Internal Revenue Bulletin 2022-45 (PDF rendition): IRS Revenue Rulings

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Bulletin No. 2022–45
November 7, 2022
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
ADMINISTRATIVE
REG-100719-21, page 457.
This guidance contains proposed amendments to the
regulations relating to the user fees for the new enroll-
ment and renewal enrollment of enrolled actuaries. In
accordance with the guidelines in OMB Circular A-25,
the IRS has re-calculated its cost of administering the
new enrollment and renewal enrollment processes for
enrolled actuaries and determined the full cost has
increased to $680.00 per new enrollment or renewal
enrollment. Therefore, the Treasury Department and
the IRS propose to increase the amount of the user fee
for enrolled actuary new enrollment or renewal enroll-
ment from $250.00 to $680.00.
ADMINISTRATIVE, INCOME TAX
Rev. Proc. 2022-38, page 445.
This revenue procedure sets forth inflation-adjusted
items for 2023 for various Code provisions as in effect
on October 18, 2022. The inflation adjusted items for
the Code sections set forth in section 3 of this revenue
procedure are generally determined by reference to §
1(f) of the Code. To the extent amendments to the Code
are enacted for 2023 after October 18, 2022, taxpay-
ers should consult additional guidance to determine
whether these adjustments remain applicable for 2023.
EMPLOYEE PLANS
Notice 2022-54, page 439.
This notice sets forth updates on the corporate bond
monthly yield curve, the corresponding spot segment
rates for October 2022 used under § 417(e)(3)(D), the
24-month average segment rates applicable for Octo-
ber 2022, and the 30-year Treasury rates, as reflected
by the application of § 430(h)(2)(C)(iv).
Notice 2022-55, page 443.
Section 415 of the Internal Revenue Code (the Code)
provides for dollar limitations on benefits and contribu-
tions under qualified retirement plans. Section 415(d)
requires that the Secretary of the Treasury annually
adjust these limits for cost of living increases. Other
limitations applicable to deferred compensation plans
are also affected by these adjustments under § 415.
Under § 415(d), the adjustments are to be made under
adjustment procedures similar to those used to adjust
benefit amounts under § 215(i)(2)(A) of the Social Secu-
rity Act.
EMPLOYEE PLANS, EXCISE TAX
Notice 2022-53, page 437.
This notice announces that the Department of the Trea-
sury and the Internal Revenue Service intend to issue
final regulations related to required minimum distribu-
tions under section 401(a)(9) of the Internal Revenue
Code that will apply no earlier than the 2023 distribu-
tion calendar year. In addition, this notice provides guid-
ance related to certain provisions of section 401(a)(9)
that apply for 2021 and 2022 and the related excise
tax under section 4974.
INCOME TAX
REG-121509-00, page 463.
This document withdraws a notice of proposed rulemak-
ing published in the Federal Register on August 29,
2006. The notice of proposed rulemaking relates to
Finding Lists begin on page ii.

the exclusion from gross income of previously taxed
earnings and profits under section 959 of the Internal
Revenue Code (the “Code”) and related basis adjust-
ments under section 961 of the Code.
Rev. Rul. 2022-20, page 407.
Federal rates; adjusted federal rates; adjusted federal
long-term rate, and the long-term tax exempt rate. For
purposes of sections 382, 1274, 1288, 7872 and
other sections of the Code, tables set forth the rates
for November 2022.
T.D. 9968, page 409.
These final regulations under section 36B of the Inter-
nal Revenue Code amend the regulations regarding
eligibility for the premium tax credit to provide that
affordability of employer-sponsored minimum essential
coverage for family members of an employee is deter-
mined based on the employee’s share of the cost of
covering the employee and those family members, not
the cost of covering only the employee.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and
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Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing offi-
cial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of inter-
nal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rul-
ings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
November 7, 2022 Bulletin No. 2022–45

Part I
Section 1274.—
Determination of Issue
Price in the Case of Certain
Debt Instruments Issued for
Property
(Also Sections 42, 280G, 382, 467, 468, 482, 483,
1288, 7520, 7872.)
Rev. Rul. 2022-20
This revenue ruling provides various
prescribed rates for federal income tax
purposes for November 2022 (the cur-
rent month). Table 1 contains the short-
term, mid-term, and long-term applica-
ble federal rates (AFR) for the current
month for purposes of section 1274(d)
of the Internal Revenue Code. Table 2
contains the short-term, mid-term, and
long-term adjusted applicable federal
rates (adjusted AFR) for the current
month for purposes of section 1288(b).
Table 3 sets forth the adjusted fed-
eral long-term rate and the long-term
tax-exempt rate described in section
382(f). Table 4 contains the appropriate
percentages for determining the low-in-
come housing credit described in sec-
tion 42(b)(1) for buildings placed in
service during the current month. How-
ever, under section 42(b)(2), the appli-
cable percentage for non-federally sub-
sidized new buildings placed in service
after July 30, 2008, shall not be less
than 9%. Finally, Table 5 contains the
federal rate for determining the present
value of an annuity, an interest for life
or for a term of years, or a remainder or
a reversionary interest for purposes of
section 7520.
REV. RUL. 2022-20 TABLE 1
Applicable Federal Rates (AFR) for November 2022
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
AFR4.10%4.06%4.04%4.03%
110% AFR4.52%4.47%4.45%4.43%
120% AFR4.93%4.87%4.84%4.82%
130% AFR5.35%5.28%5.25%5.22%
Mid-term
AFR3.97%3.93%3.91%3.90%
110% AFR4.37%4.32%4.30%4.28%
120% AFR4.78%4.72%4.69%4.67%
130% AFR5.18%5.11%5.08%5.06%
150% AFR5.99%5.90%5.86%5.83%
175% AFR7.00%6.88%6.82%6.78%
Long-term
AFR3.92%3.88%3.86%3.85%
110% AFR4.32%4.27%4.25%4.23%
120% AFR4.71%4.66%4.63%4.62%
130% AFR5.10%5.04%5.01%4.99%
REV. RUL. 2022-20 TABLE 2
Adjusted AFR for November 2022
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term adjusted AFR3.10%3.08%3.07%3.06%
Mid-term adjusted AFR3.00%2.98%2.97%2.96%
Long-term adjusted AFR2.97%2.95%2.94%2.93%
Bulletin No. 2022–45 407 November 7, 2022

REV. RUL. 2022-20 TABLE 3
Rates Under Section 382 for November 2022
Adjusted federal long-term rate for the current month2.97%
Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal
long-term rates for the current month and the prior two months.)
2.97%
REV. RUL. 2022-20 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for November 2022
Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July
30, 2008, shall not be less than 9%.
Appropriate percentage for the 70% present value low-income housing credit7.91%
Appropriate percentage for the 30% present value low-income housing credit 3.39%
REV. RUL. 2022-20 TABLE 5
Rate Under Section 7520 for November 2022
Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years, or a
remainder or reversionary interest
4.80%
Section 42.—Low-Income
Housing Credit
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
November 2022. See Rev. Rul. 2022-20, page 407.
Section 280G.—Golden
Parachute Payments
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
November 2022. See Rev. Rul. 2022-20, page 407.
Section 382.—Limitation
on Net Operating Loss
Carryforwards and
Certain Built-In Losses
Following Ownership
Change
The adjusted applicable federal long-term rate
is set forth for the month of November 2022. See
Rev. Rul. 2022-20, page 407.
Section 467.—Certain
Payments for the Use of
Property or Services
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
November 2022. See Rev. Rul. 2022-20, page 407.
Section 468.—Special
Rules for Mining and Solid
Waste Reclamation and
Closing Costs
The applicable federal short-term rates are set
forth for the month of November 2022. See Rev.
Rul. 2022-20, page 407.
Section 482.—Allocation
of Income and Deductions
Among Taxpayers
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
November 2022. See Rev. Rul. 2022-20, page 407.
Section 483.—Interest on
Certain Deferred Payments
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
November 2022. See Rev. Rul. 2022-20, page 407.
Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term,
mid-term, and long-term rates are set forth for the
month of November 2022. See Rev. Rul. 2022-20,
page 407.
Section 7520.—Valuation
Tables
The applicable federal mid-term rates are set
forth for the month of November 2022. See Rev.
Rul. 2022-20, page 407.
Section 7872.—Treatment
of Loans With Below-
Market Interest Rates
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
November 2022. See Rev. Rul. 2022-20, page 407.

November 7, 2022 408 Bulletin No. 2022–45

Bulletin No. 2022–45 409 November 7, 2022
26 CFR § 301.6104(c)-1
T.D. 9968
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1
Affordability of Employer
Coverage for Family
Members of Employees
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains
final regulations under section 36B of
the Internal Revenue Code (Code) that
amend the regulations regarding eligi-
bility for the premium tax credit (PTC)
to provide that affordability of employ-
er-sponsored minimum essential cov-
erage (employer coverage) for family
members of an employee is determined
based on the employee’s share of the
cost of covering the employee and those
family members, not the cost of covering
only the employee. The final regulations
also add a minimum value rule for fam-
ily members of employees based on the
benefits provided to the family members.
The final regulations affect taxpayers
who enroll, or enroll a family member,
in individual health insurance coverage
through a Health Insurance Exchange
(Exchange) and who may be allowed a
PTC for the coverage.
DATES: These final regulations are effec-
tive on December 12, 2022.
FOR FURTHER INFORMATION
CONTACT: Clara Raymond at (202)
317-4718 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
I. Overview
This document amends the Income Tax
Regulations (26 CFR part 1) under sec-
tion 36B of the Code. On April 7, 2022,
the Department of the Treasury (Trea-
sury Department) and the IRS published
a notice of proposed rulemaking (REG-
114339-21) in the Federal Register (87
FR 20354) under section 36B (proposed
regulations). A public hearing was held
on June 27, 2022. The Treasury Depart-
ment and the IRS also received written
comments on the proposed regulations.
After consideration of the testimony heard
at the public hearing and the comments
received, the proposed regulations are
adopted as amended by this Treasury deci-
sion (final regulations).
These final regulations provide that,
for purposes of determining eligibility
for PTC, affordability of employer cov-
erage for individuals eligible to enroll in
the coverage because of their relation-
ship to an employee of the employer
(related individuals) is determined based
on the employee’s share of the cost of
covering the employee and the related
individuals. As further explained in the
Summary of Comments and Explanation
of Revisions, the affordability rule for
related individuals in these final regu-
lations represents the better reading of
the relevant statutes and is consistent
with Congress’s purpose in the Afford-
able Care Act (ACA)
1
to expand access
to affordable health care coverage. The
final regulations also include amend-
ments to the rules relating to the deter-
mination of whether employer coverage
provides a minimum level of benefits,
referred to as minimum value; conform-
ing amendments to the current regula-
tions; and clarification of the treatment
of premium refunds.
II. Eligibility for Employer Coverage
Under Section 36B
Section 36B provides a PTC for appli-
cable taxpayers who meet certain eligibil-
ity requirements, including that a mem-
ber of the taxpayer’s family enrolls in a
qualified health plan through an Exchange
(QHP or Exchange coverage) for one or
more “coverage months.” Under §1.36B-
1(d) of the Income Tax Regulations, a
taxpayer’s family consists of the taxpayer,
the taxpayer’s spouse if filing jointly, and
any dependents of the taxpayer.
Section 1.36B-3(d)(1) provides that the
PTC for a coverage month is the lesser of:
(i) the premiums for the month, reduced
by any amounts that were refunded, for
one or more QHPs in which a taxpayer or
a member of the taxpayer’s family enrolls
(enrollment premiums); or (ii) the excess
of the adjusted monthly premium for the
applicable benchmark plan over 1/12 of
the product of a taxpayer’s household
income and the applicable percentage for
the taxable year (taxpayer’s contribution
amount).
Under section 36B(c)(2)(B) and
§1.36B-3(c), a month is a coverage month
for an individual only if the individual is
not eligible for minimum essential cover-
age (MEC) for that full calendar month
(other than coverage under a health care
plan offered in the individual market
within a state). Under section 5000A(f)(1)
(B) of the Code, the term MEC includes
employer coverage. If an individual is eli-
gible for employer coverage for a given
month, no PTC is allowed for the individ-
ual for that month.
Section 36B(c)(2)(C) generally pro-
vides that an individual is not treated as
eligible for employer coverage if the cov-
erage offered is unaffordable or does not
provide minimum value. However, if the
individual enrolls in employer coverage,
the individual is eligible for MEC, irre-
spective of whether the employer cover-
age is affordable or provides minimum
1
The term ACA in this preamble means the Patient Protection and Affordable Care Act, Pub. L. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation
Act of 2010, Pub. L. 111-152, 124 Stat. 1029 (2010).

November 7, 2022 410 Bulletin No. 2022–45
value. See section 36B(c)(2)(C)(iii) and
§1.36B-2(c)(3)(vii).
Under the affordability test in section
36B(c)(2)(C)(i)(II), an employee who
does not enroll in employer coverage is
not treated as eligible for the coverage
if “the employee’s required contribution
(within the meaning of section 5000A(e)
(1)(B)) with respect to the plan exceeds
9.5 percent of the applicable taxpayer’s
household income.”
2
The flush language
following this provision provides that “[t]
his clause shall also apply to an individual
who is eligible to enroll in the plan by rea-
son of a relationship the individual bears
to the employee.”
Section 5000A generally requires
applicable individuals
3
to make an indi-
vidual shared responsibility payment
4

with their tax return if they do not main-
tain minimum essential coverage for
themselves and any dependents. Sec-
tion 5000A(e)(1) establishes exemptions
from the individual shared responsibility
payment that would otherwise apply for
“individuals who cannot afford cover-
age,” which the statute defines in section
5000A(e)(1)(A) to be applicable individ-
uals whose required contribution for cov-
erage exceeds a specified percentage of
their household income. Section 5000A(e)
(1)(B)(i) provides that, for an employee
eligible to purchase employer coverage,
the term “required contribution” means
“the portion of the annual premium which
would be paid by the individual . . . for
self-only coverage.” For related individ-
uals, the definition of “required contri-
bution” in section 5000A(e)(1)(B)(i) is
modified by a “special rule” in section
5000A(e)(1)(C). Section 5000A(e)(1)(C)
provides that “[f]or purposes of [section
5000A(e)(1)](B)(i), if an applicable indi-
vidual is eligible for minimum essential
coverage through an employer by rea-
son of a relationship to an employee, the
determination [of affordability] under
subparagraph (A) shall be made by
reference to [the] required contribution of
the employee.” The regulations under sec-
tion 5000A interpret section 5000A(e)(1)
(C) as modifying the required contribution
rule in section 5000A(e)(1)(B)(i) regard-
ing coverage for related individuals to
take into account the cost of covering the
employee and the related individuals, not
just the employee. Specifically, for related
individuals, §1.5000A-3(e)(3)(ii)(B) pro-
vides that the required contribution is the
amount an employee must pay to cover
the employee and the related individuals
who are included in the employee’s fam-
ily.
5
Thus, under §1.5000A-3(e)(3)(ii)
(B), employer coverage is affordable for
those related individuals if the share of
the annual premium the employee must
pay to cover the employee and the related
individuals is not greater than the required
contribution percentage of household
income.
In contrast to the affordability rule for
related individuals in §1.5000A-3(e)(3)(ii)
(B), the Treasury Department and the IRS
issued final regulations in 2013 for pur-
poses of the PTC providing that employer
coverage is affordable for the related indi-
viduals if the share of the annual premium
the employee must pay for self-only cov-
erage is not greater than the required con-
tribution percentage of household income,
regardless of how expensive the annual
premium for family coverage would be.
See §1.36B-2(c)(3)(v)(A)(2) (the 2013
regulations or 2013 affordability rule).
Thus, under the 2013 affordability rule,
the employee’s share of the premium for
family coverage, as defined in §1.36B-
1(m),
6
was not considered in determining
whether employer coverage is affordable
for related individuals.
When the 2013 regulations were issued,
the Treasury Department and the IRS con-
sidered the statutory language of section
36B(c)(2)(C)(i)(II) and its cross-reference
to section 5000A(e)(1)(B), as well as the
statutory language of section 5000A(e)
(1)(B) and the cross-reference in sec-
tion 5000A(e)(1)(C) to section 5000A(e)
(1)(B). In the preamble to those regula-
tions, the Treasury Department and the
IRS interpreted the language of section
36B, through the cross-reference to sec-
tion 5000A(e)(1)(B), to provide that the
affordability test for related individuals is
based on the cost of self-only coverage.
Thus, if the cost of self-only coverage
is affordable, no PTC is allowed for the
Exchange coverage of related individu-
als even if family coverage through the
employer costs more than 9.5 percent of
household income.
As noted above, section 36B(c)(2)(C)
generally provides that an individual is
not treated as eligible for employer cov-
erage if the coverage offered is unafford-
able or does not provide minimum value.
An eligible employer-sponsored plan
provides minimum value under section
36B(c)(2)(C)(ii) and §1.36B-6(a)(1) only
if the plan’s share of the total allowed
costs of benefits provided to an employee
is at least 60 percent. On November 4,
2014, the IRS released Notice 2014-
69, 2014-48 I.R.B. 903, which advised
employers of the intent to propose regu-
lations providing that group health plans
that fail to provide substantial coverage
for inpatient hospitalization or physician
services do not provide minimum value.
Notice 2014-69 noted that the Department
of Health and Human Services (HHS) was
concurrently issuing parallel guidance and
also provided that, pending issuance of
final Treasury regulations, an employee
would not be required to treat a non-hos-
pital/non-physician services plan as pro-
viding minimum value for purposes of an
employee’s eligibility for a PTC.
On November 26, 2014, HHS issued
proposed regulations providing that an
eligible employer-sponsored plan pro-
vides minimum value only if, in addition
to covering at least 60 percent of the total
allowed costs of benefits provided under
2
This required contribution percentage of 9.5 is indexed annually under section 36B(c)(2)(C)(iv). For simplicity, this preamble refers to 9.5 percent as the required contribution percentage.
3
Section 5000A(d)(1) defines an applicable individual as any individual other than an individual with a religious conscience exemption, an individual who is not lawfully present or an
individual who is incarcerated.
4
Public Law 115-97 (2017), commonly referred to as the Tax Cuts and Jobs Act, reduced the individual shared responsibility payment amount to zero for months beginning after December
31, 2018.
5
For purposes of this exemption for unaffordable coverage, an employee or related individual who is otherwise exempt under §1.5000A–3 is not included in determining the required
contribution.
6
Section 1.36B-1(m) defines family coverage as health insurance that covers more than one individual and provides coverage for the essential health benefits as defined in section 1302(b)
(1) of the ACA.

Bulletin No. 2022–45 411 November 7, 2022
the plan, the plan benefits include sub-
stantial coverage of inpatient hospital ser-
vices and physician services. See 79 FR
70674. On February 27, 2015, HHS final-
ized this minimum value rule at 45 CFR
156.145(a). See 80 FR 10750, 10872. On
September 1, 2015, the Treasury Depart-
ment and the IRS issued proposed regula-
tions under section 36B (REG-143800-14,
80 FR 52678) (2015 proposed regulations)
to incorporate the substance of the HHS
final regulations regarding the minimum
value rule. The 2015 proposed regulations
issued by the Treasury Department and
the IRS relating to substantial coverage of
inpatient hospital services and physician
services have not been finalized.
III. EO 14009
On January 28, 2021, President Biden
issued Executive Order (EO) 14009,
Strengthening Medicaid and the Afford-
able Care Act (ACA). Section 3(a) of EO
14009 directed the Secretary of the Trea-
sury to review, as soon as practicable,
all existing regulations and other agency
actions to determine whether the actions
are inconsistent with the policy to protect
and strengthen the ACA and, as part of
this review, to examine policies or prac-
tices that may reduce the affordability of
coverage or financial assistance for cover-
age, including for dependents. Consistent
with the EO, the Treasury Department and
the IRS reviewed the regulations under
section 36B, including §1.36B-2(c)(3)(v)
(A)(2).
IV. Proposed Regulations
On April 7, 2022, the Treasury Depart-
ment and the IRS published proposed reg-
ulations proposing to amend §1.36B-2(c)
(3)(v)(A)(2) to change the rule regarding
the affordability of employer coverage for
related individuals. The proposed regula-
tions provided that, for purposes of deter-
mining eligibility for PTC, affordability of
employer coverage for related individuals
in the employee’s family would be deter-
mined based on the cost of covering the
employee and those related individuals—
just as affordability is determined in the
regulations implementing section 5000A.
For this purpose, affordability for related
individuals would be based on the por-
tion of the annual premium the employee
must pay for coverage of the employee
and all other individuals included in the
employee’s family, within the meaning of
§1.36B-1(d), who are offered the cover-
age. Although some individuals who are
not part of the family might be offered the
employer coverage through the employee,
the cost of covering individuals not in the
family would not be considered in deter-
mining whether the related individuals in
the employee’s family have an offer of
affordable employer coverage.
The proposed regulations would not
change the affordability rule for employ-
ees. As required by statute, employees
have an offer of affordable employer cov-
erage if the employee’s required contribu-
tion for self-only coverage of the employee
does not exceed the required contribution
percentage of household income.
The proposed regulations also
addressed the minimum value rules in sec-
tion 36B. Under the proposed regulations,
a separate minimum value rule would be
provided for related individuals that is
based on the level of coverage provided
to related individuals under an eligible
employer-sponsored plan. In addition, the
proposed regulations withdrew the 2015
proposed regulations and re-proposed
the rule regarding substantial coverage of
inpatient hospitalization services and phy-
sician services. Thus, under the proposed
regulations, an eligible employer-spon-
sored plan would provide minimum value
only if the plan covers at least 60 percent
of the total allowed costs of benefits pro-
vided to an employee under the plan and
the plan benefits include substantial cov-
erage of inpatient hospital services and
physician services.
Finally, the proposed regulations
would amend §1.36B-3(d)(1)(i) to clarify
that, in computing the PTC for a cover-
age month, a taxpayer’s enrollment pre-
miums for the month are the premiums
for the month, reduced by any amounts
that were refunded in the same taxable
year the taxpayer incurred the premium
liability.
Summary of Comments and
Explanation of Revisions
I. Overview
The Treasury Department and the IRS
received 3,888 comments on the proposed
regulations, the overwhelming majority
of which were in support of the rules in
the proposed regulations, including the
affordability test for related individuals
that is based on the cost of family cov-
erage offered to the related individuals.
Many commenters recounted personal
stories of family members being unin-
sured due to the unaffordability of family
coverage offered by an employer and the
unavailability of a PTC for Exchange cov-
erage. One married couple even testified
to a state legislature that they divorced
solely to retain the husband’s eligibility
for the PTC after his wife got a new job
with an offer of family coverage at a cost
of $16,000, over half of the husband’s
annual earnings.
7
Some commenters made
the point that an affordability test for
related individuals that is based on the cost
of the coverage offered to the employee
and related individuals is family-friendly
because it is more likely to provide all
family members with access to affordable
coverage. Many commenters agreed with
the analysis in the preamble to the pro-
posed regulations that the language of sec-
tion 36B(c)(2)(C)(i) is best interpreted to
require a separate affordability determina-
tion for related individuals that is based on
the employee’s cost to cover the employee
and related individuals rather than a sin-
gle affordability determination for both
employees and related individuals that is
based on the cost of self-only coverage to
employees, and provided persuasive legal
support for this position. Commenters also
overwhelmingly supported the minimum
value rules provided in the proposed regu-
lations and agreed that a failure to provide
a separate minimum value rule for related
individuals could undermine the separate
affordability rule for related individuals.
Other commenters expressed the view
that the separate affordability test and min-
imum value rule for related individuals in
the proposed regulations are contrary to
7
See https://legislature.maine.gov/legis/bills/getTestimonyDoc.asp?id=161949.

November 7, 2022 412 Bulletin No. 2022–45
the language of section 36B, and that the
Treasury Department and the IRS do not
have the authority to change those rules.
Several of these commenters provided
legal analyses in support of their position
as well as policy arguments against the
proposed affordability test and minimum
value rule for related individuals. For rea-
sons explained in sections II and III of this
Summary of Comments and Explanation
of Revisions, the Treasury Department
and the IRS are not persuaded by these
arguments.
Some commenters suggested that the
Treasury Department and the IRS adopt
various changes to the rules in the pro-
posed regulations. Other commenters
requested outreach by HHS, the Treasury
Department, and the IRS to educate indi-
viduals, employers, and other stakehold-
ers about the final regulations once they
are issued. Several commenters requested
clarification on certain issues related to
employers, including information report-
ing requirements under section 6056 of
the Code and the effect of the final regu-
lations on individuals enrolled in non-cal-
endar year plans. These comments are
addressed in sections IV, V, and VI of the
Summary of Comments and Explanation
of Revisions.
Finally, many commenters supported
the minimum value rule in the proposed
regulations under which an eligible
employer-sponsored plan would provide
minimum value to an employee only if,
in addition to covering at least 60 per-
cent of the total allowed costs of bene-
fits provided to an employee under the
plan, the plan’s benefits include substan-
tial coverage of inpatient hospitalization
services and physician services. In addi-
tion, many commenters supported the
proposed amendment to §1.36B-3(d)(1)
(i) to clarify that, in computing the PTC
for a coverage month, a taxpayer’s enroll-
ment premiums for the month are the
premiums for the month, reduced by any
amounts that were refunded in the same
taxable year the taxpayer incurred the pre-
mium liability. Because commenters sup-
ported these rules and did not request any
modifications to them, both the proposed
minimum value rule for employees related
to inpatient hospitalization services and
physician services and the proposed clar-
ification of the premium refund rule are
being finalized without change.
II. Comments on Legal Analysis
A. Statutory analysis of affordability rule
Under section 36B(c)(2)(C)(i)(II), an
employee who does not enroll in employer
coverage is not considered eligible for the
coverage if “the employee’s required con-
tribution (within the meaning of section
5000A(e)(1)(B)) with respect to the plan
exceeds 9.5 percent of the applicable tax-
payer’s household income.” The flush lan-
guage following this provision provides
that “[t]his clause shall also apply to an
individual who is eligible to enroll in the
plan by reason of a relationship the indi-
vidual bears to the employee.”
As discussed in the preamble to the
proposed regulations, the flush language
in section 36B(c)(2)(C)(i) does not state
clearly and expressly how section 36B(c)
(2)(C)(i)(II) applies to related individu-
als or how the cross-reference to section
5000A(e)(1)(B) applies to coverage for
related individuals. Section 5000A(e)
(1)(B)(i) provides that, for an employee
eligible to purchase employer coverage,
the term “required contribution” means
“the portion of the annual premium
which would be paid by the individual
. . . for self-only coverage.” For related
individuals, the definition of “required
contribution” in section 5000A(e)(1)(B)
(i) is modified by a “special rule” in sec-
tion 5000A(e)(1)(C). Section 5000A(e)
(1)(C) provides that “[f]or purposes of
[section 5000A(e)(1)](B)(i), if an appli-
cable individual is eligible for min-
imum essential coverage through an
employer by reason of a relationship to
an employee, the determination under
[section 5000(e)(1)(A)] shall be made by
reference to [the] required contribution
of the employee.” The regulations under
section 5000A interpret section 5000A(e)
(1)(C) as modifying the required contri-
bution rule in section 5000A(e)(1)(B)
(i) for coverage for a related individual
to provide that the determination under
section 5000A(e)(1)(A) is made by ref-
erence to the required contribution of the
employee for coverage for the employee
and that related individual. Specifically,
for related individuals, §1.5000A-3(e)
(3)(ii)(B) provides that the required con-
tribution for related individuals is the
amount an employee must pay to cover
the employee and all related individu-
als who are included in the employee’s
family.
8
This long-standing rule under
section 5000A was proposed in February
2013
9
and did not generate any critical
comments. The proposed rule was final-
ized without change in August 2013
10
and
has never been challenged.
Similar to the regulations implement-
ing section 5000A, the proposed regula-
tions provided an affordability rule for
related individuals for section 36B pur-
poses that looks to the cost of coverage for
the employee and related individuals and
is separate from the affordability rule for
employees of the employer offering the
coverage. Under the proposed regulations,
affordability for related individuals would
be based on the portion of the annual pre-
mium the employee must pay for cover-
age of the employee and all other individ-
uals included in the employee’s family,
within the meaning of §1.36B-1(d), who
are offered the coverage.
Some commenters expressed the view
that the affordability rule in the proposed
regulations conflicts with the language in
section 36B, that the 2013 affordability
rule is correct, and that the affordability
rule for related individuals in the pro-
posed regulations should be withdrawn.
These commenters argued that section
36B unambiguously establishes a sin-
gle affordability test for both employ-
ees and related individuals that is based
on the cost of self-only coverage to the
employee. As explained later in this sec-
tion II.A. of the Summary of Comments
and Explanation of Revisions, however,
the proposed rule’s approach represents
8
For purposes of this exemption for unaffordable coverage, an employee or related individual who is otherwise exempt under §1.5000A–3 is not included in determining the required
contribution.
9
REG-148500-12 (78 FR 7314).
10
TD 9632 (78 FR 53646).

