Hood & Strong Nonprofit Tax Alert
Exemption from Form 8621 Filing
U.S. Persons holding passive foreign investment company (PFIC) stock through tax-exempt organizations may be exempt from Form 8621 filing requirements.
Persons who own PFIC stock indirectly through certain tax-exempt entities are exempt from the requirement to file Form 8621 under IRC Section 1298(f). The exemption applies to PFIC stock owned through:
- IRAs
- Qualified tuition programs
- Religious organizations
- Tax-exempt entities described in 501(c)
- State college or University
Click here to read IRS Notice 14-28.
FTB Releases New Reasonable Cause Abatement Request Form
For business entities looking to obtain an abatement based on reasonable cause, they may now utilize form FTB 2924: Reasonable Cause – Business Entity Claim for Refund. The California Franchise Tax Board (FTB) recently released FTB 2924 to streamline the process of making a reasonable cause abatement request. However, the FTB will continue to accept other written forms of requests for abatement based on reasonable cause. Please note that FTB 2924 is not intended for tax refund requests.
To view form FTB 2924.
New Paid Sick Leave Law Coming to California in July 2015
Starting July 1, 2015, California employees are entitled to one hour of paid sick leave for every 30 hours worked. An employer is authorized by Assembly Bill No. 1522 to limit an employee's use of paid sick days to 24 hours or 3 days per year. Any unused sick time at the end of the 12-month period must be accrued and rolled over to the next 12-month period. An employer may cap the accrued sick time to 48 hours or 6 days.
The new law requires workers to be employed 90 days before using accrued sick leave and to qualify for sick leave accrual, employees will have to work 30 or more days in a year. The sick leave may be used for themselves or to care for family members. Fines will be imposed against employers who do not comply with the provisions.
San Francisco law currently requires workers to accrue sick leave at the same rate, but the minimum cap is five to nine days, depending on the size of the employer. If you are a San Francisco employer, you may already be complying with the new state law.
Click here for more details about Assembly Bill No. 1522.
