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S. Michael Chittenden

Michael Chittenden practices in the areas of tax and employee benefits with a focus on the Foreign Account Tax Compliance Act (FATCA), information reporting (e.g., Forms 1095, 1096, 1098, 1099, W-2, 1042, and 1042-S) and withholding, payroll taxes, and fringe benefits. Michael advises companies on their obligations under FATCA and assists in the development of comprehensive FATCA and Chapter 3 (nonresident alien reporting and withholding) compliance programs.

Michael advises large employers on their employment tax obligations, including the special FICA and FUTA rules for nonqualified deferred compensation, the successor employer rules, the voluntary correction of employment tax mistakes, and the abatement of late deposit and information reporting penalties. In addition, he has also advised large insurance companies and employers on the Affordable Care Act reporting requirements in Sections 6055 and 6056, and advised clients on the application of section 6050W (Form 1099-K reporting), including its application to third-party payment networks.

Michael counsels clients on mobile workforce issues including state income tax withholding for mobile employees and expatriate and inpatriate taxation and reporting.

Michael is a frequent commentator on information withholding, payroll taxes, and fringe benefits and regularly gives presentations on the compliance burdens for companies.

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The House of Representatives continues work on a reconciliation bill that would enact significant tax provisions and spending cuts.  The various legislative committees have completed work on the areas of the bill within their jurisdiction, including the Ways and Means Committee, which proposed language that would enact $3.8 trillion in tax cuts over the next ten years.  Over the weekend, the House Budget Committee consolidated the legislation, and the House Bill is now before the Rules Committee, where a managers’ amendment may be considered before it heads to the House floor.  This article is one of a series of articles discussing various proposals in the legislation that touch on tax withholding, reporting, and fringe benefits.

The House Bill proposes to increase the thresholds under current law for information returns required under sections 6041 and section 6050W, as described in more detail below, as well as to modify section 3406 (requiring backup withholding) to align with this proposed change.  Continue Reading House Reconciliation Bill Would Increase Thresholds for Reporting Obligations under Sections 6041 and 6050W

The House of Representatives continues work on a reconciliation bill that would enact significant tax provisions and spending cuts.  The various legislative committees have completed work on the areas of the bill within their jurisdiction, including the Ways and Means Committee, which proposed language that would enact $3.8 trillion in tax cuts over the next ten years.  Over the weekend, the House Budget Committee consolidated the legislation, and the House Bill is now before the Rules Committee, where a managers’ amendment may be considered before it heads to the House floor.  This article is one of a series of articles discussing various proposals in the legislation that touch on tax withholding, reporting, and fringe benefits.

The House Bill includes legislative language that would implement President Trump’s campaign proposal to eliminate the taxation of tipped income, at least temporarily.  The language would allow an above-the-line deduction for certain tips received by an individual in an occupation in which tips are ordinarily received.  However, several requirements, including those relating to the nature of the tip, the characteristics of the individual receiving the tip, and the relevant industry, must be satisfied.  The provision would be effective for tips received on or after January 1, 2025, and would sunset after 2028—leaving its extension to a future Congress during a presidential election year.  In addition, the legislation would extend availability of the FICA tip tax credit under Section 45B of the Code, which currently applies to food and beverage establishments, to employers within the beauty service industry.Continue Reading House Reconciliation Bill Would Enact President Trump’s Campaign Promise to Eliminate Tax on Tips

The House of Representatives continues work on a reconciliation bill that would enact significant tax provisions and spending cuts.  The various legislative committees have completed work on the areas of the bill within their jurisdiction, including the Ways and Means Committee, which proposed language that would enact $3.8 trillion in tax cuts over the next ten years.  Over the weekend, the House Budget Committee consolidated the legislation, and the House Bill is now before the Rules Committee, where a managers’ amendment may be considered before it heads to the House floor.  This article is one of a series of articles discussing various proposals in the legislation that touch on tax withholding, reporting, and fringe benefits.

The House Bill proposes various changes to the Internal Revenue Code, including a new deduction for “qualified overtime compensation” under new section 225 of the Code.  The proposal would enact one of President Trump’s campaign promises.Continue Reading House Reconciliation Bill Would Enact Tax Deduction for Overtime Pay

The House of Representatives continues work on a reconciliation bill that would enact significant tax provisions and spending cuts.  The various legislative committees have completed work on the areas of the bill within their jurisdiction, including the Ways and Means Committee, which proposed language that would enact $3.8 trillion in tax cuts over the next ten years.  Over the weekend, the House Budget Committee consolidated the legislation, and the House Bill is now before the Rules Committee, where a managers’ amendment may be considered before it heads to the House floor.  This article is one of a series of articles discussing various proposals in the legislation that touch on tax withholding, reporting, and fringe benefits.

The House Bill would make changes to section 127 to extend the tax-free treatment of employer student loan payments, which is currently set to expire at the end of 2025, and adjust the annual limit on tax-free educational assistance that may be provided under that section.Continue Reading House Reconciliation Bill Would Extend Tax Break for Employer Student Loan Payments Through Educational Assistance Plans

The House of Representatives continues work on a reconciliation bill that would enact significant tax provisions and spending cuts.  The various legislative committees have completed work on the areas of the bill within their jurisdiction, including the Ways and Means Committee, which proposed language that would enact $3.8 trillion in tax cuts over the next ten years.  Over the weekend, the House Budget Committee consolidated the legislation and the House Bill is now before the Rules Committee, where a managers’ amendment may be considered before it heads to the House floor.  This article is one of a series of articles discussing various proposals in the legislation that touch on tax withholding, reporting, and fringe benefits.

Among other changes to the Internal Revenue Code, two of the House Bill’s changes revisit measures included in the 2017 tax reform package (commonly referred to as the “Tax Cuts and Jobs Act”) addressing commuter benefits provided by employers.Continue Reading What’s Old is New Again: House Bill Would Resurrect UBTI for Tax-Exempt Organization Transportation Fringes, Make Permanent Suspension of Bicycle Commuting Reimbursement Exclusion

On February 21, 2025, the IRS issued Notice 2025-15, which provides guidance regarding the alternative manner of furnishing certain health insurance coverage statements to individuals under I.R.C. sections 6055(c)(3) and 6056(c)(3).  President Biden signed the Paperwork Burden Reduction Act (H.R. 3797) in December 2024, eliminating the requirement to automatically…

Continue Reading IRS Issues Guidance Easing ACA Reporting Requirements

On January 16, 2025, the IRS published proposed regulations to implement and provide guidance regarding amendments made to section 162(m) as part of the American Rescue Plan Act of 2021 (ARPA).  These proposed regulations expand the compensation deduction limitation for publicly held corporations under I.R.C. section 162(m), beginning in 2027.…

Continue Reading IRS Issues Proposed Regulations to Expand Limitation on Compensation Deduction for Publicly Held Corporations

The IRS issued Rev. Rul. 2025-4 on January 15, 2025, regarding the federal income and employment tax treatment and related reporting requirements of contributions to, and benefits paid under, a mandatory state paid family and medical leave (PFML) program. The ruling includes various tax treatment scenarios containing the IRS’ guidance with…

Continue Reading IRS Issues Ruling on Tax Treatment of Contributions and Benefits Under State Paid Family and Medical Leave Programs

On October 18, 2024, the IRS issued final regulations on withholding for qualified retirement plan payments made to United States taxpayers living outside of the country.  The final regulations come five years after the IRS issued proposed regulations on the topic and almost four decades after the IRS issued Notice…

Continue Reading IRS Issues Final Regulations Governing Withholding on Certain Retirement Plan and Commercial Annuity Distributions Made to U.S. Taxpayers Abroad