Bulletin No. 2022–45 413 November 7, 2022
the better reading of the statute and the
better means of implementing it. After
careful consideration, the Treasury
Department and the IRS are adopting the
affordability test as proposed.
The Treasury Department and the IRS
are of the view that section 36B(c)(2)
(C)(i), including the flush language that
follows section 36B(c)(2)(C)(i)(II), is
correctly interpreted to provide that the
affordability test for a related individual
is based on the cost of coverage for the
employee and the related individual. The
flush language provides as follows: “[t]
his clause shall also apply to a [related
individual].” Thus, taking into account the
flush language, section 36B(c)(2)(C)(i)
may be read to apply to a related individ-
ual as follows:
[A related individual] shall not be
treated as eligible for minimum essential
coverage if such coverage (I) consists of
an eligible employer-sponsored plan [ ],
and (II) the employee’s
11
required con-
tribution (within the meaning of section
5000A(e)(1)(B)) with respect to the plan
exceeds 9.5 percent of the applicable tax-
payer’s household income.
This language includes four references
to the coverage provided by the employ-
ee’s employer: “minimum essential cover-
age,” “such coverage,” “eligible employ-
er-sponsored plan,” and “the plan.”
Without question, “such coverage” refers
to the minimum essential coverage offered
by the employee’s employer to the related
individual, as do references to “employ-
er-sponsored plan” and “the plan.” Unless
a related individual is also employed by
that employer, the related individual may
not enroll in the employer’s coverage on a
self-only basis. Thus, the minimum essen-
tial coverage referred to in section 36B(c)
(2)(C)(i), as it applies to related individu-
als, is the coverage the related individual
may enroll in, which is the family cover-
age offered by the employer. Under this
reading, the reference to “the employee’s
required contribution . . . with respect to
the plan” is the required contribution for
family coverage.
This reading gives full effect to sec-
tion 36B(c)(2)(C)(i)(II)’s cross reference
to section 5000A(e)(1)(B). As noted ear-
lier in this section II.A of the Summary of
Comments and Explanation of Revisions,
section 36B(c)(2)(C)(i) specifies rules to
determine the affordability of coverage
under an eligible employer-sponsored
plan both for an employee and for related
individuals. Taken in isolation, section
5000A(e)(1)(B) would specify a rule for
determining the affordability of a required
contribution only with respect to coverage
for an employee, even though the flush lan-
guage in section 36B(c)(2)(C)(i) requires
a calculation to be performed for related
individuals as well. Section 5000A(e)(1)
(C) provides a rule for that calculation by
specifying a ”special rule” for purposes of
the calculation of the employee’s required
contribution for coverage that includes the
related individual. As explained earlier in
this section II.A. of the Summary of Com-
ments and Explanation of Revisions, the
Treasury Department and the IRS have
long understood section 5000A(e)(1)(C)
in this way. See § 1.5000A-3(e)(3)(ii)(B),
promulgated in 2013.
As noted in section I of this Summary
of Comments and Explanation of Revi-
sions, the vast majority of commenters
supported the proposed affordability rule
for related individuals, and several of these
commenters provided detailed technical
analyses in support of this interpretation
of the statute. Some of those commenters
argued that section 36B unambiguously
establishes a separate affordability test
for related individuals that is based on
the cost of family coverage. For example,
one commenter asserted that the proposed
affordability rule for related individuals
follows the plain language of the statute
and that section 5000A(c)(1)(C) states on
its face that it must be read into 5000A(c)
(1)(B). Another commenter argued that
the plain text of the statute indicates that
a related individual’s eligibility for the
PTC is based on the cost of family cov-
erage and that the affordability rule in
the 2013 regulations reflected a strained
reading of the statute. One commenter
supported the proposed affordability rule
for related individuals but disagreed that
the rule adopts an “alternative” reading of
the statute. Instead, the commenter opined
that the interpretation in the proposed reg-
ulations is correct and that the affordabil-
ity rule in the 2013 regulations reflected
an erroneous interpretation of the ACA.
Finally, one commenter stated that the
2013 regulations implementing section
36B badly misinterpret the statute and
that section 36B mandates a family-based
affordability test. The commenter noted
that if Congress had intended a self-only
test, it would have mandated that cover-
age be deemed affordable for a related
family member so long as the employee
can afford self-only coverage, rather than
obliquely stating that the special rule
applies to related family members as well.
For reasons explained in section III of
this Summary of Comments and Expla-
nation of Revisions, the Treasury Depart-
ment and the IRS have concluded that the
affordability rule for related individuals in
the proposed regulations, as finalized in
these regulations, is the better reading of
the statute and the better means of imple-
menting the statute. Further, the Treasury
Department and the IRS believe that the
affordability rule in these final regulations
is consistent with the goal of the ACA
to provide access to affordable, quality
health care for all Americans.
12
Indeed,
under the 2013 regulations, some family
members of employees could not access
any PTC for Exchange coverage even if
their only offer of employer coverage was
a family plan with exorbitant premiums
(about 16% of income, on average),
13

solely because the employee had access to
affordable self-only coverage.
As explained earlier in this section
II.A of the Summary of Comments and
Explanation of Revisions, the Treasury
Department and the IRS disagree with
commenters who argued that section
36B unambiguously establishes a single
affordability test for both employees and
related individuals that is based on the cost
11
The term “employee” would not be replaced with “related individual” here because it is the employee who makes contributions (through salary reduction or otherwise) to pay for employer
coverage, even if the employer coverage includes family members of the employee.
12
See H.R. Rep. No. 111-443 (2009).
13
https://www.healthaffairs.org/doi/10.1377/hlthaff.2015.1491.

November 7, 2022 414 Bulletin No. 2022–45
of self-only coverage to the employee.
Some of these commenters argued that,
because section 36B(c)(2)(C)(i)(II) does
not cross-reference section 5000A(e)(1)
(C) in defining the term “required contri-
bution,” section 5000A(e)(1)(C) cannot
be considered in determining whether a
related individual has been offered afford-
able employer coverage for purposes of
section 36B. One of those commenters
also argued that, under the negative-impli-
cation canon of statutory interpretation,
14

the reference to section 5000A(e)(1)(A) in
section 5000A(e)(1)(C) precludes the use
of the rule in section 5000A(e)(1)(C) for
other purposes, such as providing a ratio-
nale for an affordability test in section
36B for related individuals that is separate
from the test for employees.
The Treasury Department and the IRS
disagree. As noted in the Background sec-
tion and earlier in this section II.A. of the
Summary of Comments and Explanation
of Revisions, the definition of “required
contribution” in section 5000A(e)(1)(B)
(i) is modified by a “special rule” in sec-
tion 5000A(e)(1)(C) that is applicable to
related individuals. Section 5000A(e)(1)
(C) provides that “[f]or purposes of [sec-
tion 5000A(e)(1)](B)(i), if an applicable
individual is eligible for minimum essen-
tial coverage through an employer by
reason of a relationship to an employee,
the determination under subparagraph
(A) shall be made by reference to [the]
required contribution of the employee.”
The regulations under section 5000A
interpret section 5000A(e)(1)(C) as mod-
ifying the required contribution rule in
section 5000A(e)(1)(B)(i) regarding cov-
erage for related individuals to take into
account the cost of covering the employee
and the related individuals, not just the
employee. Specifically, §1.5000A-3(e)(3)
(ii)(B) provides that the required contribu-
tion for related individuals is the amount
an employee must pay to cover the
employee and the related individuals who
are included in the employee’s family.
15

Because section 5000A(e)(1)(C) begins
with the language “[f]or purposes of [sec-
tion 5000A(e)(1)](B)(i),” the parenthetical
cross reference in section 36B(c)(2)(C)(i)
(II) to section 5000A(e)(1)(B)(i) incorpo-
rates the special rule in section 5000A(e)
(1)(C) and modifies section 5000A(e)(1)
(B)(i) when the coverage in question is for
related individuals. Accordingly, a spe-
cific reference to section 5000A(e)(1)(C)
in the flush language of section 36B(c)(2)
(C)(i) is not necessary to require the con-
sideration of section 5000A(e)(1)(C) for
determining whether coverage offered
to related individuals is affordable under
section 36B.
In addition, the Treasury Department
and the IRS disagree that the negative-im-
plication canon of statutory construction
compels the conclusion that the refer-
ence to section 5000A(e)(1)(A) in section
5000A(e)(1)(C) precludes the use of the
rule in section 5000A(e)(1)(C) for section
36B purposes. As the Supreme Court has
emphasized in numerous cases, the force
of any negative implication depends on
the context, and the negative-implica-
tion canon applies only when circum-
stances support a sensible inference that
the term left out must have been meant
to be excluded. See, for example, Chev-
ron U.S.A. Inc. v. Echazabal, 536 U.S. 73,
81 (2002) (“The [negative-implication
canon] is fine when it applies, but this case
joins some others in showing when it does
not.”); United States v. Vonn, 535 U.S.
55, 65 (2002) (“At best, as we have said
before, the [negative-implication canon]
is only a guide, whose fallibility can be
shown by contrary indications that adopt-
ing a particular rule or statute was proba-
bly not meant to signal any exclusion of
its common relatives”); United Domin-
ion Industries v. United States, 532 U.S.
822, 836 (2001) (“But here, as always,
the soundness of the [negative-implica-
tion canon] is a function of timing”).
16

See also Antonin Scalia & Bryan Garner,
Reading Law: The Interpretation of Legal
Texts 107 (2012), stating that the nega-
tive-implication canon “must be applied
with great caution since its application
depends so much on context.” Here, the
context points in favor of not restricting
the use of section 5000A(e)(1)(C) to the
determination in 5000A(e)(1)(A). Instead,
the context points in favor of reading the
reference in section 36B(c)(2)(C)(i) to
section 5000A(e)(1)(B) as incorporating
the modification of that subparagraph in
section 5000A(e)(1)(C). This reading cre-
ates a clear and consistent rule for deter-
mining the affordability of coverage for
related individuals for purposes of both
section 36B and section 5000A. And, as
explained earlier in this section II.A. of
the Summary of Comments and Explana-
tion of Revisions, without incorporating
section 5000A(e)(1)(C), the statute would
point only to a calculation of affordabil-
ity for the employee’s coverage, even
though section 36B requires a calculation
of affordability for the related individuals
as well.
Moreover, had Congress intended sec-
tion 5000A(e)(1)(C) to apply only to the
affordability determination under section
5000A, excluding all other provisions,
it could have done so through explicit
means, such as using the language “solely
for purposes of the determination under
section 5000A(e)(1)(A).” See, for exam-
ple, section 4980H(c)(2)(D) and section
4980H(c)(2)(E), also enacted under the
ACA and which provide “solely for pur-
poses of” limiting language. No such
limiting language is included in section
5000A(e)(1)(C). More generally, had
Congress intended a self-only affordabil-
ity test for related individuals, it could
have explicitly provided that coverage
is affordable for a related individual so
14
The negative-implication canon of construction – expressio unius est exclusio alterius — means the expression of one thing implies the exclusion of the other.
15
For purposes of this exemption for unaffordable coverage, an employee or related individual who is otherwise exempt under §1.5000A–3 is not included in determining the required
contribution.
16
Notably, in U.S. Venture, Inc. v. United States, 2 F.4th 1034 (7th Cir. 2021), the court rejected an argument by a taxpayer that the negative-implication canon of statutory interpretation
required an outcome consistent with the taxpayer’s interpretation of a provision of the Internal Revenue Code. The question considered by the court was whether a taxpayer’s sale of a butane
and gasoline mix qualified for the alternative fuel mixture credit in section 6426 of the Code. In discussing whether the sale of the butane and gasoline mix should qualify for the credit, the
court rejected the taxpayer’s argument that a specific cross reference in section 6426(e) to section 4083(a)(1) for the definition of a term in section 6426(e) forecloses using a third provision,
section 4083(a)(2), to further illuminate the definition in section 4083(a)(1). The court “decline[d]” the taxpayer’s invitation “to follow a congressionally mandated cross-reference only part
of the way. Instead, we must accept and follow the cross-referenced definition in full.” U.S. Venture, Inc., 2 F.4th at 1042. “Whether the cross-reference is to the individual sub-paragraphs or
to the whole statute does not change the meaning that Congress chose to give “gasoline” in § 4083 and, consequently, in § 6426(e).” Id.

Bulletin No. 2022–45 415 November 7, 2022
long as the employee is offered afford-
able self-only coverage. Congress did
just that in 2016 when it enacted section
36B(c)(4), relating to the affordability of
employer coverage under a qualified small
employer health reimbursement arrange-
ment (QSEHRA).
Under section 36B(c)(4)(A), a PTC is
not allowed for a month for the Exchange
coverage of “an employee (or any spouse
or dependent of such employee) if for
such month the employee is provided a
[QSEHRA] which constitutes affordable
coverage.” A QSEHRA is affordable for
a month if the excess of (1) the monthly
premium for the second lowest cost sil-
ver plan for self-only coverage of the
employee offered in the Exchange for the
rating area in which the employee resides,
over (2) 1/12 of the employee’s permitted
benefit (as defined in section 9831(d)(3)
(C)) under the QSEHRA, does not exceed
1/12 of 9.5 percent of the employee’s
household income.
In contrast to the language in section
36B(c)(2)(C)(i)(II), section 36B(c)(4)
(A) does not reference section 5000A(e)
(1)(B) for the QSEHRA affordability
determination or provide that “this clause
shall also apply” to a related individual.
Instead, it provides the same affordabil-
ity rule for both employees and related
individuals by stating that affordability
for coverage under a QSEHRA for “an
employee (or any spouse or dependent of
such employee)” is based on the cost of
self-only coverage of the employee. That
is far different from the language in sec-
tion 36B(c)(2)(C)(i)(II) and, therefore, it
is reasonable to conclude that the afford-
ability rule in section 36B(c)(2)(C)(i)(II)
for related individuals is not the same as
the affordability rule for related individu-
als in section 36B(c)(4)(A).
Additionally, the structure and context
of sections 36B and 5000A suggest that
Congress did not intend to preclude the
use of section 5000A(e)(1)(C) in deter-
mining the affordability of employer cov-
erage for related individuals for purposes
of PTC eligibility under section 36B.
Foremost, when the coverage in question
is for related individuals, section 36B(c)
(2)(C)(i)(II) specifically refers to the defi-
nition of required contribution in section
5000A(e)(1)(B)(i), and section 5000A
in turn specifically incorporates the spe-
cial rule in section 5000A(e)(1)(C) “for
purposes of” section 5000A(e)(1)(B)
(i). Under this statutory structure, a spe-
cific reference to section 5000A(e)(1)(C)
in the flush language of section 36B(c)
(2)(C)(i) is not necessary to require the
consideration of section 5000A(e)(1)(C)
in determining affordability for related
individuals for section 36B purposes. This
consideration of section 5000A(e)(1)(C)
is particularly sensible given the flush lan-
guage in section 36B(c)(2)(C)(i)(II). That
is, the flush language evinces Congress’s
intent to provide an affordability rule for
related individuals. Given that there are
numerous cross references in section 36B
to section 5000A and that section 5000A
confronts a similar situation relating to
affordability for related individuals that is
resolved through section 5000A(e)(1)(C),
it is logical to consider section 5000A(e)
(1)(C) for purposes of the affordability rule
for related individuals under section 36B.
Finally, using the rule in section 5000A(e)
(1)(C) in determining the affordability of
employer coverage for related individuals
for section 36B purposes supports the goal
of the ACA to provide affordable, quality
health care for all Americans. See H.R.
Rep. No. 111-443 (2009).
B. Consistency between the affordability
rules of sections 36B and 5000A
The preamble to the proposed regula-
tions noted that the proposed affordabil-
ity rule under section 36B would create
greater consistency between the section
36B affordability rules and the rules in
section 5000A used to determine whether
an individual is exempt from the individ-
ual shared responsibility payment under
section 5000A because employer cover-
age is unaffordable. With the finalization
of the proposed section 36B affordability
rule in these final regulations, both rules
provide that affordability for employees
is based on the employee’s cost for self-
only coverage and that affordability for
family members is generally based on the
amount an employee must pay to cover
the employee and the related individuals
included in the employee’s family. Thus,
these final regulations promote consis-
tency between these two affordability
rules.
One commenter argued that Congress
did not intend the affordability rules of
section 36B and section 5000A to be con-
sistent, suggesting that it instead sought
to make it easier for a taxpayer to avoid
a section 5000A individual shared respon-
sibility payment for a related individual
than to qualify for a PTC for such indi-
vidual. In other words, the commenter
seems to be suggesting that Congress’s
intent was to make it easier to go without
health insurance coverage than to qualify
for subsidized Exchange coverage. How-
ever, the commenter does not point to any
evidence of this beyond the assertion that
the statutory text compels this result. As
explained above, the Treasury Depart-
ment and the IRS disagree with the com-
menter’s reading of the statutory text. The
commenter’s argument also ignores Con-
gress’s broader goal of expanding access
to affordable health insurance coverage
through the ACA, which goal is advanced
by the affordability rule for related indi-
viduals in these final regulations.
C. Legislative history of ACA
One commenter also argued that the
legislative history underlying the ACA
shows that Congress intended that the
rule for affordability of employer cover-
age for family members be the same as
the affordability rule for employees and
that both determinations are intended to
be based on the cost of self-only coverage
to the employee. The argument is that S.
1796, the America’s Healthy Future Act
of 2009
17
(one of the Senate bills that
became the ACA through consolidation
with another bill
18
and amendment), as
introduced, based the determination of
the affordability of employer-sponsored
coverage on the employee’s required con-
tribution, as defined by (what was in that
version of the bill) section 5000A(e)(2),
17
111
th
Congress (2009).
18
H.R. 3590, 111
th
Congress (2009).

November 7, 2022 416 Bulletin No. 2022–45
which would have set affordability tests
for both self-only and family coverage.
The commenter further argued that,
when the bill that became the ACA was
introduced on the Senate floor, it altered
the language of S. 1796 to reflect the lan-
guage currently in the statute, in which
the required contribution is described as
“within the meaning of section 5000A(e)
(1)(B).” In the commenter’s view, this
change demonstrates that the required
contribution rule in section 5000A(e)(1)
(C) does not apply to the section 36B
affordability test for related individuals.
The commenter asserted that the proposed
regulations fail to consider the changes
to S. 1796 because the affordability test
under the proposed regulations reflects
exactly how the required contribution
for related individuals would have been
determined had these changes not been
made.
The Treasury Department and the IRS
disagree that the change in legislative lan-
guage on the Senate floor described by
the commenter indicates that Congress
intended that affordability for related
individuals must be based on the cost of
self-only coverage to the employee. At
the same time that the legislative sponsors
added the language to section 36B that
cross-references section 5000A(e)(1)(B),
they also added the introductory phrase
to section 5000A(e)(1)(C) clarifying that
that subparagraph applies “for purposes
of” subparagraph (e)(1)(B). The fact that
the legislative sponsors made both of these
changes at the same time indicates that
they understood that section 36B would
incorporate both subparagraphs into its
affordability rule. Moreover, as noted by
a number of commenters supportive of
the proposed regulations, had Congress
intended an identical affordability rule
for employees and related individuals, the
flush language in section 36B(c)(2)(C)(i)
would not have been necessary. For exam-
ple, Congress could simply have stated
that affordability for an employee (or any
spouse or dependent of such employee) is
based on the cost of self-only coverage of
the employee. Indeed, as explained in sec-
tion II.A. of this Summary of Comments
and Explanation of Revisions, Congress
did exactly that when it enacted the afford-
ability rules for QSEHRAs in section
36B(c)(2)(4). That, however, is not the
direction that Congress chose to take with
its changes to S. 1796. Instead, Congress
enacted two rules, one for employees and
one for related individuals. Consequently,
it is reasonable to conclude that Con-
gress’s use of separate rules for employees
and related individuals indicates an intent
to provide separate tests for an employee,
based on the cost of self-only coverage to
the employee, and for related individuals,
based on the cost of the coverage for the
employee and those related individuals.
D. Legislative proposals to change
affordability rule
Several commenters also argued that a
change to the affordability rule for related
individuals should be accomplished by
legislative action, rather than regula-
tory action. They argued that, despite
requests to amend section 36B to provide
that affordability of employer coverage
for related individuals is based on the
employee’s cost for family coverage, Con-
gress has not amended section 36B to spe-
cifically command this result. In addition,
they noted that Congress has included lan-
guage in various bills to amend the afford-
ability rule, but the proposed legislation
has not been enacted. The commenters
asserted that this Congressional inac-
tion means that the Treasury Department
and the IRS are not empowered to issue
regulations to address a matter that Con-
gress acknowledges must be addressed in
legislation.
Although the commenters are correct
that members of Congress have included
language in various bills to address the
section 36B affordability rule in section
36B(c)(2)(C)(i), the introduction of pro-
posed legislation is not an acknowledge-
ment by Congress that the section 36B
affordability test for related individuals
must be addressed in legislation and not
by regulation. As the Supreme Court has
emphasized, “failed legislative proposals
are a particularly dangerous ground on
which to rest an interpretation of a prior
statute [internal quotations omitted] . . .
Congressional inaction lacks persuasive
significance because several equally ten-
able inferences may be drawn from that
inaction, including the inference that the
existing legislation already incorporated
the offered change.” Central Bank of
Denver, N.A. v. First Interstate Bank of
Denver, N.A., 511 U.S. 164, 187 (1994)
(quoting Pension Benefit Guaranty Cor-
poration v. LTV Corp., 496 U.S. 633, 650
(1990)). Here, for instance, it is possible
that legislative proposals were introduced
not because of insufficient language in
the ACA, but because members of Con-
gress believed that the 2013 regulations
had incorrectly interpreted the existing
language of the ACA. Although Congress
may not have enacted legislation specif-
ically and unequivocally mandating the
approach taken in these final regulations,
the Treasury Department and the IRS have
determined that existing section 36B(c)
(2)(C)(i) is better interpreted to require
separate affordability determinations for
employees and for family members, as set
forth in §1.36B-2(c)(3)(v)(A)(2) of these
final regulations.
E. Interpretation of Joint Committee on
Taxation report
In a footnote in the preamble to the
proposed regulations, the Treasury
Department and the IRS observed that in
the Joint Committee on Taxation report,
Technical Explanation of the Revenue
Provisions of the ”Reconciliation Act of
2010,” as amended, in combination with
the “Patient Protection and Affordable
Care Act,” (JCX-18-10), March 21, 2010
(JCT report), the staff of the Joint Com-
mittee on Taxation (Joint Committee staff)
initially explained that “[u]naffordable
is defined as coverage with a premium
required to be paid by the employee that
is 9.5 percent or more of the employee’s
household income, based on the type of
coverage applicable (e.g., individual or
family coverage).” The Joint Committee
staff later revised the quoted language,
after the enactment of the ACA, to state
that “[u]naffordable is defined as coverage
with a premium required to be paid by the
employee that is 9.5 percent or more of
the employee’s household income, based
on self-only coverage.” ERRATA for JCX-
18-10, (JCX-27-10), May 4, 2010 (May
2010 Errata).
A few commenters expressed the view
that the original JCT report was in error
and should not be viewed as evidence
that the statutory language in section
36B(c)(2)(C)(i)(II) supports a separate

Bulletin No. 2022–45 417 November 7, 2022
affordability rule based on the cost of fam-
ily coverage; these commenters noted that
the May 2010 Errata corrected the error.
The Treasury Department and the IRS
acknowledge that the Joint Committee
staff characterized the May 2010 Errata as
a correction of an error but disagree with
the commenters as to the relevance of that
observation. The May 2010 Errata was not
before Congress at the time that the ACA
was enacted in March 2010. In any event,
neither the JCT report nor the May 2010
Errata is considered part of the legislative
history, and neither is dispositive of any
particular statutory interpretation.
F. Relevance of section 18081
The preamble to the proposed regula-
tions noted that the proposed regulations
would promote consistency between the
affordability rules in sections 36B and
5000A and the rule in 42 U.S.C. 18081(b)
(4)(C) (section 18081(b)(4)(C)). Section
18081(b)(4)(C) relates to information
that a QHP enrollee must provide as part
of the enrollee’s QHP application if the
enrollee wants to be determined eligible
for advance payments of the PTC (APTC)
or cost-sharing reductions. Under section
18081(b)(4)(C), if an employer offers
minimum essential coverage to an indi-
vidual seeking to enroll in a QHP, and
the individual asserts that the offer does
not preclude the individual from qualify-
ing for APTC or cost-sharing reductions
because it is not affordable, the QHP appli-
cant must provide to the Exchange infor-
mation on “the lowest cost option for the
enrollee’s or [related] individual’s enroll-
ment status and the enrollee’s or [related]
individual’s required contribution (within
the meaning of section 5000A(e)(1)(B)
of title 26) under the employer-sponsored
plan.”
Certain commenters opined that they
saw no inconsistency between the 2013
affordability rule under section 36B, the
affordability rule under section 5000A,
and the QHP applicant information rule
in section 18081(b)(4)(C). One com-
menter stated that section 18081(b)(4)
(C), by referencing section 5000A(e)
(1)(B), merely instructs Exchanges to
determine “the portion of the annual pre-
mium which would be paid by the indi-
vidual ... for self-only coverage” under
the employer-sponsored plan. Another
commenter argued that section 18081(b)
(4)(C), by using the term “or” and not
“and,” requires the submission of infor-
mation on the required contribution
solely for the employee who is offered
employer coverage, meaning the indi-
vidual who would pay the required con-
tribution, but that the individual enroll-
ing in the QHP could be the employee
or someone related to the employee. This
commenter further argued that in either
case, the only information required by
section 18081(b)(4)(C) is the lowest cost
option for self-only coverage and the
required contribution for the applicable
employee.
The Treasury Department and the IRS
agree with the commenter who noted
that section 18081(b)(4)(C) requires
the submission of information on the
required contribution solely for the
employee who is offered employer cov-
erage and that the individual enrolling
in the QHP could be the employee or
someone related to the employee. How-
ever, the Treasury Department and the
IRS disagree with the conclusion of both
commenters that section 18081(b)(4)(C)
requires Exchanges to collect informa-
tion on only the portion of the annual
premium that would be paid by the
employee for self-only coverage under
the employer-sponsored plan.
Section 18081 requires Exchanges to
collect information from enrollees who
are offered coverage under an employer
plan on “the lowest cost option” that the
employee, whether the enrollee or an
individual related to the enrollee, must
contribute for the employee’s or indi-
vidual’s enrollment status. The language
“lowest cost option for the . . . enrollment
status” indicates that the amount may
vary depending on whether the employ-
ee’s enrollment status would be for self-
only or family coverage. Otherwise, sec-
tion 18081(b)(4)(C) would refer to “the
lowest cost option for the enrollee for
self-only coverage.” Thus, the Treasury
Department and the IRS are of the view
that the amendment to §1.36B-2(c)(3)(v)
(A)(2) in these final regulations and the
similar affordability rule in §1.5000A-
3(e)(3)(ii)(B) are consistent with the
QHP applicant information rule in sec-
tion 18081(b)(4)(C).
G. Coordination with section 4980H
One commenter asserted that the
framework of section 4980H supports
the view that a separate affordability test
under section 36B for related individuals
is not warranted. Section 4980H provides
that an applicable large employer (ALE)
generally must offer coverage to full-time
employees and their dependents or poten-
tially be subject to an employer shared
responsibility payment. As the commenter
noted, although ALEs are required to
offer coverage to full-time employees and
dependents, only the coverage offered
to the full-time employees is required to
be affordable. There is no comparable
affordability rule for the coverage offered
to dependents. In addition, an employer’s
obligation to make a payment under sec-
tion 4980H is triggered only when a full-
time employee is allowed a PTC.
The commenter stated that the afford-
ability of self-only coverage is the key
determinant in whether an employer of
a full-time employee must make a sec-
tion 4980H payment and in whether the
full-time employee and his or her depen-
dents are allowed a PTC. The commenter
argued that this framework shows Con-
gress’s intent that section 36B and section
4980H have just one affordability test
based on the cost of self-only coverage
to the employee and that providing an
affordability test for related individuals
based on the cost of family coverage is not
consistent with that framework.
The Treasury Department and the IRS
disagree. Section 36B and section 4980H
apply to different types of taxpayers and
have different purposes. Section 36B pro-
vides a PTC to taxpayers and their fam-
ilies who meet certain requirements, one
of which is that they are not eligible for
affordable, minimum value coverage from
their employer. The amount of the PTC
is determined based on family size and
household income, among other factors,
in recognition of the fact that affordabil-
ity of coverage depends on the cost to
the family. The PTC is integral to ensur-
ing that individuals and their families
can access affordable coverage through
an Exchange. In contrast, section 4980H
imposes a payment on ALEs if they fail to
offer minimum essential coverage to their
full-time employees and their dependents,

