IRS has issued proposed regulations eliminating the paper deposit coupon system and replacing it with mandatory use of the Electronic Federal Tax Deposit System (EFTPS) begininng January 1, 2011.

EFTPS is currently required only for taxpayers whose deposits of certain taxes exceed $200,000 annually. The proposed regulations would require use of the EFTPS for depositing certain taxes, including withholding, FICA, FUTA, and corporate income and estimated taxes. Some businesses with minimal amounts of tax would not be subject to the EFTPS requirements and could still remit payments with the related tax return.

The proposed regulation is expected to be made final by the end of this year. The existing deposit requirements, thresholds, etc. would generally remain the same.