November 7, 2022 418 Bulletin No. 2022–45
and at least one full-time employee is
allowed a PTC. Section 4980H does not
require that employer coverage be offered
to an employee’s spouse, and it does
not require that any coverage offered to
spouses or dependents be affordable. Fur-
ther, employers do not owe a payment
under section 4980H if a PTC is allowed
for an employee’s spouse or dependent.
The purpose of this provision is to ensure
that large employers share responsibility
under the ACA for providing affordable
health coverage to employees, but this
responsibility does not extend to afford-
able coverage for spouses or dependents.
Given these differing purposes, there is
nothing in this framework that suggests
Congress intended for section 36B and
section 4980H to have a single affordabil-
ity test based on the cost of self-only cov-
erage to the employee.
In addition, the goal of the ACA is to
provide affordable, quality health care
for all Americans,
19
not just to full-time
employees of ALEs, and these final reg-
ulations further that goal. In light of that
goal, and contrary to the suggestion of the
commenter, the lack of any requirement
under section 4980H for ALEs to offer
affordable coverage to family members of
employees indicates that a PTC should be
allowed for family members offered unaf-
fordable coverage.
H. Minimum value rule
As noted in the Background section of
this preamble, an employee generally is not
treated as eligible for coverage under an
eligible employer-sponsored plan unless
the coverage provides minimum value, as
defined in section 36B(c)(2)(C)(ii). Under
section 36B(c)(2)(C)(ii) and §1.36B-6(a)
(1), an eligible employer-sponsored plan
provides minimum value if the plan’s
share of the total allowed costs of benefits
provided to an employee is at least 60 per-
cent, regardless of the total allowed costs
of benefits.
The proposed regulations provided
a minimum value rule for related indi-
viduals that is based on the plan’s share
of the total allowed cost of benefits pro-
vided to the related individuals. Under the
proposed regulations, an eligible employ-
er-sponsored plan satisfies the minimum
value requirement for related individuals
only if the plan’s share of the total allowed
costs of benefits provided to related indi-
viduals is at least 60 percent, similar to
the existing rule in §1.36B-6(a)(1) for
employees.
The vast majority of commenters sup-
ported the separate minimum value rule
for related individuals in the proposed
regulations. However, two commenters
stated that the minimum value requirement
in section 36B applies only to employees
and that the Treasury Department and the
IRS have no authority to provide a min-
imum value rule for related individuals.
In the view of these commenters, related
individuals are eligible for employer cov-
erage if the coverage is affordable, even if
the plan’s share of the total allowed costs
of benefits provided to related individuals
is below 60 percent. This approach, how-
ever, is contrary to the approach taken in
current §1.36B-2(c)(3)(i)(A), which was
promulgated in final regulations in 2012.
See TD 9590 (77 FR 30377). Section
1.36B-2(c)(3)(i)(A) clarifies that there is
a minimum value requirement for both
employees and related individuals, stat-
ing that “an employee who may enroll in
an eligible employer-sponsored plan . . .
that is minimum essential coverage, and
an individual who may enroll in the plan
because of a relationship to the employee
(a related individual), are eligible for mini-
mum essential coverage under the plan for
any month only if the plan is affordable
and provides minimum value.” Under this
long-standing rule, a related individual
who receives an offer of employer cover-
age that does not provide minimum value
is deemed to be ineligible for the cover-
age, and a PTC may be allowed for the
related individual provided that the related
individual does not enroll in the coverage.
The proposed regulations did not propose
to revisit this long-standing rule.
Further, as stated in the preamble to the
proposed regulations, without a separate
minimum value rule for related individu-
als based on the costs of benefits provided
to related individuals, a PTC would not be
allowed for a related individual offered
coverage under a plan that was afford-
able but provided minimum value only to
employees and not to related individuals.
This outcome would diminish the benefit
a related individual would derive from the
amendment of the affordability rule for
related individuals. That is, the affordabil-
ity of employer coverage for related indi-
viduals would be based on the employee’s
cost of covering the related individuals,
but there would be no assurance that the
affordable coverage offered to the related
individuals provided a minimum value of
benefits to the related individuals.
Moreover, as described by comment-
ers supportive of the minimum value rule
for related individuals, it is extremely rare
for an employer plan to provide a differ-
ent level of coverage for family mem-
bers than the coverage level provided to
the employee enrolled in the plan. This is
because most employers that offer mul-
tiple benefits packages offer family cov-
erage on the condition that the employee
and the employee’s family must enroll
in the same benefits package, which will
then have the same minimum value for
the entire family. Thus, if an employer
plan offered to employees provides min-
imum value, and that plan is also offered
to related individuals, the plan generally
will also provide minimum value to the
family members. Nevertheless, because
the lack of a separate minimum value rule
for related individuals would be inconsis-
tent with the goals of the ACA in provid-
ing comprehensive health coverage and
improving access to quality and afford-
able health care, the final regulations pro-
vide that an eligible employer-sponsored
plan provides minimum value for related
individuals only if the plan’s share of the
total allowed costs of benefits provided to
related individuals is at least 60 percent
and the plan benefits include substantial
coverage of inpatient hospital services and
physician services.
III. Rationale for change
At the time that the Treasury Depart-
ment and the IRS promulgated the 2013
regulations, limited information was
available to model the effects of an
19
See H.R. Rep. No. 111-443 (2009).

Bulletin No. 2022–45 419 November 7, 2022
affordability rule for related individuals
based on the cost of family coverage.
In the years since the 2013 regulations
became effective in 2014, however, the
Treasury Department and the IRS have
learned more about how the ACA is
affecting individuals, families, employ-
ers, group health plans, health insur-
ance markets, and other stakeholders.
For example, in 2017, the Congressional
Budget Office (CBO) determined that
2010 reports by CBO and JCT on the
budgetary effects of the ACA dramati-
cally overstated the cost of the PTC.
20

In the 2017 report, the CBO noted that,
to a great extent, the differences arose
because actual results deviated from the
agencies’ expectations about how the
economy would change and how people
and employers would respond to the law,
and that, to a lesser extent, the differences
were caused by judicial decisions, statu-
tory changes, and administrative actions
that followed the ACA’s enactment.
Despite the initial uncertainty about
the ACA’s effects, there has been sub-
stantial progress over the past several
years toward meeting the goal of the ACA
to give all Americans the opportunity to
enroll in comprehensive health insurance
at an affordable price. For individuals
who were previously uninsured, the ACA
expanded eligibility for Medicaid and cre-
ated new Exchanges for eligible individ-
uals to purchase QHPs subsidized by the
PTC. Research has shown that these poli-
cies increased access to affordable health
insurance and helped reduce the share of
the population that was uninsured.
21
Despite this progress, roughly 26 mil-
lion people still lack health insurance cov-
erage. About 8 percent of the population
is still uninsured.
22
Because these people
without health coverage face large, unpre-
dictable bills when they seek medical care,
many forgo necessary treatments. The key
challenge for these families in obtaining
coverage is the cost of coverage. Accord-
ing to the National Health Interview Sur-
vey, nearly 75 percent of uninsured adults
reported the main reason they were unin-
sured was because the coverage options
available to them were not affordable.
23

Additionally, millions of adults reported
that in order to save money, they did not
get needed medical care or take medica-
tion as prescribed.
24

Premium costs are particularly chal-
lenging for families enrolling in employer
coverage. Since the 2013 regulations
were promulgated, the average annual
employee contribution for family cov-
erage has increased by over 30 percent
— a growth rate that is nearly double the
rate at which the Consumer Price Index
increased over the same period.
25
In 2021,
the average annual employee contribution
for a family plan offered by the employer
was $5,969. Contributions were even
higher for employees at small firms who
faced an average cost of $7,710. Roughly
12 percent of workers offered health cov-
erage would have had to pay over $10,000
to cover their entire family.
26
Under the
2013 regulations, these families are not
eligible for the PTC if the self-only cov-
erage offer is affordable, even if the cost
of family coverage exceeds their annual
income. Without access to affordable cov-
erage from either their employer or the
Exchange, some low- and middle-income
families are unable to obtain coverage and
must go uninsured.
For families that can afford employer
coverage, the coverage is sometimes of
limited value because of high levels of
cost-sharing. In 2020, roughly 90 per-
cent of employer plans had a deductible.
27

Among family plans offered by employers
with a deductible, the average amount of
the deductible was roughly $3,722. After
families reach their deductible, they are
usually liable for co-insurance or co-pay-
ments until they hit their out-of-pocket
maximum. For 2020, the average out-
of-pocket maximum for a family plan
offered by employers was $8,867. There
is also clear evidence that high levels of
cost-sharing can restrict access to nec-
essary medical care and lead to adverse
health outcomes.
28

Thus, although the ACA has suc-
ceeded in providing affordable health
care to millions of Americans, some still
cannot afford coverage. With increas-
ingly higher premiums and out-of-pocket
costs, the cost of family coverage offered
by employers has become particularly
unaffordable for some employees’ fam-
ily members. The self-only affordability
rule for related individuals in the 2013
regulations exacerbates that problem.
Although the Treasury Department and
the IRS could speculate in 2010-2013
that the self-only affordability rule might
adversely affect certain families, the data
and subsequent analysis have now borne
out those adverse effects.
In addition to the data provided in the
studies cited above, numerous health care
advocates have written articles over the
years describing the adverse effects of
the 2013 affordability rule and recom-
mending a rule change.
29
Most recently,
the proposed regulations themselves gen-
erated over 3,800 comments in support
of the proposed rule. As noted earlier in
this preamble, many of these comment-
ers recounted personal stories of family
members being uninsured due to the unaf-
fordability of family coverage offered
by an employer and the unavailability of
a PTC for Exchange coverage. Finally,
individuals have shared stories in other
forums regarding the negative impact of
the 2013 affordability rule on their lives.
For example, one married couple testified
to a state legislature that they divorced
solely to retain the husband’s eligibility
for the PTC after his wife got a new job
with an offer of family coverage at a cost
20
See https://www.cbo.gov/system/files/115th-congress-2017-2018/reports/53094-acaprojections.pdf.
21
https://onlinelibrary.wiley.com/doi/epdf/10.1002/pam.22158.
22
https://aspe.hhs.gov/reports/2022-uninsurance-at-all-time-low.
23
https://www.cdc.gov/nchs/data/databriefs/db382-H.pdf.
24
https://www.cdc.gov/nchs/data/nhis/earlyrelease/earlyrelease202204.pdf.
25
https://www.bls.gov/cpi/data.htm.
26
https://www.kff.org/health-costs/report/2021-employer-health-benefits-survey/.
27
https://www.meps.ahrq.gov/data_files/publications/cb25/cb25.pdf.
28
https://academic.oup.com/qje/article-abstract/132/3/1261/3769421; https://www.nber.org/papers/w28439.
29
See, for example, Trapped by the Firewall: Policy Changes Are Needed to Improve Health Coverage for Low-Income Workers | Center on Budget and Policy Priorities (cbpp.org); https://
www.healthaffairs.org/do/10.1377/forefront.20210520.564880/.

November 7, 2022 420 Bulletin No. 2022–45
of $16,000, over half of the husband’s
annual earnings.
30

Consistent with EO 14009, issued in
January 2021, the Treasury Department
and the IRS undertook a review of the
affordability rule for family members in
the 2013 regulations at §1.36B-2(c)(3)(v)
(A)(2). As part of this review, the Treasury
Department and the IRS reconsidered the
text of the relevant statutes and whether
the 2013 affordability rule represents the
best reading of that text. As explained
above, the Treasury Department and
the IRS now believe (in contrast to their
view in 2013) that the 2013 affordabil-
ity rule did not represent the best read-
ing of the statutory text. The Treasury
Department and the IRS also considered
the evidence described above from the
intervening years and evaluated whether
the 2013 affordability rule is inconsistent
with the overall goal of the ACA in pro-
viding comprehensive, affordable health
coverage, as well as the goal of improv-
ing access to quality and affordable health
care.
31
This evaluation was informed by
the experience of the intervening years
since Exchange coverage and the PTC
first became available. The evaluation
demonstrated adverse impacts of the 2013
regulations on families and prompted the
Treasury Department and the IRS to issue
the proposed regulations and solicit public
comments.
In addition, the Treasury Department
and the IRS now have a clearer idea of
the potential cost and the coverage bene-
fits of changing the affordability rule, in
part because of the time that has elapsed
since the issue was last considered and
the experiences of different insurance
markets during that time. For example,
analysis has shown how adopting the poli-
cies in the final rule would increase access
to affordable Exchange coverage.
32
Newly
insured individuals will receive substan-
tial benefits. Recent academic research
suggests that enrollment in Exchange
coverage provides financial protection
and improves health outcomes.
33
Sev-
eral commenters on the proposed regula-
tions also cited publicly available studies
that estimate the impact of the proposed
affordability rule for related individuals
on Federal outlays and revenues.
In addition, several commenters cited
publicly available studies that estimate
how changing the affordability rule for
related individuals could affect the num-
ber of people with health insurance cover-
age.
34
One commenter presented estimates
based on their own simulation of health
insurance coverage decisions. Another
commenter cited a study that focused spe-
cifically on the state of California.
35
Since
the comment period on the proposed reg-
ulations ended, analysts have continued
to estimate the impact of changing the
affordability rule.
36

The studies cited by commenters
found that implementing a policy similar
to the affordability rule described in the
proposed regulations would increase the
number of individuals eligible for finan-
cial assistance by between 3 million and
5.1 million. Other studies project that, out
of those newly eligible, between 600,000
and 2.3 million individuals would choose
to enroll in Exchange coverage.
37
Esti-
mates of the number of people who would
be newly insured range from 80,000
to 700,000. These studies estimate that
this change in eligibility and subsequent
enrollment would increase the Federal
deficit by between approximately $2.6 bil-
lion and $4.5 billion per year on average.
The studies also discussed which types
of families would be most likely to ben-
efit from the proposed affordability rule
for related individuals. Families with
incomes below 250 percent of the Federal
poverty level and families with employ-
ees who work for small employers were
expected to benefit the most. One study
found that workers in industries such as
service, agriculture, mining, and construc-
tion were more likely to be eligible for a
PTC.
38
Another study estimated that fami-
lies switching from employer coverage to
Exchange coverage would save an aver-
age of about $400 per person in premiums
per year.
39
The studies also discussed how
certain qualifying individuals would ben-
efit from cost-sharing reductions that are
available for certain qualified individuals
enrolling in Exchange coverage.
These studies provide a range of esti-
mated impacts on health coverage status
and the Federal deficit. Each study relies
on different data sources, modeling tech-
niques, behavioral assumptions, and bud-
getary baselines. Additionally, the policies
they simulate are different than the exact
set of policies being adopted in the final
regulations. The Treasury Department and
the IRS also note that there is a substantial
amount of uncertainty in estimating the
impact of the policy change.
40

In addition to these studies – those cited
by commenters, as well as others reviewed
by the Treasury Department and the IRS –
the Treasury Department’s Office of Tax
Analysis has conducted its own analysis
as to the effect of the policy change on
health insurance coverage decisions and
the Federal deficit. The policy change is
30
See https://legislature.maine.gov/legis/bills/getTestimonyDoc.asp?id=161949.
31
See H.R. Rep. No. 111-443 (2009).
32
https://www.healthaffairs.org/do/10.1377/forefront.20220420.498595/.
33
https://academic.oup.com/qje/article/136/1/1/5911132; https://www.sciencedirect.com/science/article/abs/pii/S0047272718302408.
34
See https://www.kff.org/health-reform/issue-brief/the-aca-family-glitch-and-affordability-of-employer-coverage/; https://www.kff.org/health-reform/issue-brief/many-workers-particu-
larly-at-small-firms-face-high-premiums-to-enroll-in-family-coverage-leaving-many-in-the-family-glitch/; https://www.cbo.gov/system/files/2020-06/Patient_Protection_and_Affordable_
Care_Enhancement_Act_0.pdf; https://www.urban.org/research/publication/changing-family-glitch-would-make-health-coverage-more-affordable-many-families; https://www.urban.org/
research/publication/marketplace-subsidies-changing-family-glitch-reduces-family-health-spending-increases-government-costs; https://www.rand.org/pubs/research_reports/RR1296.html;
https://www.healthaffairs.org/doi/10.1377/hlthaff.2015.1491.
35
https://laborcenter.berkeley.edu/wp-content/uploads/2022/06/Fact-Sheet-Family-Glitch.pdf.
36
https://www.cbo.gov/system/files?file=2022-07/58313-Crapo_letter.pdf.
37
Some studies estimated any Exchange enrollment while other studies estimated only subsidized Exchange enrollment.
38
https://www.kff.org/health-reform/issue-brief/many-workers-particularly-at-small-firms-face-high-premiums-to-enroll-in-family-coverage-leaving-many-in-the-family-glitch/.
39
https://www.urban.org/sites/default/files/publication/104223/changing-the-family-glitch-would-make-health-coverage-more-affordable-for-many-families_1.pdf.
40
None of the studies reviewed by the Treasury Department and the IRS provided a quantitative measure of the level of uncertainty associated with their estimates. For example, the studies
did not report sensitivity checks describing how their results would change under different modeling assumptions. Additionally, none of the studies reported standard errors, a statistic that
researchers use to quantify sampling error and the significance of any differences.

Bulletin No. 2022–45 421 November 7, 2022
projected to increase the number of indi-
viduals with PTC-subsidized Exchange
coverage by about 1 million and increase
the Federal deficit by an average of $3.8
billion per year over the next 10 years.
The projections from this analysis are
within the range of predictions reported in
the cited studies. The evaluation focused
on direct, predictable effects of the reg-
ulation. Although some studies predict
the affordability rule may incidentally
increase enrollment in Medicaid or CHIP,
these effects are indirect and speculative.
Taken as whole, the Treasury Department
and the IRS conclude that these analyses
provide compelling evidence that the new
affordability rule for related individuals
will increase the affordability and acces-
sibility of health insurance. Although the
range of numbers indicate there is uncer-
tainty in the precise number of individuals
who will be affected, the studies suggest
that the final regulations will succeed in
achieving two key policy goals of the
ACA: increasing coverage and reducing
costs for consumers. These studies, and
the Treasury Department’s own analysis,
lead the Treasury Department and the IRS
to believe that the proposed affordability
rule, as finalized in these regulations, is
consistent with the overall goals of the
ACA and is based on sound reasons for a
revision to the affordability rule. Further,
as explained in section II of this Summary
of Comments and Explanation of Revi-
sions, the Treasury Department and the
IRS are of the view that section 36B(c)
(2)(C)(i) is better interpreted in a manner
that requires consideration of the premium
cost to the employee to cover not just the
employee, but also other members of the
employee’s family who may enroll in the
employer coverage. Thus, the Treasury
Department and the IRS adopt in these
final regulations the proposed affordabil-
ity rule for related individuals that is based
on the cost of family coverage because
they have concluded that such a rule is
the better reading of the statute. For the
reasons stated in section II of this Sum-
mary of Comments and Explanation of
Revisions, the Treasury Department and
the IRS have also concluded that, to the
extent there is ambiguity in the statute, the
proposed affordability rule would be the
better alternative to resolve that ambiguity
and to implement the statute in a way con-
sistent with Congress’s purposes in enact-
ing the ACA.
IV. Recommended Amendments to
Proposed Rules
A. Cost of family coverage
Under the proposed regulations, an
eligible employer-sponsored plan would
be treated as affordable for related indi-
viduals if the portion of the annual pre-
mium the employee must pay for family
coverage, that is, the employee’s required
contribution, does not exceed 9.5 percent
of household income. For this purpose,
§1.36B-2(c)(3)(v)(A)(2) of the proposed
regulations provided that an employee’s
required contribution for family cover-
age is the portion of the annual premium
the employee must pay for coverage of
the employee and all other individuals
included in the employee’s family, as
defined in §1.36B-1(d), who are offered
coverage under the eligible employ-
er-sponsored plan. Under §1.36B-1(d),
an employee’s family consists of the
employee, the employee’s spouse filing
a joint return with the employee, and the
employee’s dependents.
A few commenters requested a change
to §1.36B-2(c)(3)(v)(A)(2) of the pro-
posed regulations. Under the rule sug-
gested by the commenters, an employee’s
required contribution for family coverage
under §1.36B-2(c)(3)(v)(A)(2) would be
the portion of the annual premium the
employee must pay for coverage of the
employee and all other individuals offered
the employer coverage as a result of their
relationship to the employee, including
non-dependents of the employee who may
enroll in the employer coverage (non-fam-
ily members). As noted by the comment-
ers, many employers offer coverage to
employees’ children up to age 26 with-
out regard to whether a child is a depen-
dent of the employee.
41
The commenters
argued that including the cost to cover
all individuals offered the coverage in
an employee’s required contribution will
ensure that all of these individuals, includ-
ing non-family members, have access to
affordable coverage.
The Treasury Department and the IRS
do not adopt this comment. Under the
final regulations, as in the proposed reg-
ulations, the cost of covering individu-
als who are offered the coverage but are
non-family members is not considered in
determining whether the employee’s fam-
ily members have an offer of affordable
employer coverage. Under §1.36B-2(c)
(4)(i), an individual who may enroll in
employer coverage as a result of the indi-
vidual’s relationship to an employee, but
who is a non-family member, is treated as
eligible for the employer coverage only if
he or she is enrolled in the coverage. Con-
sequently, an individual who may enroll in
employer coverage, but who is a non-fam-
ily member, does not need a determina-
tion of unaffordable coverage to enroll
in a QHP and be eligible for the PTC, if
the individual otherwise qualifies. Unlike
family members, a non-family member
may enroll in a QHP and be eligible for
the PTC, if the individual is otherwise
eligible, by simply not enrolling in the
offered employer coverage. Accordingly,
the cost of covering non-family members
should not be considered in determining
whether other related individuals have an
offer of affordable employer coverage.
B. Determine affordability for employees
based on the cost of family coverage
Under §1.36B-2(c)(3)(v)(A)(1), an eli-
gible employer-sponsored plan is consid-
ered affordable for an employee offered
coverage under the plan if the employee’s
required contribution for self-only cover-
age does not exceed 9.5 percent of house-
hold income. The proposed regulations
do not change the affordability rule for
employees.
Several commenters requested that the
final regulations amend the affordability
rule for employees to provide that, if an
offer of employer coverage is unafford-
able for an employee’s family members,
41
Under Public Health Service Act section 2714, which is incorporated into the Code through Code section 9815 and into the Employee Retirement Income Security Act (ERISA) through
section 715 of ERISA, group health plans and health insurance issuers offering group or individual health insurance coverage that offer dependent coverage for children must make that
coverage available to employees’ children until they attain age 26. See 26 CFR 54.9815-2714, 29 CFR 2590.715-2714, and 45 CFR 147.120.

November 7, 2022 422 Bulletin No. 2022–45
the offer would also be considered unaf-
fordable for the employee. The comment-
ers noted that separate affordability rules
for employees and family members will
sometimes result in a spouse or depen-
dent of an employee having an offer of
employer coverage that is unaffordable
even though the employee has an afford-
able offer of self-only coverage. This
could cause families to enroll in multi-
ple plans or policies, the employee in the
employer plan and the family members in
a QHP, which would be burdensome and
costly for families who must navigate dif-
ferent provider networks and drug formu-
laries and incur separate deductibles and
caps on out-of-pocket spending.
Although the Treasury Department and
the IRS understand the concerns raised
by the commenters, the affordability rule
for employees is specifically provided
in section 36B(c)(2)(C)(i) and cannot be
changed by regulation. Under section
36B(c)(2)(C)(i), an employee is not eli-
gible for minimum essential coverage
under an employer plan if the employee’s
required contribution (within the meaning
of section 5000A(e)(1)(B)) with respect
to the plan exceeds 9.5 percent of house-
hold income. Section 5000A(e)(1)(B) pro-
vides that the term “required contribution”
means, “in the case of an individual eli-
gible to purchase minimum essential cov-
erage consisting of coverage through an
eligible employer-sponsored plan, the por-
tion of the annual premium which would
be paid by the individual (without regard
to whether paid through salary reduction
or otherwise) for self-only coverage.”
Further, the affordability rule in section
5000A(e)(1)(C) applies only to related
individuals and not to employees. Conse-
quently, the final regulations do not amend
the affordability rule for employees.
C. Multiple offers of coverage
The proposed regulations provided that
an individual who has offers of employer
coverage from multiple employers has an
offer of affordable coverage if at least one
of the offers of coverage is affordable. For
example, if X has an offer of employer
coverage from X’s employer and also
from the employer of X’s spouse, Y, for a
year for which X and Y file a joint return,
X has an offer of affordable coverage if
either X’s required contribution for self-
only coverage under X’s employer’s plan
does not exceed 9.5 percent of X’s and
Y’s household income, or if Y’s required
contribution for family coverage under
Y’s employer’s plan does not exceed 9.5
percent of X’s and Y’s household income.
One commenter suggested that the Trea-
sury Department and the IRS reconsider
this multiple coverage rule as it may be
confusing for individuals with multiple
offers of coverage; however, the com-
menter did not include a recommendation
for a specific change to the regulations.
The final regulations do not change the
rule provided in the proposed regulations
regarding affordability for individuals
with multiple offers of coverage. Although
the current section 36B regulations do not
explicitly address situations involving
multiple offers of employer coverage, as
noted in the Background section of this
preamble, a month is a coverage month
for an individual only if the individual
is not eligible for MEC, other than indi-
vidual market coverage, for the month.
Therefore, under the current regulations,
an individual with multiple employer
coverage offers for a month is eligible
for MEC for that month if at least one of
the offers of coverage is affordable and
provides minimum value. The rule in the
proposed regulations relating to multiple
offers of coverage simply states expressly
how the affordability rule in the current
regulations applies to an individual with
multiple offers of employer coverage.
Furthermore, an individual with multi-
ple offers of employer coverage seeking to
enroll in a QHP with APTC would provide
information to the applicable Exchange
concerning the required contribution for
each coverage offer. The Exchange will
determine if at least one of the offers is
affordable, in which case APTC would not
be allowed for the individual’s Exchange
coverage. This process should mini-
mize any burden or confusion relating
to whether an individual with multiple
offers of coverage has an affordable offer
that would deny the individual APTC and
PTC for his or her Exchange coverage. In
addition, for taxpayers for whom APTC
is not paid for their or their family’s QHP
coverage, the IRS will update the instruc-
tions for Form 8962, Premium Tax Credit
(PTC), and Publication 974, Premium Tax
Credit (PTC), to address multiple offers of
employer coverage.
D. Comments requiring legislative
changes
One commenter suggested that the
final regulations include a rule under
which an employee and the employee’s
family members are not considered to
have an offer of affordable coverage if
the cost of coverage for the entire fam-
ily is more than 15 percent of household
income. One commenter asked that the
rule in section 36B(c)(2)(B) be amended
and that all individuals offered coverage
under an employer plan be permitted
to choose between the employer cover-
age and Exchange coverage with a PTC.
Another commenter requested that the
Treasury Department and the IRS make
permanent the rule in section 36B(c)(1)
(E) under which taxpayers with household
income above 400 percent of the applica-
ble Federal poverty line may qualify for a
PTC for taxable years beginning in 2021
and 2022.
42
One commenter requested
that the rules of section 36B be amended
so that a PTC for a child may be claimed
by the taxpayer who pays for the health
insurance coverage of the child, not to the
taxpayer claiming the child as a depen-
dent. Finally, one commenter suggested
that the final regulations include a rule
under which excess APTC repayments
would be waived for taxable year 2023
while the Exchanges adjust and reeducate
consumers on the affordability calculation
for family members.
The Treasury Department and the IRS
appreciate these comments but note that
these changes would require legislative
action and cannot be made by regulation.
Thus, the final regulations do not include
these recommended rules.
42
Section 12001 of Public Law 117-169, 136 Stat. 1818 (August 16, 2022), commonly known as the Inflation Reduction Act of 2022 (IRA), extended through 2025 the rule in section 36B(c)
(1)(E) under which taxpayers with household income above 400 percent of the applicable Federal poverty line may qualify for a PTC.

Bulletin No. 2022–45 423 November 7, 2022
E. ICHRA and QSEHRA comments
In general, §1.36B-2(c)(3)(i)(B)
provides affordability rules related to
employees who are offered a health reim-
bursement arrangement (HRA) or other
account-based group health plan that
would be integrated with individual health
insurance coverage if the employee enrolls
in individual health insurance coverage
(an individual coverage health reimburse-
ment arrangement or ICHRA). Those rules
provide that an individual who is offered
an ICHRA because of a relationship to
the employee (a related HRA individual)
is eligible for minimum essential cover-
age under an eligible employer-sponsored
plan for any month for which the ICHRA
is offered if (1) the ICHRA is affordable,
or (2) the employee does not opt out of
and waive future reimbursements from
the ICHRA, regardless of whether the
ICHRA is affordable. Under §1.36B-2(c)
(5), an ICHRA is affordable for a month
if the employee’s required HRA contri-
bution does not exceed 9.5 percent of the
employee’s household income for the tax-
able year, divided by 12. An employee’s
required HRA contribution is the excess of
the monthly premium for the lowest cost
silver plan for self-only coverage of the
employee offered in the Exchange for the
rating area in which the employee resides,
over the monthly self-only ICHRA amount
(or the monthly maximum amount avail-
able to the employee under the ICHRA if
the ICHRA provides for reimbursements
up to a single dollar amount regardless of
whether an employee has self-only or oth-
er-than-self-only coverage).
One commenter stated it was unclear
whether the affordability rule for related
individuals in the proposed regulations
applies to ICHRAs. The commenter
also suggested that the final regulations
include a rule under which family cov-
erage amounts, not self-only coverage
amounts, are used to determine whether
an ICHRA offer to a related HRA individ-
ual is affordable.
The proposed regulations do not
address the affordability rules relating
to an ICHRA offer, and, consequently,
the final regulations also do not address
ICHRAs. Therefore, the rules for deter-
mining affordability of an ICHRA remain
unchanged. However, the Treasury
Department and the IRS, in coordina-
tion with HHS and the U.S. Department
of Labor (DOL), will consider whether
future guidance should be issued to change
the ICHRA affordability rules for related
HRA individuals in the manner suggested
by the commenter.
Other commenters suggested that a
PTC be allowed for family members in
situations in which an employee is offered
an affordable HRA, whether an ICHRA
or a QSEHRA, and does not opt-out of
the HRA. The commenters recommended
that, in these situations, the employee and
the family members would enroll in an
Exchange family plan and the employee
would not be allowed a PTC because of
the affordable HRA, but the family mem-
bers would be allowed a PTC.
The rules relating to QSEHRAs are
specifically provided by statute in section
36B(c)(4). Because the Treasury Depart-
ment and the IRS cannot amend those
rules by regulation, QSEHRAs are not
addressed in these final regulations.
Under the rules for ICHRAs, if the
terms of the ICHRA provide that reim-
bursements are allowed only for the med-
ical expenses of the employee and not for
the expenses of related individuals, a PTC
may be allowed for the Exchange coverage
of the related individuals, irrespective of
whether the ICHRA is considered afford-
able under §1.36B-2(c)(5), or whether the
employee opts out of the ICHRA. How-
ever, if the ICHRA offer includes reim-
bursements of the medical expenses of
related HRA individuals, a PTC is gener-
ally not allowed for the Exchange cover-
age of the employee or the related HRA
individuals if the ICHRA offer is afford-
able or if the employee does not opt out
of the ICHRA. This is because an ICHRA
is an eligible employer-sponsored plan
under section 5000A(f)(2) and, therefore,
under section 36B(c)(2)(C), if the cover-
age is affordable and provides minimum
value, a PTC is generally not allowed
for the Exchange coverage of an individ-
ual to whom the ICHRA offer extends
or who does not opt out of the ICHRA.
Consequently, this rule relating to offers
of employer coverage in section 36B(c)
(2)(C) cannot be amended by regulation.
However, as noted in connection with
the prior comment concerning ICHRAs,
the Treasury Department and the IRS, in
coordination with HHS and DOL, will
consider whether future guidance should
be issued to provide an ICHRA afford-
ability rule for related individuals that is
separate from the affordability rule for
employees.
F. Minimum value
1. Minimum value rule for related
individuals
The proposed regulations provided
that an employer plan meets the minimum
value requirement for related individuals
if the plan’s share of the total allowed
costs of benefits provided to related indi-
viduals is at least 60 percent, similar
to the minimum value requirement for
employees. One commenter requested
that the final regulations include a mini-
mum value safe harbor rule under which
an employer plan is considered to provide
minimum value to related individuals if
the coverage provided to employees under
the plan meets minimum value require-
ments and the same benefits are provided
to employees and family members. Other
commenters recommended that the final
regulations allow for the calculation of
minimum value using a standard popu-
lation that includes both employees and
dependents to calculate a single, compos-
ite, minimum value for an employee and
dependents, and that separate populations
not be required for coverage provided
to employees and coverage provided to
related individuals.
As in the proposed regulations, the
final regulations provide a minimum value
rule for related individuals that is separate
from the minimum value rule for employ-
ees, and that requires a plan’s share of the
total allowed costs of benefits provided to
related individuals to be at least 60 per-
cent. This minimum value rule for related
individuals is not intended to require the
use of a standard population for family
members that is separate from the stan-
dard population for employees. Rather,
the intent of the rule is to ensure that
employers continue to provide a plan that
has the same benefit design for employ-
ees and related individuals, and not to
burden employers with having to offer
different benefit packages for employees
and related individuals. Consequently, the

November 7, 2022 424 Bulletin No. 2022–45
final regulations include a rule providing
that an employer plan that provides mini-
mum value to an employee also provides
minimum value to related individuals
if the scope of benefits and cost sharing
(including deductibles, co-payments,
coinsurance, and out-of-pocket maxi-
mums) under the plan are the same for
employees and family members. If cost
sharing varies based on whether related
individuals are enrolled and/or the num-
ber of related individuals enrolled (that
is, the tier of coverage), minimum value
for related individuals is based on the tier
of coverage that would, if elected, cover
the employee and all related individuals
(disregarding any differences in deduct-
ibles or out-of-pocket maximums that are
attributable to a different tier of coverage,
such as self plus one versus family cover-
age.) In addition, the final regulations do
not require a departure from the practice
of computing minimum value for employ-
ees and related individuals based on the
provision of benefits to a standard popu-
lation that includes both employees and
related individuals.
2. Require coverage of all essential health
benefits
The proposed regulations provided
that, to be considered to provide minimum
value, an eligible employer-sponsored
plan must include substantial coverage of
inpatient hospital services and physician
services. One commenter asked that final
regulations provide that an employer plan
does not meet the minimum value require-
ments unless it provides coverage of all
10 essential health benefits that, under
the ACA, certain plans must cover, not
just inpatient hospital services and phy-
sician services. This comment requesting
an expansion of the minimum value rule
is outside the scope of these final regu-
lations. Thus, as in the proposed regula-
tions, the final regulations provide that an
eligible employer-sponsored plan does
not meet minimum value requirements
unless it includes substantial coverage of
inpatient hospital services and physician
services.
3. Minimum value calculator
Under 45 CFR 156.145(a)(1), a mini-
mum value calculator is to be made avail-
able by HHS and the IRS that an employer
plan may use to determine whether the
percentage of total allowed costs under
the plan is at least 60 percent. Several
commenters requested that the minimum
value calculator be updated to reflect more
current large group data and to incorporate
appropriate model changes that have been
made to the actuarial value calculator.
43

Although the commenters’ request con-
cerning the minimum value calculator is
outside the scope of the final regulations,
the Treasury Department and the IRS
have shared these comments with HHS to
determine the best way to address these
comments relating to the calculator.
G. Applicability date of final regulations
The proposed regulations provided that
the changes to §§1.36B-2, 1.36B-3, and
1.36B-6(a)(2) in the proposed regulations,
if finalized, were expected to apply for
taxable years beginning after December
31, 2022. Several commenters requested
instead that the final regulations apply for
taxable years beginning after December
31, 2023. These commenters expressed
concern that taxpayers will be faced with
a number of health care-related changes in
2022, including the end of the temporary
applicable percentages for 2021 and 2022
in section 36B(b)(3)(A)(iii) that increased
PTC amounts.
44
Commenters also noted
that at the end of the COVID-19 public
health emergency, states will no longer
be required to comply with a Medicaid
continuous enrollment requirement in
order to receive a temporary increase in
Federal Medicaid matching funds under
the Families First Coronavirus Response
Act. The commenters stated that these
changes, along with the changes in the
proposed regulations, will result in much
uncertainty for QHP enrollees for the
open enrollment period that begins on
November 1, 2022, and will lead to sub-
stantial confusion for QHP enrollees and
likely inaccurate APTC determinations by
Exchanges.
Although the commenters’ concerns
are appreciated, the Treasury Department
and the IRS are of the view that those
concerns are outweighed by the goal of
allowing spouses and dependents, some
of whom have been negatively affected
by the 2013 affordability rule, to be able
to access affordable Exchange cover-
age beginning in the 2023 plan year. For
this reason, many commenters urged
the Treasury Department and the IRS to
implement the changes to the affordabil-
ity rule for related individuals in time for
QHP open enrollment for the 2023 plan
year. Although 2023 QHP enrollment
may present some new challenges, as
discussed more fully in section IV of this
Summary of Comments and Explanation
of Revisions, HHS has informed the Trea-
sury Department and the IRS that HHS
will engage in thorough implementation
efforts, including revising the Exchange
application and providing resources and
technical assistance education for State
Exchanges, Navigators, agents, bro-
kers, and other assisters to help enrollees
understand their options for 2023. In addi-
tion, the IRS will be making changes to
its forms, instructions, publications, and
website, in an effort to educate taxpay-
ers about any changes for the 2023 plan
year. Therefore, the Treasury Department
and the IRS do not adopt the commenters’
request that the applicability date of the
final regulations be delayed until taxable
years beginning after December 31, 2023.
Instead, the final regulations apply for tax-
able years beginning after December 31,
2022.
Another commenter urged that the
Treasury Department and the IRS con-
sider the effective date implications of
this rule for the State Innovation Waiver
program under section 1332 of the ACA
(section 1332 waivers). The commenter
requested that the Administration con-
sider the implications of the final regula-
tions on states with approved section 1332
waivers and, if necessary, identify a plan
to mitigate potential harm to accessing
affordable coverage for individuals. For
43
Under 45 CFR 156.135, HHS is responsible for developing and updating an actuarial value calculator that issuers may use to determine the actuarial value of a health plan.
44
Under section 12001 of the IRA, the temporary applicable percentages for 2021 and 2022 in section 36B(b)(3)(A)(iii) were extended through 2025 so taxpayers will not see a change in
their PTC amount due to the potential policy change described by commenters.

Bulletin No. 2022–45 425 November 7, 2022
example, the commenter expressed con-
cern that states would need to develop
and update actuarial analyses for section
1332 waivers and that there would be
an impact on states leveraging Federal
pass-through funding under section 1332
waivers, mostly through reinsurance pro-
grams, given that the proposed regulations
would modify who is eligible for the PTC
and APTC. The commenter also was con-
cerned that there may be implications for
states exploring other innovative oppor-
tunities, such as public health insurance
options that enhance affordable options
by leveraging section 1332 Federal pass-
through funding.
The section 1332 waiver program
permits states to apply to waive certain
provisions of the ACA, including section
36B of the Code, to undertake their own
state-specific reforms to provide residents
with access to high quality, affordable
health insurance while retaining the basic
protections of the ACA. A state applying
for a section 1332 waiver must include
in its application actuarial and economic
analyses that demonstrate that the waiver
proposal meets the statutory requirements
for section 1332 waivers.
45,46
If a waiver
yields Federal savings on certain forms
of Federal financial assistance under the
ACA (such as the PTC), those savings are
passed through to the state to help imple-
ment the state’s approved waiver plan.
Federal pass-through funding amounts
are calculated annually by the Treasury
Department and HHS. Pass-through
amounts reflect current law and policy
at the time of the calculation but can be
updated, as necessary, to reflect appli-
cable changes in Federal or state law.
47

The Treasury Department plans to work
with HHS to communicate any implica-
tions of these final regulations, including
any associated requirements for states,
to affected stakeholders and to states that
have approved section 1332 waivers or
that are considering section 1332 waiv-
ers. The Treasury Department and the IRS
recognize that the final regulations may
affect states in different ways but believe
that any negative effects related to the
effective date are outweighed by the goal,
supported by numerous commenters, of
allowing more spouses and dependents
to be able to access affordable Exchange
coverage beginning in 2023. The Treasury
Department and the IRS also note that fur-
ther innovation under section 1332 of the
ACA is speculative, and that, in any event,
section 1332 waiver policies are outside
the scope of these regulations.
V. Comments regarding outreach
Several commenters requested that
HHS, the Treasury Department, and the
IRS provide clear resources aimed at help-
ing various individuals and employers.
Many of the commenters who requested
that HHS, the Treasury Department, and
the IRS provide outreach about the new
rules were concerned about families
understanding the trade-offs if they are
considering “split coverage,” meaning that
the employee would enroll in employer
coverage and the family members would
enroll in Exchange coverage. Some com-
menters noted that split coverage could
lead to lower premiums for the family or
could lead to uninsured individuals gain-
ing coverage. Those commenters also
noted, however, that some families with
split coverage will need to contend with
different provider networks, deductibles,
out-of-pocket limits, open enrollment
periods, appeals and grievance proce-
dures, and other parameters unique to their
different health plans. Another commenter
added that for some families, moving fam-
ily members from employer coverage to
Exchange coverage could mean lower
HRA or health savings account contribu-
tions from employers. One commenter
stated that confusion about split coverage
could present particular difficulties for
those with limited English proficiency or
lower rates of health literacy.
The commenters who raised these con-
cerns all supported the affordability rule
for related individuals provided in the pro-
posed regulations, but requested that the
Treasury Department and the IRS work
with HHS to help ensure that families
who choose to enroll in split coverage will
benefit from doing so. One commenter
stated that families considering whether to
enroll in Exchange coverage with a PTC
in lieu of enrolling in employer cover-
age would greatly benefit from resources
and guidance that help them make an
informed purchasing decision. That com-
menter urged the Treasury Department
and the IRS to work with HHS on how to
best communicate that information in an
accessible fashion to consumers both gen-
erally and as part of the Exchange appli-
cation. Finally, one commenter noted that
numerous studies show there is a correla-
tion between advertising about the ACA
and an increase in individuals shopping
for, and enrolling in, Exchange cover-
age. Thus, that commenter suggested that
the IRS and HHS should reinvigorate
efforts to educate the American public
about Exchange open enrollment (Open
Enrollment), specifically focusing on this
change to the affordability rule for related
individuals.
The Treasury Department and the IRS
understand that the new affordability rule
in these final regulations will present fam-
ilies with additional coverage options
they will need to understand, evaluate,
and compare to determine the type of
coverage that is best for them. The Trea-
sury Department and the IRS have been
working with HHS, and will continue to
work with HHS, to ensure that the agen-
cies communicate information about the
new rules in an accessible fashion to indi-
viduals both generally and as part of the
Exchange application. Specifically, HHS
has informed the Treasury Department
and the IRS that HHS will work to revise
the Exchange application on HealthCare.
gov in advance of Open Enrollment for
the 2023 plan year to include new infor-
mation that will assist consumers in filling
out their applications. Those revisions will
include (1) new questions on the applica-
tion about employer coverage offers for
family members, and (2) revised materi-
als for consumers to gather information
from their employer about the coverage
being offered. To assist those with lim-
ited English proficiency, HealthCare.gov
offers language services upon request
through the Marketplace Call Center, and
45
See 31 CFR 33.108(f)(4)(i) and (ii); 45 CFR 155.1308(f)(4)(i) and (ii).
46
Section 1332(b)(1)(A)-(D) of the ACA.
47
31 CFR 33.122 and 45 CFR 155.1322.

November 7, 2022 426 Bulletin No. 2022–45
the HealthCare.gov application is avail-
able in both English and Spanish.
The Treasury Department and the IRS
also understand that HHS will provide
resources and technical assistance to State
Exchanges that will need to make similar
changes on their websites and Exchange
application experiences. More generally,
HHS is working regularly with State
Exchanges to provide technical assis-
tance on implementation of the new rules.
HHS continues to track State Exchange
planning and take all necessary steps to
support efforts by State Exchanges to
implement the new rules, with necessary
outreach and education efforts, for Open
Enrollment for the 2023 plan year.
In addition, the Treasury Department
and the IRS understand that HHS will pro-
vide training on the new rules to agents,
brokers, and other assisters (for exam-
ple, Navigators) so applicants will better
understand their options before enrolling,
including the trade-offs if applicants are
considering split coverage. This training
is particularly important because over half
of the applicants who apply for Exchange
coverage through HealthCare.gov are
assisted by an agent, broker, or other
assister. HHS also will share available
resources with State Exchanges to lever-
age for use in training customer support
personnel in their states.
Finally, HHS has informed the Trea-
sury Department and the IRS that HHS
is considering outreach to specific con-
sumers. HHS has data from prior years
on applicants who applied through a Fed-
erally-facilitated Exchange, were denied
APTC at enrollment, and might benefit
from the new rules. HHS is evaluating
opportunities for direct outreach to these
individuals.
The IRS also will need to implement
the new rules for the 2023 taxable year.
In particular, the IRS will update rele-
vant forms, instructions, and publications
prior to the tax filing season for 2023, to
include the instructions for Form 8962
and Publication 974. In addition, the IRS
will update relevant materials on IRS.gov
to provide taxpayers with additional infor-
mation about the new rules.
In addition to the commenters request-
ing that HHS, the Treasury Department,
and the IRS provide outreach to individ-
uals, a few commenters provided specific
recommendations related to employers.
One commenter stated that employers are
thinking about ways to educate employees
affected by this new change but suggested
that resources be made available from
HHS, the Treasury Department, and the
IRS that could be shared with employees.
One commenter suggested that the Trea-
sury Department, in coordination with
HHS and the U.S. Department of Labor,
issue tri-agency guidance and consum-
er-friendly resources to help employees
navigate challenges that arise from split
coverage. One commenter stated that the
Treasury Department and the IRS should
require employers to provide notifica-
tion to their employees about the new
affordability test, including information
about Exchange coverage, the availabil-
ity of financial assistance, and how an
individual may enroll in coverage. The
commenter also recommended that the
Treasury Department and the IRS invite
stakeholder feedback on a draft of a model
notice that employers could share with
employees. Finally, one commenter stated
that the new rules will create new require-
ments for plan sponsors and administra-
tors to ensure compliance with the rules
and recommended that the Treasury
Department and the IRS issue a Request
for Information to better understand the
recordkeeping and compliance needs of
stakeholders who will be affected by the
final rule.
The Treasury Department and the IRS
appreciate that employers are interested
in providing information to their employ-
ees about the new rules and encourage
employers to provide employees with
resources published by DOL, HHS, the
Treasury Department, and the IRS relat-
ing to the new rules. Regarding the sug-
gestion to impose a notification require-
ment on employers, such a requirement
is outside the scope of section 36B and
these final regulations. Thus, the Treasury
Department and the IRS cannot impose
a notification requirement on employers
through these final regulations. In addi-
tion, the Treasury Department does not
intend to issue formal tri-agency guidance
with HHS and DOL or publish a model
notice. However, the agencies under-
stand the need to provide clear, consum-
er-friendly resources that can be accessed
by individuals in various ways, including
through employers who want to provide
those resources directly to employees.
Therefore, the Treasury Department and
the IRS, in coordination with HHS and
DOL, will work to ensure that outreach
materials about these final regulations can
be accessed by individuals or by employ-
ers who choose to share the materials with
their employees. In addition, the agencies
plan to coordinate in conducting open
door forums with employers, employer
associations, and employee benefits man-
agers to educate them about the new rules.
As noted earlier, one commenter stated
that the new rules will create new record-
keeping and compliance requirements for
plan sponsors and administrators. How-
ever, nothing in the proposed rules spe-
cifically imposed any new requirements
on plan sponsors or administrators and
any such requirements would be outside
the scope of section 36B. In addition, as
discussed later, the new rules in these
final regulations do not create, even indi-
rectly, any new recordkeeping or compli-
ance requirements for plan sponsors or
administrators.
VI. Issues for employers
A. Information reporting
Multiple commenters pointed out that
the proposed regulations did not address
whether the regulations would impose
new information reporting obligations on
employers and other providers of mini-
mum essential coverage under sections
6055 and 6056. Section 6055 requires
providers of minimum essential coverage
to report coverage information by filing
information returns with the IRS and fur-
nishing statements to individuals. Section
6056 requires ALEs to file information
returns with the IRS and furnish state-
ments to full-time employees relating to
health coverage offered by an ALE to its
full-time employees and their dependents.
Some commenters noted that the compo-
sition of an employee’s tax family is not
readily ascertainable by an employer, no
employer collects the type of information
that would allow them to make determi-
nations about the employment status and
health coverage of family members, and
this data would be costly and burdensome
to collect and report.

Bulletin No. 2022–45 427 November 7, 2022
The Treasury Department and the IRS
clarify that nothing in these final regula-
tions affects any information reporting
requirements for employers, including the
reporting required under sections 6055
and 6056, which is done on Form 1095-
B, Health Coverage, and Form 1095-C,
Employer-Provided Health Insurance
Offer and Coverage, respectively. Further,
these final regulations do not amend the
regulations under section 6055 or 6056,
and the IRS does not intend to revise
Form 1095-B or Form 1095-C to require
any additional data elements related to the
new rules. Additionally, the safe harbors
that an employer may use to determine
affordability for purposes of the employer
shared responsibility provisions under
section 4980H continue to be available for
employers.
B. Non-calendar year plans
One commenter expressed concern
about how the affordability rule for
related individuals would affect family
members enrolled in non-calendar year
employer plans, especially individuals
enrolled in employer coverage through
section 125 cafeteria plans (cafeteria
plans). The commenter noted that under
current rules, spouses and dependents of
employees cannot, without a qualifying
event, discontinue their employer cov-
erage during a plan year if the employee
has elected under the cafeteria plan to
cover the spouse or dependent under the
employer plan
48
. Thus, under current
rules, if as of January 1, 2023, a spouse or
dependent enrolled in a non-calendar year
employer plan through a cafeteria plan
wants to enroll in a QHP as of that date,
no PTC would be allowed for the period
from January 1, 2023, until the close of
the employer plan year in 2023 because
the spouse and dependents would have to
continue their enrollment in the employer
plan. The commenter opined that, because
of this issue, the Treasury Department and
the IRS should consider making the final
regulations effective beginning in 2024
rather than 2023.
Spouses and dependents enrolled in
non-calendar year employer plans not
associated with cafeteria plans may, sub-
ject to the plan rules, disenroll from the
employer plan effective on January 1,
2023, and enroll in a QHP with cover-
age beginning on January 1, 2023. In
that situation, a PTC would be allowed
for the Exchange coverage of the spouse
and dependents if the requirements for a
PTC are met, including that the employer
plan is not affordable for the spouse and
dependents under the rules in §1.36B-2(c)
(3)(v)(A). The rules in §1.36B-2(c)(3)
(v)(B) apply in determining whether the
employer plan is affordable for the spouse
and dependents for the period from Janu-
ary 1, 2023, until the end of the plan year.
For employer plans associated with caf-
eteria plans, the Treasury Department and
the IRS agree with the commenter that,
as with employees, spouses and depen-
dents should be able to discontinue their
employer coverage during a plan year and
enroll in a QHP, and that a PTC should be
allowed for their Exchange coverage if
the other requirements of section 36B are
met. Consequently, simultaneous with the
issuance of these final regulations, Notice
2022-41 is being issued to allow employ-
ees to revoke coverage in an employer
plan associated with a cafeteria plan for
family members to allow them to enroll in
a QHP.
49
The notice is effective for elec-
tions that are effective on or after January
1, 2023. Thus, because employees will be
permitted under the notice to revoke cov-
erage in an employer plan associated with
a cafeteria plan beginning in 2023, the
issuance of the notice addresses the com-
menter’s concern about the effective date
of the final regulations.
C. Section 4980H liability
One commenter that supported the pro-
posed regulations noted in a footnote that
the proposed regulations would not have
a direct effect on an ALE’s liability for an
employer shared responsibility payment
with respect to the employees of that ALE.
The Treasury Department and the IRS
agree with that comment; the employer
shared responsibility payment is triggered
by the allowance of a PTC with respect to
a full-time employee of the ALE. These
final regulations may affect a related indi-
vidual’s eligibility for a PTC, but they do
not affect an employee’s eligibility for a
PTC, and thus these final regulations do
not affect the liability of the ALE of the
employee.
The commenter also noted that the
proposed regulations could have an indi-
rect impact on an ALE’s liability for an
employer shared responsibility payment.
That is, an ALE that does not offer afford-
able, minimum value coverage to some
of its full-time employees could have
an increase in its payment under section
4980H for full-time employees who were
previously ineligible for a PTC based on
an offer of coverage from their spouse’s
employer. The commenter did not request
any change in the proposed regulations,
but merely noted this scenario. Certainly,
an ALE that has chosen not to offer afford-
able, minimum value coverage to the req-
uisite number of its full-time employees
may have a potential liability for a pay-
ment under section 4980H – a risk that the
ALE knowingly accepts. Whenever more
employees of such an ALE are allowed a
PTC, for any reason, the ALE’s liability
may grow. The Treasury Department and
the IRS have considered the interests such
an employer might have in retaining the
affordability rule in the 2013 regulations,
but do not believe that any such ALE
would have a meaningful reliance interest
in the 2013 affordability rule. Such an ALE
is already risking liability under section
4980H due to its failure to offer affordable
self-only coverage to its employees, and
has avoided or limited that liability solely
through the happenstance that one or more
of its employees has received an offer of
coverage through a family member that
the 2013 affordability rule deemed to be
affordable. After careful consideration of
this potential interest and broader policy
considerations, the Treasury Department
and the IRS are adopting these final rules
to give full effect to the statutory language
48
Although current cafeteria plan rules generally prohibit employees, spouses, and dependents from discontinuing their employer coverage during a plan year, Notice 2014-55, 2014-41 I.R.B.
672, permits a cafeteria plan to allow an employee to revoke his or her election under the cafeteria plan for coverage under the employer plan if certain conditions are met. The notice does
not allow an employee to revoke an election solely for coverage of the employee’s spouse or dependents under the employer plan.
49
Employees who revoke coverage in an employer plan associated with a cafeteria plan for themselves or for family members will be eligible for a Special Enrollment Period to enroll in a
QHP if a family member becomes newly eligible for APTC. See 45 CFR 155.420(d)(6)(iii).

November 7, 2022 428 Bulletin No. 2022–45
and to promote the ACA’s goal of provid-
ing affordable, quality health care for all
Americans.
VII. Procedural Requirements for
Regulations and Cost of New Rules
A few commenters argued that the pro-
posed affordability rule for related indi-
viduals would be too costly, producing an
inefficient use of Federal resources. These
commenters all cited a report from the
CBO estimating the costs of H.R. 1425,
introduced during the 116
th
Congress,
which included provisions that would
have amended section 36B to provide an
affordability rule for related individuals
similar to the one in the proposed reg-
ulations. See section 103 of H.R. 1425.
According to the CBO analysis, that pro-
vision would have increased Federal defi-
cits by $45 billion over ten years.
50
The Treasury Department and the IRS
acknowledge that multiple analyses have
been undertaken since 2013 that analyze
the impact of the 2013 interpretation and
estimate any impact of changing the pol-
icy of the affordability rule. These analy-
ses consider several aspects of the policy
change, including the estimated impact
on the Federal deficit, the change in indi-
viduals’ health coverage status, and the
estimated increase in PTC. The Treasury
Department and the IRS reviewed the
CBO analysis of H.R. 1425, more recent
CBO analyses, and other studies that were
cited by commenters. In addition to the
CBO analysis referred to by commenters,
CBO has released an updated analysis esti-
mating that the proposed affordability rule
for related individuals, if finalized, would
increase the deficit by approximately $3.4
billion annually on average.
51
Further, the
Treasury Department analysis indicates a
potential increase in the Federal deficit by
an average of $3.8 billion per year over
the next 10 years. These analyses are dis-
cussed in section III of this Summary of
Comments and Explanation of Revisions.
However, the Treasury Department and
the IRS disagree that the benefits of the
policy change are insufficient to justify
the impact on the Federal deficit. As dis-
cussed in section III, these studies con-
sistently project an increase in coverage
and affordability for a substantial number
of individuals. The Treasury Department
and the IRS have determined that adding
to the Federal deficit to this extent is a
worthwhile tradeoff to achieve these pol-
icy goals.
Some of those commenters also crit-
icized the Treasury Department and the
IRS for not including specific cost esti-
mates in the preamble to the proposed reg-
ulations. One commenter argued that the
failure to include a cost-benefit analysis in
the proposed affordability rule for related
individuals violates the Administrative
Procedure Act
52
because it deprives the
public of an opportunity for meaningful
notice and comment and demonstrates the
lack of a reasoned explanation for the rule
change.
The Treasury Department and the IRS
have provided analysis in accord with
the 2018 Memorandum of Agreement
between the Treasury Department and the
Office of Management and Budget (OMB)
(2018 MOA),
53
which specifies that the
Treasury Department and the IRS will
provide qualitative analysis of the poten-
tial costs and benefits of tax regulatory
actions determined to raise novel legal or
policy issues, as described in section 6(a)
(3)(B) of EO 12866.
Another commenter asserted that the
Treasury Department and the IRS did
not provide the analyses required by EO
12866, EO 13563, and the Regulatory
Flexibility Act when it issued the pro-
posed regulations. EOs 12866 and 13563
direct agencies to assess costs and bene-
fits of available regulatory alternatives
and, if regulation is necessary, to select
regulatory approaches that maximize net
benefits to the American public. The Reg-
ulatory Flexibility Act requires the assess-
ment of the numbers of small businesses
potentially impacted by the proposed rule.
The commenter argued that the analy-
sis contained in the proposed rule lacks
quantifiable data and thus is inadequate
to satisfy the procedural requirements in
EO 12866, EO 13563, and the Regulatory
Flexibility Act.
The commenter first argued that the
Treasury Department and the IRS failed
to satisfy the requirements of EOs 12866
and 13563 because they did not provide
a reasoned explanation of the need for
regulatory action or an assessment of the
costs and benefits of all alternatives. The
commenter stated that studies or surveys
should have been conducted to assess a
more precise number of persons impacted
and that the Treasury Department and the
IRS failed to quantify the costs of the pro-
posed rule. The commenter asserted that
the Treasury Department and the IRS are
required to conduct research and assess
the costs of all the regulatory alternatives,
including the alternative of no action.
The Treasury Department and the IRS
disagree. The preamble to the proposed
regulations provided a detailed qualitative
analysis of the proposed rule’s benefits,
costs, and transfers. In addition, the Trea-
sury Department and the IRS requested
comments regarding data, other evidence,
or models. In response to comments, the
Special Analyses section of this pream-
ble includes further explanation of the
qualitative analysis used by the Treasury
Department and the IRS. This analysis
meets the requirements of EOs 12866 and
13563 applicable to tax regulatory actions
and was issued after coordination with and
review by OMB under the 2018 MOA.
As noted by the commenter, the Regula-
tory Flexibility Act generally requires the
assessment of the numbers of small busi-
nesses potentially impacted by a proposed
rule. However, section 605 of the Regula-
tory Flexibility Act provides an exception
under which an assessment is not required
if the agency certifies that the rule will
not, if promulgated, have a significant
economic impact on a substantial number
of small entities. If the exception applies,
the agency must publish the certification
in the Federal Register at the time of pub-
lication of the proposed rule, along with a
statement providing the factual basis for
such certification. The agency also must
provide the certification and statement
50
https://www.cbo.gov/system/files/2020-06/Combined%20Tables.pdf.
51
https://www.cbo.gov/system/files?file=2022-07/58313-Crapo_letter.pdf.
52
5 U.S.C. 551-559.
53
The Department of the Treasury and the Office of Management and Budget, Memorandum of Agreement, Review of Tax Regulations under Executive Order 12866, April 11, 2018, https://
home.treasury.gov/sites/default/files/2018-04/04-11%20Signed%20Treasury%20OIRA%20MOA.pdf.

Bulletin No. 2022–45 429 November 7, 2022
to the Chief Counsel for Advocacy of
the Small Business Administration.
In the preamble to the proposed reg-
ulations, the Treasury Department and
the IRS certified that the proposed reg-
ulations would not have a significant
economic effect on a substantial number
of small entities. The preamble stated
that the certification is based on the fact
that the majority of the effect of the pro-
posed regulations falls on individual tax-
payers, and that entities will experience
only small changes. The preamble fur-
ther noted that the proposed regulations
have been submitted to the Chief Counsel
for the Office of Advocacy of the Small
Business Administration for comment on
their impact on small business. Thus, the
Treasury Department and the IRS fully
complied with the Regulatory Flexibility
Act in promulgating the proposed regu-
lations. Further, the Treasury Department
and the IRS did not receive any comments
from the Small Business Administration
regarding the proposed rule’s impact on
small business. Accordingly, as stated in
the Special Analyses section of this pre-
amble, the Treasury Department and the
IRS certify that, as with the proposed reg-
ulations, these final regulations will not
have a significant economic impact on a
substantial number of small entities.
VIII. Effect of New Rules on Other
Stakeholders
A. Effect of new rules on insurance
markets
Several commenters opined that the
affordability rule for related individuals
provided in the proposed regulations will
have an adverse effect on the employer
insurance market. In the view of the com-
menters, one result of changing the afford-
ability rule for related individuals will be
that a substantial number of dependents
of employees, who are generally younger
and healthier than the employees, will shift
from employer plans to Exchange cover-
age. The commenters stated that this shift-
ing of younger, healthier individuals from
employer plans to Exchange coverage will
result in increased premiums for employer
plans. One commenter, however, opined
that it is unlikely that the magnitude of
the impact on premiums for employer
plans would be large. Some commenters
pointed out that the shift also will result in
decreased premiums for Exchange cover-
age, but one commenter asserted that the
potential impact on the individual market
is likely to be minor. Finally, a few com-
menters expressed concern that the afford-
ability rule for related individuals will
cause employers to discontinue or reduce
insurance contributions for the coverage
of related individuals. One commenter
also mentioned this concern but opined
that relatively few employers would take
this approach.
The Treasury Department and the
IRS do not expect the affordability rule
will have a meaningful effect on aver-
age premiums for employer plans. Over-
all, the aggregate amount that employers
spend on family coverage is expected
to decrease by a small amount because
some individuals who would otherwise
enroll in employer coverage will prefer to
enroll in Exchange coverage with a PTC.
Commenters are correct that individuals
enrolled in Exchange coverage and indi-
viduals enrolled in employer coverage
have, on average, different levels of mor-
bidity. However, the Treasury Department
and the IRS do not expect that the mor-
bidity of the marginal individual – rather
than average individual – is significantly
different such that there would be large
effects on premiums. In some cases,
individuals who would have otherwise
enrolled in employer plans may have
higher than average costs while in other
cases those individuals will have lower
than average costs. Furthermore, the num-
ber of individuals who are expected to
switch plans based on this affordability
rule will be modest relative to the over 170
million individuals enrolled in employer
health plans. As a result, the net effect on
employer premiums – if any – is likely to
be negligible.
Because the rule is not expected to have
a meaningful impact on premiums for
employer coverage, the Treasury Depart-
ment and the IRS disagree that changes
in morbidity would result in employers
discontinuing coverage or reducing their
contributions to that coverage. Addition-
ally, there are several reasons the Trea-
sury Department and the IRS expect that
employers will continue to have strong
incentives to offer family coverage. The
exclusion of employer coverage from
taxable income encourages employ-
ers to compensate employees with (and
increases employees’ demand for) gen-
erous health coverage in lieu of taxable
wages. In addition, employers face com-
petitive pressure to offer generous family
coverage to their employees at a relatively
low cost. Employers who reduce their
contributions for family coverage may
find it difficult to recruit or retain employ-
ees. Thus, competitive forces in the labor
market will discourage employers from
reducing contributions.
B. Effect of new rules on individuals
Some commenters asserted that the pro-
posed affordability rule for related individ-
uals would harm individuals and families
in various ways. In particular, comment-
ers argued that individuals and families
would face increased complexity as they
navigate multiple plan choices, including
the choice to enroll in “split coverage” in
which the employee with an affordable
offer enrolls in self-only employer cover-
age and the employee’s family members
separately enroll in Exchange coverage.
Some commenters asserted that the shift
to Exchange coverage caused by the pro-
posed rule would be a poor trade-off for
individuals and would harm individuals
because Exchange coverage in general
provides coverage that is inferior to and
less generous than employer plans. These
commenters asserted, for example, that
Exchange coverage may be less expensive
than an available employer plan but pro-
vide significantly higher deductibles, nar-
rower networks, or lower actuarial value
than the available employer plan.
The Treasury Department and the IRS
are of the view that providing individuals
and families with more choices for health
coverage is a positive aspect of the new
affordability rule, especially if those addi-
tional choices include options for more
affordable coverage. The new affordabil-
ity rule for related individuals does not
change the availability of any current
coverage options for individuals, nor does
it change any aspect of those coverage
options. Specifically, family members of
employees for whom a PTC may now
be allowed as a result of the new afford-
ability rule are free to retain their current

November 7, 2022 430 Bulletin No. 2022–45
coverage, or continue to go without cov-
erage, based on their particular circum-
stances. Because the coverage decision
is voluntary, families who would have
enrolled in employer coverage will likely
enroll in the Exchange if they expect the
benefit of split coverage exceeds the mon-
etary or other cost. As detailed in the Spe-
cial Analyses section of this preamble, the
Treasury Department and the IRS expect
that only a limited number of families
– relative to the population enrolled in
employer coverage and relative to those
newly eligible for the PTC – will choose
to shift their coverage. Only family mem-
bers for whom it is advantageous, based on
their personal and family circumstances,
will choose to shift their coverage.
Further, the Treasury Department and
the IRS disagree with commenters who
suggest that Exchange coverage is nec-
essarily inferior to employer plans. The
cost and quality of employer coverage
compared to Exchange coverage will
depend on what plans are available to the
family and the family’s particular circum-
stances. The Treasury Department and the
IRS agree, however, that individuals and
families could face new, more complex
choices under the new rules as they nav-
igate multiple plan choices, including the
choice to enroll in split coverage. Individ-
uals and families will need to assess their
current situation and determine whether
they want to enroll family members in
Exchange coverage with a PTC or in an
available employer plan. In comparing
their options, these families will need to
consider the factors noted by the com-
menters, including the cost of premiums,
the amount of deductibles, the available
networks, and the actuarial value of the
plans, as well as the various trade-offs if
the family is considering split coverage.
The Treasury Department and the IRS
understand these concerns and are work-
ing closely with HHS to ensure that indi-
viduals and families have clear and accu-
rate information about the new rules so
they can make informed decisions about
their health coverage and choose their
optimal health coverage. Accordingly,
as further explained in section V of this
Summary of Comments and Explanation
of Revisions, the Treasury Department
and the IRS have been working with HHS,
and will continue to work with HHS, to
ensure that information about the new
rules is provided in an accessible fashion
to individuals both generally and as part
of the Exchange application. In addition,
HHS, the Treasury Department, and the
IRS encourage individuals to work with
agents, brokers, and other assisters when
applying for Exchange coverage, whether
applying through an Exchange using the
Federal eligibility and enrollment plat-
form or a State Exchange using its own
platform. Those agents, brokers, and other
assisters can help families understand
their health coverage options and help
them determine which option will best
meet their particular needs. The Treasury
Department and the IRS also encourage
employers to provide employees with
resources published by HHS, the Treasury
Department, and the IRS relating to the
new rules.
C. Effect of new rules on states
A few commenters asserted that states
will face adverse consequences because
family members who seek Exchange cov-
erage under the new affordability rule for
related individuals may find instead that
they qualify for Medicaid or the Chil-
dren’s Health Insurance Program (CHIP).
The commenters asserted that people may
switch from employer coverage, where
states bear no cost, to public programs, the
most significant items on state budgets,
which will impose new burdens on states.
Some of these commenters stated that the
new affordability rule will increase costs
on state Medicaid programs by increas-
ing the number of people who apply for
coverage through the Exchange and then
enroll in Medicaid. These commenters
cited an analysis by the Urban Institute
estimating that 90,000 family members—
mainly children—would newly enroll
in Medicaid or CHIP owing to their par-
ents seeking Exchange coverage.
54
The
Treasury Department and the IRS did
not receive comments from any states
expressing concern about potential
adverse consequences.
As an initial matter, the Treasury
Department and the IRS note that Con-
gressional legislation established the
Medicaid and CHIP programs prior to,
and independent of, the ACA and these
final regulations. States have knowingly
and consistently elected to participate in
the Medicaid and CHIP programs since
these programs were adopted. These final
regulations have no effect on the Federal
standards for those programs, nor do they
affect how states determine eligibility for
enrollment in their Medicaid or CHIP
programs.
55
The Federal government pro-
vides the majority of the funding for State
Medicaid and CHIP programs. (The exact
share varies based on factors such as the
state’s economic characteristics and the
types of beneficiaries who enroll.) In gen-
eral, states pay no more than half of the
costs of additional children who enroll in
these programs. Additionally, per capita
costs to insure children in these programs
are substantially lower than costs for
adults.
In addition, despite the commenters’
assertions that the final regulations will
increase costs to states by increasing
enrollment in state programs, the Trea-
sury Department and the IRS view these
effects as highly uncertain. Any changes
in Medicaid or CHIP enrollment would be
second-order effects that would not stem
from changes in Medicaid or CHIP eligi-
bility. Although it is possible the rule may
indirectly lead to higher state Medicaid
or CHIP spending, there are other factors
that will reduce costs for state and local
governments. In particular, the analysis
cited by the commenters finds that over
75 percent of states’ higher Medicaid and
CHIP costs will be offset by less spending
on uncompensated care for the uninsured.
The study projects the potential “tiny”
increase in state spending would also be at
least partially offset by additional tax rev-
enue.
56
Because employers are assumed
to hold total compensation constant,
54
See Changing the “Family Glitch” Would Make Health Coverage More Affordable for Many Families | Urban Institute.
55
Although the Federal government imposes certain mandatory coverage requirements, states primarily determine eligibility standards for these programs. See https://crsreports.congress.gov/
product/pdf/R/R43357/16 and https://crsreports.congress.gov/product/pdf/R/R43949/19.
56
See https://www.urban.org/sites/default/files/publication/104223/changing-the-family-glitch-would-make-health-coverage-more-affordable-for-many-families_1.pdf at pg. 12

Bulletin No. 2022–45 431 November 7, 2022
the Federal government is projected to
receive more tax revenue as employers
shift compensation from health coverage
towards taxable wages; states may receive
more tax revenue for the same reason. The
combined effect of increased state tax rev-
enue and decreased spending on uncom-
pensated care may completely offset any
increase in Medicaid spending. Research
has shown that Medicaid expansions
under the ACA increased hospital revenue
and reduced spending on locally-funded
safety net programs, and it is likely that
any increase in enrollment in Medicaid
and CHIP enrollment that indirectly arises
from the rule would have similar effects.
57

Over the long-term, Medicaid and CHIP
beneficiaries may also have higher earn-
ings and pay more in taxes.
58
Although it
is difficult to quantify the combined effect
of these factors on state and local budgets,
the Treasury Department and the IRS
expect any net impact (whether positive
or negative) to be small relative to states’
total Medicaid spending.
59

One commenter asserted that Medic-
aid and CHIP are associated with narrow
networks of medical providers, making it
harder for families to find pediatricians
and other primary care physicians, den-
tists, and medical specialists. The Trea-
sury Department and the IRS again note
that the final regulations do not require
individuals to enroll in any particular type
of coverage. Family members who cur-
rently are enrolled in an employer plan
and are determined eligible for Medicaid
or CHIP when they apply for Exchange
coverage are not required to leave the
employer plan and enroll in Medicaid or
CHIP. These family members always have
a choice to stay in the employer plan if
they prefer the network of medical pro-
viders or other aspects of the employer
plan to what is provided under Medicaid
or CHIP.
IX. Comments Exceeding Scope of Final
Regulations
A number of commenters submit-
ted comments on matters not within the
purview of the Treasury Department and
the IRS. For example, several commenters
suggested that the U.S. adopt a Medicare-
for-all style of health coverage or offer
universal health coverage in a manner
similar to the health coverage provided
by other countries. Other commenters
requested that coverage rules be changed
so that children over age 25 could remain
enrolled on a parent’s health insurance
policies, while others recommended that
health care providers be required to accept
Medicare and Medicaid insurance. These
comments are outside the scope of matters
handled by the Treasury Department and
the IRS and thus are not addressed in the
final regulations.
X. Severability
If any provision in this rulemaking
is held to be invalid or unenforceable
facially, or as applied to any person or
circumstance, it shall be severable from
the remainder of this rulemaking, and
shall not affect the remainder thereof, or
the application of the provision to other
persons not similarly situated or to other
dissimilar circumstances.
Special Analyses
I. Regulatory Planning and Review –
Economic Analysis
EOs 12866 and 13563 direct agencies
to assess costs and benefits of available
regulatory alternatives and, if regulation is
necessary, to select regulatory approaches
that maximize net benefits (including
potential economic, environmental, pub-
lic health and safety effects, distributive
impacts, and equity). EO 13563 empha-
sizes the importance of quantifying both
costs and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility.
These final regulations have been des-
ignated as subject to review under EO
12866 pursuant to the 2018 MOA between
the Treasury Department and OMB
regarding review of tax regulations.
A. Background
1. Affordability of employer coverage for
family members of an employee
As noted earlier in this preamble, sec-
tion 36B provides a PTC for applicable
taxpayers who meet certain eligibility
requirements, including that the taxpayer
or one or more family members is enrolled
in a QHP for one or more months in which
they are not eligible for other MEC. How-
ever, an individual who is eligible to enroll
in employer coverage, but chooses not to,
is not considered eligible for the employer
coverage if it is “unaffordable.” Section
36B defines employer coverage as unaf-
fordable for an employee if the employ-
ee’s share of the self-only premium is
more than 9.5 percent of the employee’s
household income.
Section 1.36B-2(c)(3)(v)(A)(2) pro-
vides that affordability of employer cov-
erage for each related individual of the
employee is determined by the cost of
self-only coverage. Thus, the employee
and any related individuals included in the
employee’s family, within the meaning of
§1.36B-1(d), are eligible for MEC and are
ineligible for the PTC if (1) the plan pro-
vides minimum value and (2) the employ-
ee’s share of the self-only coverage is
not more than 9.5 percent of household
income (that is, the self-only coverage for
the employee is “affordable”).
2. Description of the final regulations
The final regulations revise §1.36B-
2(c)(3)(v)(A)(2) to provide a separate
affordability test for related individu-
als based on the cost to the employee of
family coverage. The final regulations
do not change the affordability test for
the employee. When a family applies for
Exchange coverage, the Exchange will
ask for information concerning which of
the family members are offered coverage
by their own employer, and the family
members to whom the employer’s cov-
erage offer extends. When an applicant
for whom APTC is otherwise allowed
57
https://www.aeaweb.org/articles?id=10.1257/pol.20190279.
58
https://academic.oup.com/restud/article/87/2/792/5538992?login=false.
59
For context, as of May 2022, there were nearly 89 million individuals enrolled in Medicaid or CHIP. The change of 90,000 people predicted by the Urban Institute analysis is a change of
0.1 percent. See https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/downloads/may-2022-medicaid-chip-enrollment-trend-snapshot.pdf.

November 7, 2022 432 Bulletin No. 2022–45
indicates that their employer offers them
coverage, the Exchange will ask for the
premium for self-only coverage for the
applicant and make an affordability deter-
mination for the applicant on that basis.
When an applicant for whom APTC is oth-
erwise allowed indicates an offer of cover-
age through an employer of another fam-
ily member, the Exchange will ask for the
premium for family coverage and make an
affordability determination for the appli-
cant on that basis. It is therefore possible
that family members would be eligible for
APTC but the employee would not. In this
case, if the entire family chooses to enroll
in Exchange coverage with APTC, the
APTC would be paid only for coverage of
the employee’s family members but would
not be paid for coverage of the employee.
B. Baseline
The Treasury Department and the IRS
have assessed the benefits and costs of
the final regulations relative to a no-ac-
tion baseline reflecting anticipated Fed-
eral income tax-related behavior in the
absence of these regulations.
C. Affected entities
Some families with an offer of
employer coverage to the employee and
at least one other family member would
be newly eligible for the PTC for the
Exchange coverage of the non-employee
family members. The final regulations
will have no effect on families for whom
self-only employer coverage costs more
than 9.5 percent of household income – as
family coverage is more expensive than
self-only coverage – because the afford-
ability status of their employer coverage
is unchanged. Similarly, the final regula-
tions will not affect families for whom the
cost of family employer coverage does not
exceed 9.5 percent of household income
because their coverage is determined to
be affordable either way. In contrast, the
final regulations will affect only family
members – other than the employee – for
whom the employee’s cost for the avail-
able employer coverage does not exceed
9.5 percent of household income for a
self-only plan but does exceed 9.5 percent
of household income for a family plan or
for whom the offer of the family plan is
affordable but does not provide minimum
value.
Employers may see some of their
employees shift from family coverage to
self-only coverage when family mem-
bers newly qualify for the PTC. The cost
per enrollee could increase or decrease
depending on the characteristics of those
that remain covered. However, this shift
will likely lead to a small decrease in the
total amount employers are spending on
health coverage – due to covering fewer
total people – as the Federal govern-
ment increases spending on PTC for the
non-employee family members who move
from employer coverage to Exchange
coverage.
D. Economic analysis of the final
regulations
1. Overview
For some families, the final regulations
will lower the premium contributions
required to purchase coverage for all fam-
ily members by allowing family members
other than the employee to receive a PTC.
For some families with offers of employer
coverage who will be newly eligible for
the PTC, the combined cost of split cover-
age (self-only employer coverage for the
employee plus PTC-subsidized Exchange
coverage for related individuals) will be
lower than what they pay for family cov-
erage through the employer. Some low-in-
come families with uninsured individuals
where the employee is offered low-cost,
self-only employer coverage and rela-
tively high-cost family employer cover-
age will gain access to a lower-cost option
through eligibility for the PTC on behalf
of one or more related individuals.
However, the cost for families to pur-
chase Exchange coverage with PTC is
determined in part by the applicable per-
centage and household income, which are
the same regardless of the number of indi-
viduals actually covered. Therefore, if the
number of individuals needing Exchange
coverage is small – such as when some
family members have access to other
MEC – the cost of Exchange coverage per
enrollee is relatively high when added to
the cost of the employee share of self-only
employer coverage. Furthermore, split
coverage also means multiple deductibles
and maximum out-of-pocket limits for the
family, which potentially increases out-
of-pocket costs for families. As a result of
these features, many families with offers
of employer coverage who will be newly
eligible for the PTC under the final reg-
ulations – including families with some
uninsured individuals – would not see any
savings in the combined cost of out-of-
pocket premiums and cost sharing. Lastly,
many families may prefer the benefits and
provider networks of employer coverage,
compared to Exchange coverage.
Taking all these factors into account,
the Treasury Department and the IRS
expect new take-up of Exchange coverage
may be modest relative to the size of the
newly eligible population and relative to
the total number of individuals who are
either uninsured or covered by employer
coverage because many will either still
prefer employer coverage or prefer to pur-
chase other goods and services, or save
or invest, rather than insure all family
members.
The Office of Tax Analysis has eval-
uated the effect of the policy change on
health insurance coverage decisions and
the Federal deficit. The policy change is
predicted to increase the number of indi-
viduals with PTC-subsidized Exchange
coverage by approximately 1 million and
increase the Federal deficit by an average
of $3.8 billion per year over the next 10
years. The deficit increases as enrollment
in PTC-subsidized Exchange coverage
increases, offset by a modest decrease
in the tax exclusion for employer cover-
age.
60
These changes to the revenue effect
associated with the PTC as well as the
tax exclusion for employer coverage are
transfer payments. Transfer payments are
neither a cost nor a benefit. The analysis
relied on tax data as well as the Medical
Expenditure Panel Survey. The Medical
Expenditure Panel Survey dataset includes
several variables that are not observed in
the tax data such as employee contribution
60
The predictions rely on various assumptions including, but not limited to, the economic and technical assumptions from the 2023 Mid-Session Review. The assumptions are based on the
current law baseline as of August 31, 2022. The baseline includes the PTC changes enacted under the IRA.

Bulletin No. 2022–45 433 November 7, 2022
amounts for family coverage as well as
health care utilization.
2. Benefits
Gain of health insurance coverage.
For those individuals who are uninsured
because the premiums for family cover-
age through a family member’s employer
are unaffordable, gaining access to the
PTC for the purchase of Exchange cover-
age may make coverage more affordable
and may prompt some of them to take up
coverage.
Additional health insurance option. For
those individuals who are covered by fam-
ily coverage through a family member’s
employer that costs more than 9.5 percent
of their household income, the final regu-
lations will, by providing access to a PTC,
give them an additional option that could
provide coverage at a lower cost or with
more comprehensive benefits.
3. Costs
Administrative costs. Adding this new
option for eligibility for PTC increases the
cost to the IRS to evaluate PTC claims.
The IRS’s PTC infrastructure will require
one-time changes to certain processes,
forms, and instructions to be imple-
mented in time for the 2023 taxable year,
and the cost of these changes is expected
to be negligible. The Centers for Medi-
care & Medicaid Services (CMS), as the
administrator of the Federally-facilitated
Exchanges and the Federal Exchange
eligibility and enrollment platform, and
the State Exchanges that operate their
own Exchange eligibility and enrollment
platforms will also incur administrative
costs as the Exchanges will have pri-
mary responsibility for implementing the
rule as part of the eligibility and enroll-
ment process when families are apply-
ing for Exchange coverage with APTC.
Exchanges will incur one-time costs to
update Exchange eligibility systems to
account for the new treatment of family
contribution amounts for employer cov-
erage for purposes of determining eligi-
bility for APTC. In addition, CMS, State
Exchanges, State Medicaid Agencies, and
CMS-approved Enhanced Direct Enroll-
ment partners will incur administrative
costs to make conforming updates to their
respective consumer applications and
consumer-facing affordability tools. The
Treasury Department and the IRS antic-
ipate total administrative costs to CMS,
the Exchanges, State Medicaid Agencies,
and Enhanced Direct Enrollment partners
associated with the final regulation to be
modest.
The Treasury Department and the
IRS do not expect any new administra-
tive costs for employers because the final
regulations do not impose new reporting
requirements. Under current regulations,
ALEs must report the cost of self-only
coverage on Form 1095-C. The primary
purpose of this reporting is to collect
information relevant for the administra-
tion of the employer shared responsibil-
ity provisions in section 4980H. Because
the cost of family coverage is not rele-
vant for computing the employer shared
responsibility payment, the final regula-
tions do not require ALEs to report the
cost of family coverage on Form 1095-C.
Further, as noted earlier in this preamble,
these final regulations do not amend the
regulations under section 6055 or 6056,
and the IRS does not intend to revise
Form 1095-B or Form 1095-C to require
any additional data elements related to
the new rules.
4. Transfer payments
Increased PTC costs for new Exchange
enrollees. Because some individuals may
be newly eligible for the PTC, some indi-
viduals may move from employer cov-
erage or uninsured status to Exchange
coverage. Thus, the final regulations may
increase the amount of PTC being paid
by the government and reduce employer
contributions.
Decreased employer exclusion for peo-
ple who drop employer coverage. If indi-
viduals drop their employer coverage, or
do not enroll when they otherwise would
have, to take up Exchange coverage, the
amount of money that was going toward
their employer coverage, which provides
tax-preferred health benefits, will go into
the employee’s wages, other employees’
wages, and/or employer profits and will
no longer be tax exempt. Thus, the final
regulations may increase the amount of
tax revenue received from income and
payroll taxes.
II. Paperwork Reduction Act
This final rule does not include infor-
mation collections under the Paperwork
Reduction Act (5 U.S.C. chapter 35).
III. Regulatory Flexibility Act
It is hereby certified that these final
regulations will not have a significant eco-
nomic impact on a substantial number of
small entities within the meaning of sec-
tion 601(6) of the Regulatory Flexibility
Act (5 U.S.C. chapter 6).
As mentioned in the response to com-
menters, the Treasury Department and the
IRS hereby certify that these final regula-
tions will not have a significant economic
impact on a substantial number of small
entities. This certification is based on the
fact that the majority of the effect of the
final regulations falls on individual tax-
payers, and entities will experience only
small changes.
Pursuant to section 7805(f) of the Code,
these final regulations were submitted to
the Chief Counsel for the Office of Advo-
cacy of the Small Business Administration
for comment on their impact on small busi-
ness, and no comments were received.
IV. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates
Reform Act of 1995 (UMRA) requires
that agencies assess anticipated costs and
benefits and take certain other actions
before issuing a final rule that includes
any Federal mandate that may result in
expenditures in any one year by a state,
local, or tribal government, in the aggre-
gate, or by the private sector, of $100 mil-
lion (updated annually for inflation). This
rule does not include any Federal mandate
that may result in expenditures by state,
local, or tribal governments, or by the pri-
vate sector in excess of that threshold.
V. Executive Order 13132: Federalism
EO 13132 (Federalism) prohibits an
agency from publishing any rule that has
Federalism implications if the rule either
imposes substantial, direct compliance
costs on state and local governments, and
is not required by statute, or preempts
state law, unless the agency meets the

November 7, 2022 434 Bulletin No. 2022–45
consultation and funding requirements
of section 6 of the EO. This rule does not
have Federalism implications and does not
impose substantial direct compliance costs
on state and local governments or preempt
state law within the meaning of the EO.
VI. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Office of
Information and Regulatory Affairs desig-
nated this rule as a major rule as defined
by 5 U.S.C. 804(2).
Statement of Availability of IRS
Documents
Guidance cited in this preamble is pub-
lished in the Internal Revenue Bulletin and
is available from the Superintendent of
Documents, U.S. Government Publishing
Office, Washington, DC 20402, or by visit-
ing the IRS website at https://www.irs.gov.
Drafting Information
The principal author of these regula-
tions is Clara L. Raymond of the Office
of Associate Chief Counsel (Income Tax
and Accounting). However, other person-
nel from the Treasury Department and the
IRS participated in the development of
these regulations.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and record-
keeping requirements.
Adoption of Amendments to the
Regulations
Accordingly, the Treasury Depart-
ment and the IRS amend 26 CFR part 1
as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.36B-0 is amended by:
a. Adding an entry for §1.36B-2(c)(3)
(v)(A)(8);
b. Adding entries for §1.36B-6(a)(1)
and (2) and (a)(2)(i) and (ii); and
c. Revising the entry for §1.36B-6(g)(2).
The additions and revisions read as
follows:
§ 1.36B-0 Table of contents.
* * * * *
§1.36B-2 Eligibility for premium tax
credit.
* * * * *
(c) * * *
(3) * * *
(v) * * *
(A) * * *
(8) Multiple offers of coverage.
* * * * *
§1.36B-6 Premium tax credit definitions.
(a) * * *
(1) Employees.
(2) Related individuals
(i) In general.
(ii) Plans providing MV to employees.
* * * * *
(g) * * *
(2) Exceptions.
Par. 3. Section 1.36B-2 is amended by:
a. Revising the first sentence and add-
ing a new second sentence in paragraph
(c)(3)(v)(A)(2).
b. Adding paragraph (c)(3)(v)(A)(8).
c. Revising the second sentence of
paragraph (c)(3)(v)(B).
d. In paragraph (c)(3)(v)(D), Examples
1 through 9 are designated as paragraphs
(c)(3)(v)(D)(1) through (9), respectively.
e. In newly designated paragraphs (c)
(3)(v)(D)(3), (5), (6), (7), and (9), redes-
ignating the paragraphs in the first column
as the paragraphs in the second column:
Old paragraphsNew paragraphs
(c)(3)(v)(D)(3)(i)
through (ii)
(c)(3)(v)(D)(3)(i)
through (ii)
(c)(3)(v)(D)(5)(i)
through (ii)
(c)(3)(v)(D)(5)(i)
through (ii)
(c)(3)(v)(D)(6)(i)
through (ii)
(c)(3)(v)(D)(6)(i)
through (ii)
(c)(3)(v)(D)(7)(i)
through (iv)
(c)(3)(v)(D)(7)(i)
through (iv)
(c)(3)(v)(D)(9)(i)
through (ii)
(c)(3)(v)(D)(9)(i)
through (ii)
f. Revising newly redesignated para-
graphs (c)(3)(v)(D)(1) and (2).
g. Redesignating paragraphs (c)(3)(v)
(D)(3) through (9) as paragraphs (c)(3)(v)
(D)(7) through (13), respectively.
h. Adding new paragraphs (c)(3)(v)(D)
(3) through (6).
i. Revising the heading for newly
redesignated paragraph (c)(3)(v)(D)(7),
the heading and first sentence of newly
redesignated paragraph (c)(3)(v)(D)(8),
the heading of newly redesignated para-
graph (c)(3)(v)(D)(9), and the first sen-
tence of newly redesignated paragraph (c)
(3)(v)(D)(9)(i).
j. In the headings for newly redesig-
nated paragraphs (c)(3)(v)(D)(10) through
(13), removing the first period and adding
a colon in its place.
k. Revising paragraph (e)(1).
l. Adding paragraph (e)(5).
The revisions and additions read as
follows:
§ 1.36B-2 Eligibility for premium tax
credit.
* * * * *
(c) * * *
(3) * * *
(v) * * *
(A) * * *
(2) * * * Except as provided in para-
graph (c)(3)(v)(A)(3) of this section,
an eligible employer-sponsored plan is
affordable for a related individual if the
employee’s required contribution for
family coverage under the plan does not
exceed the required contribution percent-
age, as defined in paragraph (c)(3)(v)(C)
of this section, of the applicable taxpay-
er’s household income for the taxable
year. For purposes of this paragraph (c)(3)
(v)(A)(2), an employee’s required contri-
bution for family coverage is the portion
of the annual premium the employee must
pay for coverage of the employee and all
other individuals included in the employ-
ee’s family, as defined in §1.36B-1(d),
who are offered coverage under the eligi-
ble employer-sponsored plan. * * *
* * * * *
(8) Multiple offers of coverage. An
individual who has offers of coverage
under eligible employer-sponsored plans
from multiple employers, either as an
employee or a related individual, has an

Bulletin No. 2022–45 435 November 7, 2022
offer of affordable coverage if at least
one of the offers of coverage is affordable
under paragraph (c)(3)(v)(A)(1) or (2) of
this section.
(B) * * * Coverage under an eligible
employer-sponsored plan is affordable for a
part-year period if the annualized required
contribution for self-only coverage, in the
case of an employee, or family coverage,
in the case of a related individual, under
the plan for the part-year period does not
exceed the required contribution percent-
age of the applicable taxpayer’s household
income for the taxable year. * * *
* * * * *
(D) * * *
(1) Example 1: Basic determination of afford-
ability. For all of 2023, taxpayer C works for an
employer, X, that offers its employees and their
spouses a health insurance plan under which, to
enroll in self-only coverage, C must contribute an
amount for 2023 that does not exceed the required
contribution percentage of C’s 2023 household
income. Because C’s required contribution for self-
only coverage does not exceed the required contri-
bution percentage of C’s household income, under
paragraph (c)(3)(v)(A)(1) of this section, X’s plan
is affordable for C, and C is eligible for minimum
essential coverage for all months in 2023.
(2) Example 2: Basic determination of afford-
ability for a related individual. (i) The facts are the
same as in paragraph (c)(3)(v)(D)(1) of this section
(Example 1), except that C is married to J, they file a
joint return, and to enroll C and J, X’s plan requires
C to contribute an amount for coverage for C and
J for 2023 that exceeds the required contribution
percentage of C’s and J’s household income. J does
not work for an employer that offers employer-spon-
sored coverage.
(ii) J is a member of C’s family as defined in
§1.36B-1(d). Because C’s required contribution for
coverage of C and J exceeds the required contribu-
tion percentage of C’s and J’s household income,
under paragraph (c)(3)(v)(A)(2) of this section, X’s
plan is unaffordable for J. Accordingly, J is not eligi-
ble for minimum essential coverage for 2023. How-
ever, under paragraph (c)(3)(v)(A)(1) of this section,
X’s plan is affordable for C, and C is eligible for
minimum essential coverage for all months in 2023.
(3) Example 3: Multiple offers of coverage. The
facts are the same as in paragraph (c)(3)(v)(D)(2) of
this section (Example 2), except that J works all year
for an employer that offers employer-sponsored cov-
erage to employees. J’s required contribution for the
cost of self-only coverage from J’s employer does
not exceed the required contribution percentage of
C’s and J’s household income. Although the cover-
age offered by C’s employer for C and J is unafford-
able for J, the coverage offered by J’s employer is
affordable for J. Consequently, under paragraphs (c)
(3)(v)(A)(1) and (8) of this section, J is eligible for
minimum essential coverage for all months in 2023.
(4) Example 4: Cost of covering individuals not
part of taxpayer’s family. (i) D and E are married, file
a joint return, and have two children, F and G, under
age 26. F is a dependent of D and E, but G is not. D
works all year for an employer that offers employ-
er-sponsored coverage to employees, their spouses,
and their children under age 26. E, F, and G do not
work for employers offering coverage. D’s required
contribution for self-only coverage under D’s
employer’s coverage does not exceed the required
contribution percentage of D’s and E’s household
income. D’s required contribution for coverage of D,
E, F, and G exceeds the required contribution per-
centage of D’s and E’s household income, but D’s
required contribution for coverage of D, E, and F
does not exceed the required contribution percentage
of the household income.
(ii) E and F are members of D’s family as defined
in §1.36B-1(d). G is not a member of D’s family
under §1.36B-1(d), because G is not D’s dependent.
Under paragraph (c)(3)(v)(A)(1) of this section, D’s
employer’s coverage is affordable for D because D’s
required contribution for self-only coverage does not
exceed the required contribution percentage of D’s
and E’s household income. D’s employer’s coverage
also is affordable for E and F, because, under para-
graph (c)(3)(v)(A)(2) of this section, D’s required
contribution for coverage of D, E, and F does not
exceed the required contribution percentage of D’s
and E’s household income. Although D’s cost to
cover D, E, F, and G exceeds the required contribu-
tion percentage of D’s and E’s household income,
under paragraph (c)(3)(v)(A)(2) of this section, the
cost to cover G is not considered in determining
whether D’s employer’s coverage is affordable for
E and F, regardless of whether G actually enrolls in
the plan, because G is not in D’s family. D, E, and
F are eligible for minimum essential coverage for
all months in 2023. Under paragraph (c)(4)(i) of
this section, G is considered eligible for the cover-
age offered by D’s employer only if G enrolls in the
coverage.
(5) Example 5: More than one family member
with an employer offering coverage. (i) K and L are
married, file a joint return, and have one dependent
child, M. K works all year for an employer that offers
coverage to employees, spouses, and children under
age 26. L works all year for an employer that offers
coverage to employees only. K’s required contribu-
tion for self-only coverage under K’s employer’s
coverage does not exceed the required contribu-
tion percentage of K’s and L’s household income.
Likewise, L’s required contribution for self-only
coverage under L’s employer’s coverage does not
exceed the required contribution percentage of K’s
and L’s household income. However, K’s required
contribution for coverage of K, L, and M exceeds
the required contribution percentage of K’s and L’s
household income.
(ii) L and M are members of K’s family as defined
in §1.36B-1(d). Under paragraph (c)(3)(v)(A)(1) of
this section, K’s employer’s coverage is affordable
for K because K’s required contribution for self-only
coverage does not exceed the required contribution
percentage of K’s and L’s household income. Sim-
ilarly, L’s employer’s coverage is affordable for L,
because L’s required contribution for self-only cov-
erage does not exceed the required contribution per-
centage of K’s and L’s household income. Thus, K
and L are eligible for minimum essential coverage
for all months in 2023. However, under paragraph
(c)(3)(v)(A)(2) of this section, K’s employer’s cov-
erage is unaffordable for M, because K’s required
contribution for coverage of K, L, and M exceeds
the required contribution percentage of K’s and L’s
household income. Accordingly, M is not eligible for
minimum essential coverage for 2023.
(6) Example 6: Multiple offers of coverage for
a related individual. (i) The facts are the same as in
paragraph (c)(3)(v)(D)(5) of this section (Example
5), except that L works all year for an employer
that offers coverage to employees, spouses, and
children under age 26. L’s required contribution
for coverage of K, L, and M does not exceed the
required contribution percentage of K’s and L’s
household income.
(ii) Although M is not eligible for affordable
employer coverage under K’s employer’s coverage,
paragraph (c)(3)(v)(A)(8) of this section dictates that
L’s employer coverage must be evaluated to deter-
mine whether L’s employer coverage is affordable
for M. Under paragraph (c)(3)(v)(A)(2) of this sec-
tion, L’s employer’s coverage is affordable for M,
because L’s required contribution for K, L, and M
does not exceed the required contribution percent-
age of K’s and L’s household income. Accordingly,
M is eligible for minimum essential coverage for all
months in 2023.
(7) Example 7: Determination of unaffordability
at enrollment. * * *
(8) Example 8: Determination of unaffordability
for plan year. The facts are the same as in paragraph
(c)(3)(v)(D)(7) of this section (Example 7), except
that X’s employee health insurance plan year is Sep-
tember 1 to August 31. * * *
(9) Example 9: No affordability information
affirmatively provided for annual redetermination.
(i) The facts are the same as in paragraph (c)(3)
(v)(D)(7) of this section (Example 7), except the
Exchange redetermines D’s eligibility for advance
credit payments for 2015. * * *
* * * * *
(e) * * *
(1) Except as provided in paragraphs
(e)(2) through (5) of this section, this sec-
tion applies to taxable years ending after
December 31, 2013.
* * * * *
(5) The first two sentences of para-
graph (c)(3)(v)(A)(2), paragraph (c)(3)(v)
(A)(8), the second sentence of paragraph
(c)(3)(v)(B), paragraphs (c)(3)(v)(D)(1)
through (6), and the first sentences of
paragraphs (c)(3)(v)(D)(8) and (9) of this
section apply to taxable years beginning
after December 31, 2022.
Par. 4. Section 1.36B-3 is amended
by revising paragraphs (d)(1)(i) and (n)
(1) and adding paragraph (n)(3) to read as
follows:
§ 1.36B-3 Computing the premium
assistance credit amount.
* * * * *

November 7, 2022 436 Bulletin No. 2022–45
(d) * * *
(1) * * *
(i) The premiums for the month,
reduced by any amounts that were
refunded in the same taxable year as the
premium liability is incurred, for one or
more qualified health plans in which a
taxpayer or a member of the taxpayer’s
family enrolls (enrollment premiums); or
* * * * *
(n) * * *
(1) Except as provided in paragraphs
(n)(2) and (3) of this section, this sec-
tion applies to taxable years ending after
December 31, 2013.
* * * * *
(3) Paragraph (d)(1)(i) of this section
applies to taxable years beginning after
December 31, 2022.
Par. 5. Section 1.36B-6 is amended by
revising paragraphs (a) and (g)(2) to read
as follows:
§ 1.36B-6 Minimum value.
(a) In general—(1) Employees. An eli-
gible employer-sponsored plan provides
minimum value (MV) for an employee of
the employer offering the coverage only
if—
(i) The plan’s MV percentage, as
defined in paragraph (c) of this section,
is at least 60 percent based on the plan’s
share of the total allowed costs of benefits
provided to the employee; and
(ii) The plan provides substantial cov-
erage of inpatient hospital services and
physician services.
(2) Related individuals—(i) In gen-
eral. An eligible employer-sponsored plan
provides MV for an individual who may
enroll in the plan because of a relationship
to an employee of the employer offering
the coverage (a related individual) only
if—
(A) The plan’s MV percentage, as
defined in paragraph (c) of this section,
is at least 60 percent based on the plan’s
share of the total allowed costs of ben-
efits provided to the related individual;
and
(B) The plan provides substantial cov-
erage of inpatient hospital services and
physician services.
(ii) Plans providing MV to employees.
If an eligible employer-sponsored plan
provides MV to an employee under para-
graph (a)(1) of this section, the plan also
provides MV for related individuals if—
(A) The scope of benefits is the same
for the employee and related individuals;
and
(B) Cost sharing (including deduct-
ibles, co-payments, coinsurance, and
out-of-pocket maximums) under the
plan is the same for the employee and
related individuals under the tier of cov-
erage that would, if elected, include the
employee and all related individuals
(disregarding any differences in deduct-
ibles or out-of-pocket maximums that
are attributable to a different tier of cov-
erage, such as self plus one versus fam-
ily coverage).
* * * * *
(g) * * *
(2) Exceptions. (i) Paragraph (a)(1)
(ii) of this section applies for plan years
beginning after November 3, 2014; and
(ii) Paragraph (a)(2) of this section
applies to taxable years beginning after
December 31, 2022.
Douglas W. O’Donnell,
Deputy Commissioner for Services
and Enforcement.
Approved: October 1, 2022.
Lily Batchelder,
Assistant Secretary of the Treasury
(Tax Policy).
(Filed by the Office of the Federal Register on Octo-
ber 11, 2022, 8:45 a.m., and published in the issue of
the Federal Register for October 13, 2022, 87 F.R.
61979)

Bulletin No. 2022–45 437 November 7, 2022
Part III
Certain Required Minimum
Distributions for 2021 and
2022
Notice 2022-53
I. Purpose
This notice announces that the Depart-
ment of the Treasury (Treasury Depart-
ment) and the Internal Revenue Service
(IRS) intend to issue final regulations
related to required minimum distributions
(RMDs) under section 401(a)(9) of the
Internal Revenue Code (Code) that will
apply no earlier than the 2023 distribu-
tion calendar year. In addition, this notice
provides guidance related to certain pro-
visions of section 401(a)(9) that apply for
2021 and 2022.
II. Background
A. Section 401(a)(9)
Section 401(a)(9) provides rules for
RMDs from a qualified plan during the
life of the employee in section 401(a)(9)
(A) and after the death of the employee in
section 401(a)(9)(B). The rules set forth
a required beginning date for distribu-
tions and identify the period over which
the employee’s entire interest must be
distributed.
Specifically, section 401(a)(9)(A)
(ii) provides that the entire interest of
an employee in a qualified plan must be
distributed, beginning not later than the
employee’s required beginning date, in
accordance with regulations, over the life
of the employee or over the lives of the
employee and a designated beneficiary
(or over a period not extending beyond
the life expectancy of the employee and a
designated beneficiary).
Section 401(a)(9)(B)(i) provides that, if
the employee dies after distributions have
begun, the employee’s remaining interest
must be distributed at least as rapidly as
under the distribution method used by the
employee as of the date of the employee’s
death. Section 401(a)(9)(B)(ii) and (iii)
provides that, if the employee dies before
required minimum distributions have
begun, the employee’s interest must either
be: (1) distributed within 5 years after the
death of the employee (5-year rule), or
(2) distributed (in accordance with regula-
tions) over the life or life expectancy of the
designated beneficiary with the distribu-
tions beginning no later than 1 year after
the date of the employee’s death (subject
to an exception in section 401(a)(9)(B)
(iv) if the designated beneficiary is the
employee’s surviving spouse).
The rules of section 401(a)(9) are incor-
porated by reference in section 408(a)
(6) and (b)(3) for individual retirement
accounts and individual retirement annu-
ities (collectively, IRAs), section 408A(c)
(5) for Roth IRAs, section 403(b)(10) for
annuity contracts, custodial accounts, and
retirement income accounts described in
section 403(b) (section 403(b) plans), and
section 457(d) for eligible deferred com-
pensation plans.
B. Section 401(a)(9)(H) as added by the
SECURE Act
1. New 10-year rule
Section 401(a)(9) of the Code was
amended by section 401 of the Setting
Every Community Up for Retirement
Enhancement Act of 2019 (SECURE Act),
enacted on December 20, 2019, as Divi-
sion O of the Further Consolidated Appro-
priations Act, 2020, Pub. L. 116-94, 133
Stat. 2534 (2019) to add section 401(a)
(9)(H) to the Code. Generally, pursuant
to section 401(a)(9)(H)(i), if an employee
in a defined contribution plan has a des-
ignated beneficiary, the 5-year period
under the 5-year rule is lengthened to 10
years (10-year rule) and the new 10-year
rule applies regardless of whether the
employee dies before the required begin-
ning date. In addition, pursuant to sec-
tion 401(a)(9)(H)(ii), the section 401(a)
(9)(B)(iii) exception to the 10-year rule
(under which the 10-year rule is treated
as satisfied if distributions are paid over
the designated beneficiary’s lifetime or
life expectancy) applies only if the desig-
nated beneficiary is an eligible designated
beneficiary, as that term is defined in the
new section 401(a)(9)(E)(ii).
Section 401(a)(9)(H)(iii) provides that
when an eligible designated beneficiary
dies before that individual’s portion of the
employee’s interest in the plan has been
distributed, the beneficiary of the eligible
designated beneficiary will be subject to
a requirement that the remainder of that
individual’s portion be distributed within
10 years of the eligible designated bene-
ficiary’s death. In addition, section 401(a)
(9)(E)(iii) provides that when a minor
child reaches the age of majority, that child
will no longer be considered an eligible
designated beneficiary and the remainder
of that child’s portion of the employee’s
interest in the plan must be distributed
within 10 years of that date.
2. Section 401(a)(9)(H) effective date
Section 401(b)(1) of the SECURE Act
provides that, generally, the amendments
made to section 401(a)(9)(H) of the Code
apply to distributions with respect to
employees who die after December 31,
2019. Pursuant to section 401(b)(2) and
(3) of the SECURE Act, later effective
dates apply for certain collectively bar-
gained plans and governmental plans (as
defined in section 414(d) of the Code).
Section 401(b)(4) of the SECURE Act
provides that section 401(a)(9)(H) of the
Code does not apply to payments under
certain annuity contracts under which
payment commenced (or the manner of
payments was fixed) before December 20,
2019. Section 401(b)(5) of the SECURE
Act provides that if an employee who
participated in a plan died before sec-
tion 401(a)(9)(H) of the Code became
effective with respect to the plan, and the
employee’s designated beneficiary died
after that effective date, then that desig-
nated beneficiary is treated as an eligible
designated beneficiary and section 401(a)
(9)(H) applies to any beneficiary of that
designated beneficiary.
C. Excise tax under section 4974(a)
Section 4974(a) provides that if the
amount distributed during the taxable

November 7, 2022 438 Bulletin No. 2022–45
year of a payee under any qualified retire-
ment plan (as defined in section 4974(c))
or any eligible deferred compensation
plan (as defined in section 457(b)) is
less than that taxable year’s minimum
required distribution (as defined in sec-
tion 4974(b)), then an excise tax is
imposed on the payee equal to 50 percent
of the amount by which the minimum
required distribution for the taxable year
exceeds the amount actually distributed
in that taxable year.
D. Section 401(a)(9) proposed
regulations
The Treasury Department and the IRS
published proposed regulations regarding
RMDs under section 401(a)(9) of the Code
and related provisions in the Federal Reg-
ister on February 24, 2022 (87 FR 10504),
which provided that the regulations, when
finalized, would apply beginning with the
2022 distribution calendar year. Along
with other matters, the proposed regula-
tions address issues relating to the new
10-year rule in section 401(a)(9)(H) of the
Code. Specifically, Prop. Reg. § 1.401(a)
(9)-5(d)(1)(i) requires that, in the case
of an employee who dies on or after the
employee’s required beginning date, dis-
tributions to the employee’s beneficiaries
for calendar years after the calendar year
of the employee’s death must satisfy sec-
tion 401(a)(9)(B)(i). In addition, distribu-
tions to the employee’s beneficiaries must
also satisfy section 401(a)(9)(B)(ii) (or if
applicable, section 401(a)(9)(B)(iii), tak-
ing into account section 401(a)(9)(E)(iii),
(H)(ii), and (H)(iii)).
In order to satisfy section 401(a)(9)(B)
(i), the beneficiary of an employee who
died after the employee’s required begin-
ning date must take an annual required
minimum distribution beginning in the
first calendar year after the calendar year
of the employee’s death. In order to sat-
isfy section 401(a)(9)(B)(ii), the remain-
ing account balance must be distributed
by the 10
th
calendar year after the calen-
dar year of the employee’s death (subject
to an exception under section 401(a)(9)
(B)(iii), if applicable). In order to satisfy
both of those requirements, the proposed
regulations generally provide that, in the
case of an employee who dies after the
employee’s required beginning date with a
designated beneficiary who is not an eligi-
ble designated beneficiary (and for whom
the section 401(a)(9)(B)(iii) alternative to
the 10-year rule is not applicable), annual
RMDs must continue to be taken after the
death of the employee, with a full distribu-
tion required by the end of the 10
th
calen-
dar year following the calendar year of the
employee’s death.
In accordance with section 401(a)(9)
(B)(iii), in the case of a designated bene-
ficiary who is an eligible designated ben-
eficiary, the proposed regulations include
an alternative to the 10-year rule under
which annual lifetime or life expectancy
payments are made to the beneficiary
beginning in the year following the year
of the employee’s death. Under the pro-
posed regulations, if an eligible desig-
nated beneficiary of an employee is using
the lifetime or life expectancy payment
alternative to the 10-year rule, then the
eligible designated beneficiary (and, after
the death of the eligible designated bene-
ficiary, the beneficiary of the eligible des-
ignated beneficiary) must continue to take
annual distributions after the death of the
employee (with a full distribution made
no later than the 10
th
year after the year
of the eligible designated beneficiary’s
death). The proposed regulations provide
for similar treatment (that is, continued
annual RMDs with a requirement to take
a full distribution no later than the 10
th

year after a specified event) in the case of
a designated beneficiary who is a minor
child of the employee (with the specified
event being the child’s reaching the age of
majority).
E. Comments received by the Treasury
Department and the IRS
The Treasury Department and the IRS
provided a 90-day comment period for
the proposed regulations. During that
period, some individuals who are own-
ers of inherited IRAs or are beneficia-
ries under qualified defined contribution
plans or section 403(b) plans submitted
comments indicating that they thought
the new 10-year rule would apply dif-
ferently than what was proposed in
the proposed regulations. Specifically,
commenters believed that, regardless
of when an employee died, the 10-year
rule would operate like the 5-year rule,
under which there would not be any
RMD due for a calendar year until the
last year of the 5- or 10-year period fol-
lowing the specified event (the death of
the employee, the death of the eligible
designated beneficiary, or the attainment
of the age of majority for the employ-
ee’s child who is an eligible designated
beneficiary). Commenters in those situ-
ations who are heirs or beneficiaries of
individuals who died in 2020 explained
that they did not take an RMD in 2021
and are unsure of whether they would be
required to take an RMD in 2022. Com-
menters asserted that, if final regulations
adopt the interpretation of the 10-year
rule set forth in the proposed regulations,
the Treasury Department and the IRS
should provide transition relief for fail-
ure to take distributions that are RMDs
due in 2021 or 2022 pursuant to section
401(a)(9)(H) in the case of the death of
an employee (or designated beneficiary)
in 2020 or 2021.
III. Applicability Date of Final
Regulations
Final regulations regarding RMDs
under section 401(a)(9) of the Code and
related provisions will apply no earlier
than the 2023 distribution calendar year.
IV. Guidance for Certain RMDs for
2021 and 2022
A. Guidance for defined contribution
plans that did not make a specified RMD
A defined contribution plan that failed
to make a specified RMD (as defined in
Section IV.C of this notice) will not be
treated as having failed to satisfy sec-
tion 401(a)(9) merely because it did not
make that distribution.
B. Guidance for certain taxpayers who
did not take a specified RMD
To the extent a taxpayer did not take a
specified RMD (as defined in Section IV.C
of this notice), the IRS will not assert that
an excise tax is due under section 4974. If
a taxpayer has already paid an excise tax
for a missed RMD in 2021 that consti-
tutes a specified RMD, that taxpayer may
request a refund of that excise tax.

Bulletin No. 2022–45 439 November 7, 2022
C. Definition of specified RMD
For purposes of this notice only, a
specified RMD is any distribution that,
under the interpretation included in the
proposed regulations, would be required
to be made pursuant to section 401(a)
(9) in 2021 or 2022 under a defined con-
tribution plan or IRA that is subject to
the rules of 401(a)(9)(H) for the year in
which the employee (or designated ben-
eficiary) died if that payment would be
required to be made to:
• a designated beneficiary of an
employee under the plan (or IRA
owner) if: (1) the employee (or IRA
owner) died in 2020 or 2021 and on
or after the employee’s (or IRA own-
er’s) required beginning date, and (2)
the designated beneficiary is not tak-
ing lifetime or life expectancy pay-
ments pursuant to section 401(a)(9)
(B)(iii); or
• a beneficiary of an eligible desig-
nated beneficiary (including a des-
ignated beneficiary who is treated
as an eligible designated beneficiary
pursuant to section 401(b)(5) of the
SECURE Act) if: (1) the eligible
designated beneficiary died in 2020
or 2021, and (2) that eligible desig-
nated beneficiary was taking lifetime
or life expectancy payments pursu-
ant to section 401(a)(9)(B)(iii) of the
Code.
V. Drafting Information
The principal author of this notice is
Brandon Ford of the Office of the Asso-
ciate Chief Counsel (Employee Benefits,
Exempt Organizations, and Employment
Taxes). For further information regarding
this notice, contact Brandon Ford at (202)
317-4148 (not a toll-free number).
Update for Weighted
Average Interest Rates,
Yield Curves, and Segment
Rates
Notice 2022-54
This notice provides guidance on the
corporate bond monthly yield curve, the
corresponding spot segment rates used
under § 417(e)(3), and the 24-month
average segment rates under § 430(h)
(2) of the Internal Revenue Code. In
addition, this notice provides guid-
ance as to the interest rate on 30-year
Treasury securities under § 417(e)(3)
(A)(ii)(II) as in effect for plan years
beginning before 2008 and the 30-year
Treasury weighted average rate under
§ 431(c)(6)(E)(ii)(I).
YIELD CURVE AND SEGMENT
RATES
Section 430 specifies the minimum
funding requirements that apply to sin-
gle-employer plans (except for CSEC plans
under § 414(y)) pursuant to § 412. Section
430(h)(2) specifies the interest rates that
must be used to determine a plan’s target
normal cost and funding target. Under
this provision, present value is generally
determined using three 24-month average
interest rates (“segment rates”), each of
which applies to cash flows during speci-
fied periods. To the extent provided under
§ 430(h)(2)(C)(iv), these segment rates
are adjusted by the applicable percentage
of the 25-year average segment rates for
the period ending September 30 of the
year preceding the calendar year in which
the plan year begins.
1
However, an elec-
tion may be made under § 430(h)(2)(D)
(ii) to use the monthly yield curve in place
of the segment rates.
Notice 2007-81, 2007-44 I.R.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, and
the 24-month average corporate bond
segment rates used to compute the target
normal cost and the funding target. Con-
sistent with the methodology specified in
Notice 2007-81, the monthly corporate
bond yield curve derived from September
2022 data is in Table 2022-9 at the end
of this notice. The spot first, second, and
third segment rates for the month of Sep-
tember 2022 are, respectively, 4.48, 5.26,
and 5.07.
The 24-month average segment rates
determined under § 430(h)(2)(C)(i)
through (iii) must be adjusted pursuant to
§ 430(h)(2)(C)(iv) to be within the appli-
cable minimum and maximum percent-
ages of the corresponding 25-year aver-
age segment rates. The 25-year average
segment rates for plan years beginning
in 2021, 2022 and 2023 were published
in Notice 2020-72, 2020-40 I.R.B. 789,
Notice 2021-54, 2021-41 I.R.B. 457,
and Notice 2022-40, 2022-40 I.R.B. 266,
respectively.
24-MONTH AVERAGE CORPORATE
BOND SEGMENT RATES
The three 24-month average corporate
bond segment rates applicable for October
2022 without adjustment for the 25-year
average segment rate limits are as follows:
24-Month Average Segment Rates Without 25-Year Average Adjustment
Applicable Month First Segment Second Segment Third Segment
October 2022 1.57 3.21 3.66
1
Pursuant to § 433(h)(3)(A), the third segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount
of the full funding limitation under § 433(c)(7)(C)).
2
Section 80602 of the Infrastructure Investment and Jobs Act, Pub. L. 117-58, makes further changes to the time periods for which specified applicable minimum and maximum percentages
apply.

November 7, 2022 440 Bulletin No. 2022–45
25-YEAR AVERAGE SEGMENT
RATES
Section 9706(a) of the American Res-
cue Plan Act of 2021, Pub. L. 117-2 (the
ARP), which was enacted on March 11,
2021, changed the 25-year average seg-
ment rates and the applicable minimum
and maximum percentages used under
§ 430(h)(2)(C)(iv) of the Code to adjust
the 24-month average segment rates.
2

Prior to this change, the applicable min-
imum and maximum percentages were
85% and 115% for a plan year beginning
in 2021, and 80% and 120% for a plan
year beginning in 2022, respectively.
After this change, the applicable mini-
mum and maximum percentages are 95%
and 105% for a plan year beginning in
2021 or 2022. In addition, pursuant to
this change, any 25-year average seg-
ment rate that is less than 5% is deemed
to be 5%.
3
Pursuant to § 9706(c)(1) of the ARP,
these changes apply with respect to plan
years beginning on or after January 1,
2020. However, § 9706(c)(2) of the ARP
provides that a plan sponsor may elect not
to have these changes apply to any plan
year beginning before January 1, 2022.
4
The adjusted 24-month average seg-
ment rates set forth in the chart below
reflect § 430(h)(2)(C)(iv) of the Code
as amended by § 9706(a) of the ARP.
These adjusted 24-month average seg-
ment rates apply only for plan years for
which an election under § 9706(c)(2) of
the ARP is not in effect. For a plan year for
which such an election does not apply, the
24-month averages applicable for October
2022, adjusted to be within the applicable
minimum and maximum percentages of
the corresponding 25-year average seg-
ment rates in accordance with § 430(h)(2)
(C)(iv) of the Code, are as follows:
Adjusted 24-Month Average Segment Rates
For Plan Years
Beginning InApplicable MonthFirst SegmentSecond SegmentThird Segment
2021October 20224.755.366.11
2022October 20224.755.185.92
2023October 20224.755.005.74
The adjusted 24-month average seg-
ment rates set forth in the chart below do
not reflect the changes to § 430(h)(2)(C)
(iv) of the Code made by § 9706(a) of the
ARP. These adjusted 24-month average
segment rates apply only for plan years
for which an election under § 9706(c)(2)
of the ARP is in effect. For a plan year
for which such an election applies, the
24-month averages applicable for October
2022, adjusted to be within the applicable
minimum and maximum percentages of
the corresponding 25-year average seg-
ment rates in accordance with § 430(h)(2)
(C)(iv) of the Code, are as follows:
Pre-ARP Adjusted 24-Month Average Segment Rates
For Plan Years
Beginning InApplicable MonthFirst SegmentSecond SegmentThird Segment
2021October 20223.324.795.47
30-YEAR TREASURY SECURITIES
INTEREST RATES
Section 431 specifies the minimum
funding requirements that apply to multi-
employer plans pursuant to § 412. Section
431(c)(6)(B) specifies a minimum amount
for the full-funding limitation described in
§ 431(c)(6)(A), based on the plan’s cur-
rent liability. Section 431(c)(6)(E)(ii)(I)
provides that the interest rate used to calcu-
late current liability for this purpose must be
no more than 5 percent above and no more
than 10 percent below the weighted aver-
age of the rates of interest on 30-year Trea-
sury securities during the four-year period
ending on the last day before the beginning
of the plan year. Notice 88-73, 1988-2 C.B.
383, provides guidelines for determining
the weighted average interest rate. The rate
of interest on 30-year Treasury securities
for September 2022 is 3.55 percent. The
Service determined this rate as the average
of the daily determinations of yield on the
30-year Treasury bond maturing in August
2052. For plan years beginning in October
2022, the weighted average of the rates of
interest on 30-year Treasury securities and
the permissible range of rate used to calcu-
late current liability are as follows:
Treasury Weighted Average Rates
For Plan Years Beginning In30-Year Treasury Weighted AveragePermissible Range 90% to 105%
October 20222.272.04 to 2.38
3
Pursuant to this change, the 25-year averages of the first segment rate for 2021 and 2022 are increased to 5.00% because those 25-year averages as originally published are below 5.00%.
4
This election may be made either for all purposes for which the amendments under § 9706 of the ARP apply or solely for purposes of determining the adjusted funding target attainment
percentage under § 436 of the Code for the plan year.

Bulletin No. 2022–45 441 November 7, 2022
MINIMUM PRESENT VALUE
SEGMENT RATES
In general, the applicable interest rates
under § 417(e)(3)(D) are segment rates
computed without regard to a 24-month
average. Notice 2007-81 provides guide-
lines for determining the minimum
present value segment rates. Pursuant to
that notice, the minimum present value
segment rates determined for September
2022 are as follows:
Minimum Present Value Segment Rates
Month First Segment Second Segment Third Segment
September 2022 4.48 5.26 5.07
DRAFTING INFORMATION
The principal author of this notice is
Tom Morgan of the Office of Associate
Chief Counsel (Employee Benefits,
Exempt Organizations, and Employment
Taxes). However, other personnel from
the IRS participated in the development
of this guidance. For further information
regarding this notice, contact Mr. Morgan
at 202-317-6700 or Osmundo Bernabe at
626-927-1344 (not toll-free numbers).

November 7, 2022 442 Bulletin No. 2022–45
Table 2022-9
Monthly Yield Curve for September 2022
Derived from September 2022 Data
MaturityYieldMaturityYieldMaturityYieldMaturityYieldMaturityYield
0.53.8920.55.3040.55.0460.54.9680.54.92
1.04.1521.05.2941.05.0461.04.9681.04.92
1.54.3621.55.2741.55.0361.54.9681.54.92
2.04.5122.05.2642.05.0362.04.9682.04.92
2.54.5922.55.2542.55.0362.54.9682.54.92
3.04.6323.05.2443.05.0363.04.9683.04.92
3.54.6423.55.2243.55.0263.54.9683.54.92
4.04.6524.05.2144.05.0264.04.9584.04.92
4.54.6724.55.2044.55.0264.54.9584.54.92
5.04.7025.05.1945.05.0265.04.9585.04.92
5.54.7425.55.1845.55.0165.54.9585.54.92
6.04.7926.05.1746.05.0166.04.9586.04.92
6.54.8526.55.1746.55.0166.54.9586.54.92
7.04.9127.05.1647.05.0167.04.9587.04.91
7.54.9827.55.1547.55.0167.54.9587.54.91
8.05.0528.05.1548.05.0068.04.9588.04.91
8.55.1128.55.1448.55.0068.54.9488.54.91
9.05.1729.05.1349.05.0069.04.9489.04.91
9.55.2229.55.1349.55.0069.54.9489.54.91
10.05.2730.05.1250.05.0070.04.9490.04.91
10.55.3130.55.1250.54.9970.54.9490.54.91
11.05.3531.05.1151.04.9971.04.9491.04.91
11.55.3831.55.1151.54.9971.54.9491.54.91
12.05.4032.05.1052.04.9972.04.9492.04.91
12.55.4232.55.1052.54.9972.54.9492.54.91
13.05.4333.05.0953.04.9873.04.9493.04.91
13.55.4433.55.0953.54.9873.54.9393.54.91
14.05.4434.05.0854.04.9874.04.9394.04.91
14.55.4434.55.0854.54.9874.54.9394.54.91
15.05.4435.05.0855.04.9875.04.9395.04.91
15.55.4335.55.0755.54.9875.54.9395.54.91
16.05.4236.05.0756.04.9876.04.9396.04.90
16.55.4136.55.0756.54.9776.54.9396.54.90
17.05.4037.05.0657.04.9777.04.9397.04.90
17.55.3937.55.0657.54.9777.54.9397.54.90
18.05.3738.05.0658.04.9778.04.9398.04.90
18.55.3638.55.0558.54.9778.54.9398.54.90
19.05.3439.05.0559.04.9779.04.9399.04.90
19.55.3339.55.0559.54.9779.54.9399.54.90
20.05.3240.05.0460.04.9680.04.92100.04.90

Bulletin No. 2022–45 443 November 7, 2022
2023 Limitations Adjusted
as Provided in Section
415(d), etc.
Notice 2022-55
Section 415 of the Internal Revenue
Code (“Code”) provides for dollar limita-
tions on benefits and contributions under
qualified retirement plans. Section 415(d)
requires that the Secretary of the Treasury
annually adjust these limits for cost-of-liv-
ing increases. Other limitations applicable
to deferred compensation plans are also
affected by these adjustments under sec-
tion 415. Under section 415(d), the adjust-
ments are to be made under adjustment
procedures similar to those used to adjust
benefit amounts under section 215(i)(2)
(A) of the Social Security Act.
Cost-of-Living Adjusted Limits for
2023
Effective January 1, 2023, the limita-
tion on the annual benefit under a defined
benefit plan under section 415(b)(1)(A) of
the Code is increased from $245,000 to
$265,000.
For a participant who separated from
service before January 1, 2023, the par-
ticipant’s limitation under a defined ben-
efit plan under section 415(b)(1)(B) is
computed by multiplying the participant’s
compensation limitation, as adjusted
through 2022, by 1.0833.
The limitation for defined contribu-
tion plans under section 415(c)(1)(A)
is increased in 2023 from $61,000 to
$66,000.
The Code provides that various other
dollar amounts are to be adjusted at the
same time and in the same manner as the
dollar limitation of section 415(b)(1)(A).
After taking into account the applicable
rounding rules, the amounts for 2023 are
as follows:
The limitation under section 402(g)
(1) on the exclusion for elective defer-
rals described in section 402(g)(3) is
increased from $20,500 to $22,500.
The annual compensation limit under
sections 401(a)(17), 404(l), 408(k)(3)
(C), and 408(k)(6)(D)(ii) is increased
from $305,000 to $330,000.
The dollar limitation under section
416(i)(1)(A)(i) concerning the defini-
tion of “key employee” in a top-heavy
plan is increased from $200,000 to
$215,000.
The dollar amount under section 409(o)
(1)(C)(ii) for determining the maxi-
mum account balance in an employee
stock ownership plan subject to a
5-year distribution period is increased
from $1,230,000 to $1,330,000, while
the dollar amount used to determine
the lengthening of the 5-year distribu-
tion period is increased from $245,000
to $265,000.
The limitation used in the definition of
“highly compensated employee” under
section 414(q)(1)(B) is increased from
$135,000 to $150,000.
The dollar limitation under section
414(v)(2)(B)(i) for catch-up contribu-
tions to an applicable employer plan
other than a plan described in section
401(k)(11) or section 408(p) for indi-
viduals aged 50 or over is increased
from $6,500 to $7,500. The dollar lim-
itation under section 414(v)(2)(B)(ii)
for catch-up contributions to an appli-
cable employer plan described in sec-
tion 401(k)(11) or section 408(p) for
individuals aged 50 or over is increased
from $3,000 to $3,500.
The annual compensation limitation
under section 401(a)(17) for eligible
participants in certain governmental
plans that, under the plan as in effect
on July 1, 1993, allowed cost-of-liv-
ing adjustments to the compensa-
tion limitation under the plan under
section 401(a)(17) to be taken into
account, is increased from $450,000
to $490,000.
The compensation amount under sec-
tion 408(k)(2)(C) regarding simplified
employee pensions (SEPs) is increased
from $650 to $750.
The limitation under section 408(p)
(2)(E) regarding SIMPLE retirement
accounts is increased from $14,000 to
$15,500.
The limitation on the aggregate amount
of length of service awards accruing
with respect to any year of service
for any bona fide volunteer under
section 457(e)(11)(B)(ii) concerning
deferred compensation plans of state
and local governments and tax-exempt
organizations is increased from $6,500
to $7,000.
The limitation on deferrals under sec-
tion 457(e)(15) concerning deferred
compensation plans of state and local
governments and tax-exempt organi-
zations is increased from $20,500 to
$22,500.
The limitation under section 664(g)
(7) concerning the qualified gratuitous
transfer of qualified employer securi-
ties to an employee stock ownership
plan is increased from $55,000 to
$60,000.
The compensation amount under §
1.61-21(f)(5)(i) of the Income Tax
Regulations (“Regulations”) con-
cerning the definition of “control
employee” for fringe benefit valuation
purposes is increased from $120,000 to
$130,000. The compensation amount
under § 1.61-21(f)(5)(iii) is increased
from $245,000 to $265,000.
The dollar limitation on premiums paid
with respect to a qualifying longevity
annuity contract under § 1.401(a)(9)-
6, A-17(b)(2)(i) of the Regulations is
increased from $145,000 to $155,000.
The Code provides that the
$1,000,000,000 threshold used to deter-
mine whether a multiemployer plan is a
systemically important plan under sec-
tion 432(e)(9)(H)(v)(III)(aa) of the Code
is adjusted using the cost-of-living adjust-
ment provided under section 432(e)(9)(H)
(v)(III)(bb). After taking the applicable
rounding rule into account, the threshold
used to determine whether a multiem-
ployer plan is a systemically important
plan under section 432(e)(9)(H)(v)(III)
(aa) is increased from $1,220,000,000 to
$1,256,000,000.
The Code also provides that several
retirement-related amounts are to be
adjusted using the cost-of-living adjust-
ment under section 1(f)(3). After taking
the applicable rounding rules into account,
the amounts for 2023 are as follows:
The adjusted gross income limitation
under section 25B(b)(1)(A) for deter-
mining the retirement savings contri-
butions credit for married taxpayers
filing a joint return is increased from
$41,000 to $43,500; the limitation
under section 25B(b)(1)(B) is increased
from $44,000 to $47,500; and the lim-
itation under sections 25B(b)(1)(C)

November 7, 2022 444 Bulletin No. 2022–45
and 25B(b)(1)(D) is increased from
$68,000 to $73,000.
The adjusted gross income limitation
under section 25B(b)(1)(A) for deter-
mining the retirement savings contri-
butions credit for taxpayers filing as
head of household is increased from
$30,750 to $32,625; the limitation
under section 25B(b)(1)(B) is increased
from $33,000 to $35,625; and the lim-
itation under sections 25B(b)(1)(C)
and 25B(b)(1)(D) is increased from
$51,000 to $54,750.
The adjusted gross income limitation
under section 25B(b)(1)(A) for deter-
mining the retirement savings contri-
butions credit for all other taxpayers
is increased from $20,500 to $21,750;
the limitation under section 25B(b)
(1)(B) is increased from $22,000 to
$23,750; and the limitation under sec-
tions 25B(b)(1)(C) and 25B(b)(1)(D) is
increased from $34,000 to $36,500.
The deductible amount under sections
219(b)(5)(A) for an individual making
qualified retirement contributions is
increased from $6,000 to $6,500.
The applicable dollar amount under
section 219(g)(3)(B)(i) for determining
the deductible amount of an IRA con-
tribution for taxpayers who are active
participants filing a joint return or as a
qualifying widow(er) is increased from
$109,000 to $116,000. The applicable
dollar amount under section 219(g)(3)
(B)(ii) for all other taxpayers who are
active participants (other than married
taxpayers filing separate returns) is
increased from $68,000 to $73,000. If
an individual or the individual’s spouse
is an active participant, the applicable
dollar amount under section 219(g)
(3)(B)(iii) for a married individual fil-
ing a separate return is not subject to
an annual cost-of-living adjustment
and remains $0. The applicable dollar
amount under section 219(g)(7)(A) for
a taxpayer who is not an active partici-
pant but whose spouse is an active par-
ticipant is increased from $204,000 to
$218,000.
Accordingly, under section 219(g)(2)
(A), the deduction for taxpayers mak-
ing contributions to a traditional IRA
is phased out for single individuals and
heads of household who are active par-
ticipants in a qualified plan (or another
retirement plan specified in section
219(g)(5)) and have adjusted gross
incomes (as defined in section 219(g)
(3)(A)) between $73,000 and $83,000,
increased from between $68,000 and
$78,000. For married couples filing
jointly, if the spouse who makes the
IRA contribution is an active partic-
ipant, the income phase-out range
is between $116,000 and $136,000,
increased from between $109,000 and
$129,000. For an IRA contributor who
is not an active participant and is mar-
ried to someone who is an active partic-
ipant, the deduction is phased out if the
couple’s income is between $218,000
and $228,000, increased from between
$204,000 and $214,000. For a mar-
ried individual filing a separate return
who is an active participant, the phase-
out range is not subject to an annual
cost-of-living adjustment and remains
$0 to $10,000.
The adjusted gross income limitation
under section 408A(c)(3)(B)(ii)(I) for
determining the maximum Roth IRA
contribution for married taxpayers
filing a joint return or for taxpayers
filing as a qualifying widow(er) is
increased from $204,000 to $218,000.
The adjusted gross income limitation
under section 408A(c)(3)(B)(ii)(II) for
all other taxpayers (other than married
taxpayers filing separate returns) is
increased from $129,000 to $138,000.
The applicable dollar amount under
section 408A(c)(3)(B)(ii)(III) for a
married individual filing a separate
return is not subject to an annual cost-
of-living adjustment and remains $0.
Accordingly, under section 408A(c)(3)
(A), the adjusted gross income phase-
out range for taxpayers making con-
tributions to a Roth IRA is between
$218,000 and $228,000 for married
couples filing jointly, increased from
between $204,000 and $214,000. For
singles and heads of household, the
income phase-out range is between
$138,000 and $153,000, increased
from between $129,000 and $144,000.
For a married individual filing a sep-
arate return, the phase-out range is
not subject to an annual cost-of-living
adjustment and remains between $0
and $10,000.
Drafting Information
The principal author of this notice is
Tom Morgan of the Office of Associ-
ate Chief Counsel (Employee Benefits,
Exempt Organizations, and Employment
Taxes). However, other personnel from
the IRS participated in the development
of this guidance. For further information
regarding this notice, contact Mr. Morgan
at (202) 317-6700 or Greg Davis at (443)
853-5590 (not toll-free numbers).

Bulletin No. 2022–45 445 November 7, 2022
26 CFR 601.602: Tax forms and instructions.
(Also Part I, §§ 1, 23, 24, 32, 36B, 42, 45R, 55, 59, 62, 63, 125, 132(f),135, 137, 146, 147, 148, 152, 179, 179D,199A, 213, 220, 221, 448, 461, 512, 513, 642, 831,
877, 877A, 911, 1274A, 2010, 2032A, 2503, 2523, 4161, 4261, 6033, 6039F, 6323, 6334, 6601, 6651, 6652, 6695, 6698, 6699, 6721, 6722, 7345, 7430, 7702B, 9831;
1.148-5.)
Rev. Proc. 2022-38
TABLE OF CONTENTS
SECTION 1. PURPOSE ..................................................................................446
SECTION 2. CHANGES .................................................................................446
SECTION 3. 2023 ADJUSTED ITEMS .....................................................................446
Code Section
1
.01 Tax Rate Tables .........................................................................1(j)(2) (A)-(D)
.02 Unearned Income of Minor Children Subject to the “Kiddie Tax” ..........................................1(g)
.03 Maximum Capital Gains Rate ......................................................................1(h)
.04 Adoption Credit ...................................................................................23
.05 Child Tax Credit ..................................................................................24
.06 Earned Income Credit ..............................................................................32
.07 Refundable Credit for Coverage Under a Qualified Health Plan ....................................36B(f)(2)(B)
.08 Rehabilitation Expenditures Treated as Separate New Building. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42(e)
.09 Low-Income Housing Credit ......................................................................42(h)
.10 Employee Health Insurance Expense of Small Employers ................................................45R
.11 Exemption Amounts for Alternative Minimum Tax .......................................................55
.12 Alternative Minimum Tax Exemption for a Child Subject to the “Kiddie Tax” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59(j)
.13 Certain Expenses of Elementary and Secondary School Teachers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62(a)(2)(D)
.14 Transportation Mainline Pipeline Construction Industry Optional Expense Substantiation Rules for ..............62(c)
Payments to Employees Under Accountable Plans
.15 Standard Deduction ................................................................................63
.16 Cafeteria Plans ..................................................................................125
.17 Qualified Transportation Fringe Benefit .............................................................132(f)
.18 Income from United States Savings Bonds for Taxpayers Who Pay Qualified Higher Education Expenses ...........135
.19 Adoption Assistance Programs ......................................................................137
.20 Private Activity Bonds Volume Cap ...............................................................146(d)
.21 Loan Limits on Agricultural Bonds ..............................................................147(c)(2)
.22 General Arbitrage Rebate Rules ...................................................................148(f)
.23 Safe Harbor Rules for Broker Commissions on Guaranteed Investment Contracts or Investments .................148
Purchased for a Yield Restricted Defeasance Escrow
.24 Gross Income Limitation for a Qualifying Relative ..............................................152(d)(1)(B)
.25 Election to Expense Certain Depreciable Assets .........................................................179
.26 Energy Efficient Commercial Buildings Deduction ....................................................179D
.27 Qualified Business Income .......................................................................199A
.28 Eligible Long-Term Care Premiums ............................................................213(d)(10)
.29 Medical Savings Accounts .........................................................................220
.30 Interest on Education Loans ........................................................................221
.31 Limitation on Use of Cash Method of Accounting ......................................................448
.32 Threshold for Excess Business Loss ...............................................................461(l)
.33 Treatment of Dues Paid to Agricultural or Horticultural Organizations ....................................512(d)
.34 Insubstantial Benefit Limitations for Contributions Associated With Charitable Fund-Raising Campaigns ........513(h)
.35 Special Rules for Credits and Deductions ..............................................................642
.36 Tax on Insurance Companies Other than Life Insurance Companies .........................................831
.37 Expatriation to Avoid Tax ..........................................................................877
1
All references to “Code” are to the Internal Revenue Code of 1986 and, unless otherwise specified, all “section” or “§” references are to provisions of the Code.

November 7, 2022 446 Bulletin No. 2022–45
.38 Tax Responsibilities of Expatriation ................................................................877A
.39 Foreign Earned Income Exclusion ...................................................................911
.40 Debt Instruments Arising Out of Sales or Exchanges ..................................................1274A
.41 Unified Credit Against Estate Tax ...................................................................2010
.42 Valuation of Qualified Real Property in Decedent’s Gross Estate ........................................2032A
.43 Annual Exclusion for Gifts ...................................................................2503; 2523
.44 Tax on Arrow Shafts .............................................................................4161
.45 Passenger Air Transportation Excise Tax .............................................................4261
.46 Reporting Exception for Certain Exempt Organizations with Nondeductible Lobbying Expenditures .........6033(e)(3)
.47 Notice of Large Gifts Received from Foreign Persons ..................................................6039F
.48 Persons Against Whom a Federal Tax Lien Is Not Valid .................................................6323
.49 Property Exempt from Levy ....................................................................6334(a)
.50 Exempt Amount of Wages, Salary, or Other Income .................................................6334(d)
.51 Interest on a Certain Portion of the Estate Tax Payable in Installments ....................................6601(j)
.52 Failure to File Tax Return .........................................................................6651
.53 Failure to File Certain Information Returns, Registration Statements, etc. ...................................6652
.54 Other Assessable Penalties With Respect to the Preparation of Tax Returns for Other Persons ...................6695
.55 Failure to File Partnership Return ...................................................................6698
.56 Failure to File S Corporation Return .................................................................6699
.57 Failure to File Correct Information Returns ...........................................................6721
.58 Failure to Furnish Correct Payee Statements ..........................................................6722
.59 Revocation or Denial of Passport in Case of Certain Tax Delinquencies .....................................7345
.60 Attorney Fee Awards .............................................................................7430
.61 Periodic Payments Received Under Qualified Long-Term Care Insurance Contracts or ....................7702B(d)
Under Certain Life Insurance Contracts
.62 Qualified Small Employer Health Reimbursement Arrangement ...........................................9831
SECTION 4. EFFECTIVE DATE ..........................................................................456
SECTION 5. DRAFTING INFORMATION .................................................................456
SECTION 1. PURPOSE
This revenue procedure sets forth infla-
tion-adjusted items for 2023 for various
Code provisions as in effect on October
18, 2022. The inflation adjusted items for
the Code sections set forth in section 3 of
this revenue procedure are generally deter-
mined by reference to § 1(f) of the Code.
To the extent amendments to the Code are
enacted for 2023 after October 18, 2022,
taxpayers should consult additional guid-
ance to determine whether these adjust-
ments remain applicable for 2023.
SECTION 2. CHANGES
.01 For taxable years beginning after
December 31, 2022, § 13303(a)(1) of
Public Law 117-169, 136 Stat. 1818
(August 16, 2022), commonly known
as the Inflation Reduction Act of 2022
(IRA), modifies the maximum amount of
the energy efficient commercial buildings
deduction under § 179D.
(1) For taxable years beginning in
2023, the applicable dollar value used
to determine the maximum allowance of
the deduction under § 179D(b) is $0.50
increased (but not above $1.00) by $0.02
for each percentage point by which the
total annual energy and power costs for
the building are certified to be reduced by
a percentage greater than 25 percent.
(2) For taxable years beginning in 2023,
the applicable dollar value used to deter-
mine the increased deduction amount for
certain property under § 179D(b)(3)(A) is
$2.50 increased (but not above $5.00) by
$0.10 for each percentage point by which
the total annual energy and power costs
for the building are certified to be reduced
by a percentage greater than 25 percent.
.02 The amounts set forth in section
2.01 of this revenue procedure are adjusted
for inflation for taxable years beginning in
2023.
SECTION 3. 2023 ADJUSTED ITEMS
.01 Tax Rate Tables. For taxable years
beginning in 2023, the tax rate tables
under § 1 are as follows:

Bulletin No. 2022–45 447 November 7, 2022
TABLE 1 - Section 1(j)(2)(A) - Married Individuals Filing Joint Returns and Surviving Spouses
If Taxable Income Is: The Tax Is:
Not over $22,000 10% of the taxable income
Over $22,000 but $2,200 plus 12% of
not over $89,450 the excess over $22,000
Over $89,450 but $10,294 plus 22% of
not over $190,750 the excess over $89,450
Over $190,750 but $32,580 plus 24% of
not over $364,200 the excess over $190,750
Over $364,200 but $74,208 plus 32% of
not over $462,500 the excess over $364,200
Over $462,500 but $105,664 plus 35% of
not over $693,750 the excess over $462,500
Over $693,750 $186,601.50 plus 37% of
the excess over $693,750

TABLE 2 - Section 1(j)(2)(B) – Heads of Households
If Taxable Income Is: The Tax Is:
Not over $15,700 10% of the taxable income
Over $15,700 but $1,570 plus 12% of
not over $59,850 the excess over $15,700
Over $59,850 but $6,868 plus 22% of
not over $95,350 the excess over $59,850
Over $95,350 but $14,678 plus 24% of
not over $182,100 the excess over $95,350
Over $182,100 but $35,498 plus 32% of
not over $231,250 the excess over $182,100
Over $231,250 but $51,226 plus 35% of
not over $578,100 the excess over $231,250
Over $578,100 $172,623.50 plus 37% of
the excess over $578,100

November 7, 2022 448 Bulletin No. 2022–45
TABLE 3 - Section 1(j)(2)(C) – Unmarried Individuals (other than Surviving Spouses and Heads of Households)
If Taxable Income Is: The Tax Is:
Not over $11,000 10% of the taxable income
Over $11,000 but $1,100 plus 12% of
not over $44,725 the excess over $11,000
Over $44,725 but $5,147 plus 22% of
not over $95,375 the excess over $44,725
Over $95,375 but $16,290 plus 24% of
not over $182,100 the excess over $95,375
Over $182,100 but $37,104 plus 32% of
not over $231,250 the excess over $182,100
Over $231,250 but $52,832 plus 35% of
not over $578,125 the excess over $231,250
Over $578,125 $174,238.25 plus 37% of
the excess over $578,125
TABLE 4 - Section 1(j)(2)(D) – Married Individuals Filing Separate Returns
If Taxable Income Is: The Tax Is:
Not over $11,000 10% of the taxable income
Over $11,000 but $1,100 plus 12% of
not over $44,725 the excess over $11,000
Over $44,725 but $5,147 plus 22% of
not over $95,375 the excess over $44,725
Over $95,375 but $16,290 plus 24% of
not over $182,100 the excess over $95,375
Over $182,100 but $37,104 plus 32% of
not over $231,250 the excess over $182,100
Over $231,250 but $52,832 plus 35% of
not over $346,875 the excess over $231,250
Over $346,875 $93,300.75 plus 37% of
the excess over $346,875

Bulletin No. 2022–45 449 November 7, 2022
TABLE 5 - Section 1(j)(2)(E) – Estates and Trusts
If Taxable Income Is: The Tax Is:
Not over $2,900 10% of the taxable income
Over $2,900 but $290 plus 24% of
not over $10,550 the excess over $2,900
Over $10,550 but $2,126 plus 35% of
not over $14,450 the excess over $10,550
Over $14,450 $3,491 plus 37% of
the excess over $14,450
.02 Unearned Income of Minor Chil-
dren Subject to the “Kiddie Tax”. For tax-
able years beginning in 2023, the amount
in § 1(g)(4)(A)(ii)(I), which is used to
reduce the net unearned income reported
on the child’s return that is subject to
the “kiddie tax,” is $1,250. This $1,250
amount is the same as the amount provided
in § 63(c)(5)(A), as adjusted for inflation.
The same $1,250 amount is used for pur-
poses of § 1(g)(7) to determine whether a
parent may elect to include a child’s gross
income in the parent’s gross income and
to calculate the “kiddie tax.” For example,
one of the requirements for the parental
election is that a child’s gross income is
more than the amount referenced in § 1(g)
(4)(A)(ii)(I) but less than 10 times that
amount; thus, a child’s gross income for
2023 must be more than $1,250 but less
than $12,500.
.03 Maximum Capital Gains Rate
(§1(h), §1(j)(5)). For taxable years
beginning in 2023, the maximum zero
rate amounts and maximum 15 percent
rate amounts under § 1(j)(5)(B) are as
follows:
Filing StatusMaximum Zero
Rate Amount
Maximum15%
Rate Amount
Married Individuals Filing Joint Returns and Surviving Spouse$89,250$553,850
Married Individuals Filing Separate Returns$44,625$276,900
Heads of Household$59,750$523,050
All Other Individuals$44,625$492,300
Estates and Trusts$3,000$14,650
.04 Adoption Credit. For taxable years
beginning in 2023, under § 23(a)(3) the
credit allowed for an adoption of a child
with special needs is $15,950. For taxable
years beginning in 2023, under § 23(b)
(1) the maximum credit allowed for other
adoptions is the amount of qualified adop-
tion expenses up to $15,950. The avail-
able adoption credit begins to phase out
under § 23(b)(2)(A) for taxpayers with
modified adjusted gross income in excess
of $239,230 and is completely phased out
for taxpayers with modified adjusted gross
income of $279,230 or more. See section
3.19 of this revenue procedure for the
adjusted items relating to adoption assis-
tance programs.
.05 Child Tax Credit. For taxable years
beginning in 2023, the amount used in
§ 24(d)(1)(A) to determine the amount of
credit under § 24 that may be refundable
is $1,600.
.06 Earned Income Credit.
(1) In general. For taxable years begin-
ning in 2023, the following amounts are
used to determine the earned income
credit under § 32(b). The “earned income
amount” is the amount of earned income
at or above which the maximum amount
of the earned income credit is allowed.
The “threshold phaseout amount” is the
amount of adjusted gross income (or, if
greater, earned income) above which the
maximum amount of the credit begins
to phase out. The “completed phaseout
amount” is the amount of adjusted gross
income (or, if greater, earned income) at
or above which no credit is allowed. The
threshold phaseout amounts and the com-
pleted phaseout amounts shown in the
table below for married taxpayers filing a
joint return include the increase provided
in § 32(b)(2)(B), as adjusted for inflation
for taxable years beginning in 2023. The
threshold phaseout amounts and the com-
pleted phaseout amounts shown in the
table below for single, surviving spouse,
or head of household taxpayers also apply
to married taxpayers who are not filing a
joint return and satisfy the special rules for
separated spouses in § 32(d).

November 7, 2022 450 Bulletin No. 2022–45
Number of Qualifying Children
ItemOneTwo Three or MoreNone
Earned Income Amount$11,750$16,510$16,510$7,840
Maximum Amount of Credit$3,995$6,604$7,430$600
Threshold Phaseout Amount (Single, Surviving Spouse, or
Head of Household)
$21,560$21,560$21,560$9,800
Completed Phaseout Amount (Single, Surviving Spouse, or
Head of Household)
$46,560$52,918$56,838$17,640
Threshold Phaseout Amount (Married Filing Jointly)$28,120$28,120$28,120$16,370
Completed Phaseout Amount (Married Filing Jointly)$53,120$59,478$63,398$24,210
The instructions for the Form 1040
series provide tables showing the amount
of the earned income credit for each type
of taxpayer.
(2) Excessive Investment Income.
For taxable years beginning in 2023, the
earned income tax credit is not allowed
under § 32(i) if the aggregate amount
of certain investment income exceeds
$11,000.
.07 Refundable Credit for Cover-
age Under a Qualified Health Plan.
For taxable years beginning in 2023,
the limitation on tax imposed under
§ 36B(f)(2)(B) for excess advance
credit payments is determined using the
following table:
If the household income The limitation amount for The limitation amount for
(expressed as a percent unmarried individuals all other taxpayers is:
of poverty line) is: (other than surviving
spouses and heads of
household) is:
Less than 200% $350 $700
At least 200% but less than 300% $900 $1,800
At least 300% but less than 400% $1,500 $3,000
.08 Rehabilitation Expenditures
Treated as Separate New Building. For
calendar year 2023, the per low-income
unit qualified basis amount under § 42(e)
(3)(A)(ii)(II) is $7,900.
.09 Low-Income Housing Credit. For
calendar year 2023, the amount used under
§ 42(h)(3)(C)(ii) to calculate the State hous-
ing credit ceiling for the low-income housing
credit is the greater of (1) $2.75 multiplied
by the State population, or (2) $3,185,000.
.10 Employee Health Insurance
Expense of Small Employers. For taxable
years beginning in 2023, the dollar amount
in effect under § 45R(d)(3)(B) is $30,700.
This amount is used under § 45R(c) for
limiting the small employer health insur-
ance credit and under § 45R(d)(1)(B)
for determining who is an eligible small
employer for purposes of the credit.
.11 Exemption Amounts for Alternative
Minimum Tax. For taxable years begin-
ning in 2023, the exemption amounts
under § 55(d)(1) are:
Joint Returns or Surviving Spouses$126,500
Unmarried Individuals (other than Surviving Spouses)$81,300
Married Individuals Filing Separate Returns$63,250
Estates and Trusts$28,400
For taxable years beginning in 2023,
under § 55(b)(1), the excess taxable
income above which the 28 percent tax
rate applies is:
Married Individuals Filing Separate Returns$110,350
All Other Taxpayers$220,700

Bulletin No. 2022–45 451 November 7, 2022
For taxable years beginning in 2023,
the amounts used under § 55(d)(2) to
determine the phaseout of the exemption
amounts are:
Threshold Phaseout amountComplete Phaseout amount
Joint Returns or Surviving Spouses$1,156,300$1,662,300
Unmarried Individuals (other than Surviving Spouses)$578,150$903,350
Married Individuals Filing Separate Returns $578,150$831,150
Estates and Trusts$94,600$208,200
.12 Alternative Minimum Tax Exemption
for a Child Subject to the “Kiddie Tax.” For
taxable years beginning in 2023, for a child
to whom the § 1(g) “kiddie tax” applies,
the exemption amount under §§ 55(d) and
59(j) for purposes of the alternative mini-
mum tax under § 55 may not exceed the
sum of (1) the child’s earned income for the
taxable year, plus (2) $8,800.
.13 Certain Expenses of Elementary
and Secondary School Teachers. For
taxable years beginning in 2023, under
§ 62(a)(2)(D) the amount of the deduc-
tion allowed under § 162 that consists of
expenses paid or incurred by an eligible
educator in connection with books, sup-
plies (other than nonathletic supplies for
courses of instruction in health or phys-
ical education), computer equipment
(including related software and services)
and other equipment, and supplementary
materials used by the eligible educator in
the classroom is $300.
.14 Transportation Mainline Pipeline
Construction Industry Optional Expense
Substantiation Rules for Payments to
Employees Under Accountable Plans. For
calendar year 2023, an eligible employer
may pay certain welders and heavy equip-
ment mechanics an amount up to $20
per hour for rig-related expenses that are
deemed substantiated under an account-
able plan if paid in accordance with Rev.
Proc. 2002-41, 2002-1 C.B. 1098. If the
employer provides fuel or otherwise reim-
burses fuel expenses, an amount up to $13
per hour is deemed substantiated if paid
under Rev. Proc. 2002-41.
.15 Standard Deduction.
(1) In general. For taxable years begin-
ning in 2023, the standard deduction
amounts under § 63(c)(2) are as follows:
Filing StatusStandard Deduction
Married Individuals Filing Joint Returns and Surviving Spouses (§ 1(j)(2)(A))$27,700
Heads of Households (§ 1(j)(2)(B))$20,800
Unmarried Individuals (other than Surviving Spouses and Heads of Households) (§ 1(j)(2)(C))$13,850
Married Individuals Filing Separate Returns (§ 1(j)(2)(D))$13,850
(2) Dependent. For taxable years
beginning in 2023, the standard deduc-
tion amount under § 63(c)(5) for an indi-
vidual who may be claimed as a depen-
dent by another taxpayer cannot exceed
the greater of (1) $1,250, or (2) the sum
of $400 and the individual’s earned
income.
(3) Aged or blind. For taxable years
beginning in 2023, the additional standard
deduction amount under § 63(f) for the
aged or the blind is $1,500. The additional
standard deduction amount is increased to
$1,850 if the individual is also unmarried
and not a surviving spouse.
.16 Cafeteria Plans. For taxable years
beginning in 2023, the dollar limitation
under § 125(i) on voluntary employee sal-
ary reductions for contributions to health
flexible spending arrangements is $3,050.
If the cafeteria plan permits the carryover
of unused amounts, the maximum carry-
over amount is $610.
.17 Qualified Transportation Fringe
Benefit. For taxable years beginning in
2023, the monthly limitation under §
132(f)(2)(A) regarding the aggregate
fringe benefit exclusion amount for trans-
portation in a commuter highway vehicle
and any transit pass is $300. The monthly
limitation under § 132(f)(2)(B) regarding
the fringe benefit exclusion amount for
qualified parking is $300.
.18 Income from United States Savings
Bonds for Taxpayers Who Pay Qualified
Higher Education Expenses. For tax-
able years beginning in 2023, the exclu-
sion under § 135, regarding income from
United States savings bonds for taxpay-
ers who pay qualified higher education
expenses, begins to phase out for modified
adjusted gross income above $137,800
for joint returns and $91,850 for all other
returns. The exclusion is completely
phased out for modified adjusted gross
income of $167,800 or more for joint
returns and $106,850 or more for all other
returns.
.19 Adoption Assistance Programs.
For taxable years beginning in 2023,
under § 137(a)(2), the amount that can
be excluded from an employee’s gross
income for the adoption of a child with
special needs is $15,950. For taxable years
beginning in 2023, under § 137(b)(1) the
maximum amount that can be excluded
from an employee’s gross income for the
amounts paid or expenses incurred by an
employer for qualified adoption expenses
furnished pursuant to an adoption assis-
tance program for adoptions by the
employee is $15,950. The amount exclud-
able from an employee’s gross income

November 7, 2022 452 Bulletin No. 2022–45
begins to phase out under § 137(b)(2)
(A) for taxpayers with modified adjusted
gross income in excess of $239,230 and
is completely phased out for taxpayers
with modified adjusted gross income of
$279,230 or more. (See section 3.04 of
this revenue procedure for the adjusted
items relating to the adoption credit.)
.20 Private Activity Bonds Volume
Cap. For calendar year 2023, the amounts
used under § 146(d) to calculate the State
ceiling for the volume cap for private
activity bonds is the greater of (1) $120
multiplied by the State population, or (2)
$358,845,000.
.21 Loan Limits on Agricultural
Bonds. For calendar year 2023, the loan
limit amount on agricultural bonds under
§ 147(c)(2)(A) for first-time farmers is
$616,100.
.22 General Arbitrage Rebate Rules.
For bond years ending in 2023, the amount
of the computation credit determined
under § 1.148-3(d)(4) of the Income Tax
Regulations is $1,960.
.23 Safe Harbor Rules for Broker
Commissions on Guaranteed Investment
Contracts or Investments Purchased for a
Yield Restricted Defeasance Escrow. For
calendar year 2023, under § 1.148-5(e)
(2)(iii)(B)(1), a broker’s commission or
similar fee for the acquisition of a guar-
anteed investment contract or investments
purchased for a yield restricted defeasance
escrow is reasonable if (1) the amount of
the fee that the issuer treats as a qualified
administrative cost does not exceed the
lesser of (A) $46,000, and (B) 0.2 percent
of the computational base (as defined in
§ 1.148-5(e)(2)(iii)(B)(2)) or, if more,
$5,000; and (2) for any issue, the issuer
does not treat more than $130,000 in bro-
kers’ commissions or similar fees as quali-
fied administrative costs for all guaranteed
investment contracts and investments for
yield restricted defeasance escrows pur-
chased with gross proceeds of the issue.
.24 Gross Income Limitation for a
Qualifying Relative. For taxable years
beginning in 2023, the exemption amount
referenced in § 152(d)(1)(B) is $4,700.
.25 Election to Expense Certain Depre-
ciable Assets. For taxable years beginning
in 2023, under § 179(b)(1), the aggregate
cost of any § 179 property that a taxpayer
elects to treat as an expense cannot exceed
$1,160,000 and under § 179(b)(5)(A), the
cost of any sport utility vehicle that may
be taken into account under § 179 can-
not exceed $28,900. Under § 179(b)(2),
the $1,160,000 limitation under § 179(b)
(1) is reduced (but not below zero) by the
amount by which the cost of § 179 prop-
erty placed in service during the 2023 tax-
able year exceeds $2,890,000.
.26 Energy Efficient Commercial
Building Deduction. For taxable years
beginning in 2023, the applicable dol-
lar value used to determine the maxi-
mum allowance of the deduction under
§ 179D(b)(2) is $0.54 increased (but
not above $1.07) by $0.02 for each per-
centage point by which the total annual
energy and power costs for the building
are certified to be reduced by a percent-
age greater than 25 percent. For taxable
years beginning in 2023, the applica-
ble dollar value used to determine the
increased deduction amount for certain
property under § 179D(b)(3) is $2.68
increased (but not above $5.36) by $0.11
for each percentage point by which the
total annual energy and power costs for
the building are certified to be reduced by
a percentage greater than 25 percent.
.27 Qualified Business Income. For tax-
able years beginning in 2023, the threshold
amounts under § 199A(e)(2) and phase-in
range amounts under § 199A(b)(3)(B) and
§ 199A(d)(3)(A) are:
Filing StatusThreshold amountPhase-in range amount
Married Individuals Filing Joint Returns$364,200$464,200
Married Individuals Filing Separate Returns$182,100$232,100
All Other Returns$182,100$232,100
.28 Eligible Long-Term Care Premi-
ums. For taxable years beginning in 2023,
the limitations under § 213(d)(10), regard-
ing eligible long-term care premiums
includible in the term “medical care,” are
as follows:
Attained Age Before the Close of the Taxable YearLimitation on Premiums
40 or less$480
More than 40 but not more than 50$890
More than 50 but not more than 60$1,790
More than 60 but not more than 70$4,770
More than 70$5,960
.29 Medical Savings Accounts.
(1) Self-only coverage. For taxable
years beginning in 2023, the term “high
deductible health plan” as defined in
§ 220(c)(2)(A) means, for self-only cov-
erage, a health plan that has an annual
deductible that is not less than $2,650 and
not more than $3,950, and under which the
annual out-of-pocket expenses required to
be paid (other than for premiums) for cov-
ered benefits do not exceed $5,300.
(2) Family coverage. For taxable
years beginning in 2023, the term “high
deductible health plan” means, for family
coverage, a health plan that has an annual
deductible that is not less than $5,300
and not more than $7,900, and under
which the annual out-of-pocket expenses
required to be paid (other than for premi-
ums) for covered benefits do not exceed
$9,650.

Bulletin No. 2022–45 453 November 7, 2022
.30 Interest on Education Loans. For
taxable years beginning in 2023, the $2,500
maximum deduction for interest paid on
qualified education loans under § 221
begins to phase out under § 221(b)(2)(B)
for taxpayers with modified adjusted gross
income in excess of $75,000 ($155,000 for
joint returns), and is completely phased out
for taxpayers with modified adjusted gross
income of $90,000 or more ($185,000 or
more for joint returns).
.31 Limitation on Use of Cash Method
of Accounting. For taxable years begin-
ning in 2023, a corporation or partnership
meets the gross receipts test of § 448(c)
for any taxable year if the average annual
gross receipts of such entity for the 3-tax-
able-year period ending with the taxable
year which precedes such taxable year
does not exceed $29,000,000.
.32 Threshold for Excess Business Loss.
For taxable years beginning in 2023, in
determining a taxpayer’s excess business
loss, the amount under § 461(l)(3)(A)(ii)
(II) is $289,000 ($578,000 for joint returns).
.33 Treatment of Dues Paid to Agri-
cultural or Horticultural Organizations.
For taxable years beginning in 2023, the
limitation under § 512(d)(1), regarding
the exemption of annual dues required to
be paid by a member to an agricultural or
horticultural organization, is $191.
.34 Insubstantial Benefit Limitations
for Contributions Associated with Chari-
table Fund-Raising Campaigns.
(1) Low cost article. For taxable years
beginning in 2023, for purposes of defin-
ing the term “unrelated trade or business”
for certain exempt organizations under
§ 513(h)(2), “low cost articles” are articles
costing $12.50 or less.
(2) Other insubstantial benefits. For
taxable years beginning in 2023, under
§ 170, the $5, $25, and $50 guidelines in
section 3 of Rev. Proc. 90-12, 1990-1 C.B.
471 (as amplified by Rev. Proc. 92-49,
1992-1 C.B. 987, and modified by Rev.
Proc. 92-102, 1992-2 C.B. 579), for the
value of insubstantial benefits that may be
received by a donor in return for a con-
tribution, without causing the contribution
to fail to be fully deductible, are $12.50,
$62.50 and $125, respectively.
.35 Special Rules for Credits and
Deductions. For taxable years beginning
in 2023, the amount of the deduction
under § 642(b)(2)(C)(i) is $4,700.
.36 Tax on Insurance Companies Other
than Life Insurance Companies. For taxable
years beginning in 2023, under § 831(b)(2)
(A)(i) the amount of the limit on net writ-
ten premiums or direct written premiums
(whichever is greater) is $2,650,000 to
elect the alternative tax for certain small
companies under § 831(b)(1) to be taxed
only on taxable investment income.
.37 Expatriation to Avoid Tax. For cal-
endar year 2023, under § 877A(g)(1)(A),
unless an exception under § 877A(g)(1)(B)
applies, an individual is a covered expatri-
ate if the individual’s “average annual net
income tax” under § 877(a)(2)(A) for the
five taxable years ending before the expa-
triation date is more than $190,000.
.38 Tax Responsibilities of Expatria-
tion. For taxable years beginning in 2023,
the amount that would be includible in
the gross income of a covered expatriate
by reason of § 877A(a)(1) is reduced (but
not below zero) by $821,000 pursuant to §
877A(a)(3).
.39 Foreign Earned Income Exclusion.
For taxable years beginning in 2023, the
foreign earned income exclusion amount
under § 911(b)(2)(D)(i) is $120,000.
.40 Debt Instruments Arising Out of
Sales or Exchanges. For calendar year
2023, a qualified debt instrument under §
1274A(b) has stated principal that does not
exceed $6,734,800, and a cash method debt
instrument under § 1274A(c)(2) has stated
principal that does not exceed $4,810,600.
.41 Unified Credit Against Estate Tax.
For an estate of any decedent dying in
calendar year 2023, the basic exclusion
amount is $12,920,000 for determining
the amount of the unified credit against
estate tax under § 2010.
.42 Valuation of Qualified Real Prop-
erty in Decedent’s Gross Estate. For an
estate of a decedent dying in calendar
year 2023, if the executor elects to use
the special use valuation method under
§ 2032A for qualified real property, the
aggregate decrease in the value of quali-
fied real property resulting from electing
to use § 2032A for purposes of the estate
tax cannot exceed $1,310,000.
.43 Annual Exclusion for Gifts.
(1) For calendar year 2023, the first
$17,000 of gifts to any person (other than
gifts of future interests in property) are
not included in the total amount of taxable
gifts under § 2503 made during that year.
(2) For calendar year 2023, the first
$175,000 of gifts to a spouse who is not
a citizen of the United States (other than
gifts of future interests in property) are
not included in the total amount of taxable
gifts under §§ 2503 and 2523(i)(2) made
during that year.
.44 Tax on Arrow Shafts. For calen-
dar year 2023, the tax imposed under
§ 4161(b)(2)(A) on the first sale by the
manufacturer, producer, or importer of
any shaft of a type used in the manufac-
ture of certain arrows is $0.59 per shaft.
.45 Passenger Air Transportation
Excise Tax. For calendar year 2023, the
tax under § 4261(b)(1) on the amount paid
for each domestic segment of taxable air
transportation is $4.80. For calendar year
2023, the tax under § 4261(c)(1) on any
amount paid (whether within or without
the United States) for any international air
transportation, if the transportation begins
or ends in the United States, generally is
$21.10. Under § 4261(c)(3), however, a
lower rate of tax applies under § 4261(c)
(1) to a domestic segment beginning or
ending in Alaska or Hawaii, and the tax
applies only to departures. For calendar
year 2023, the rate of tax is $10.60.
.46 Reporting Exception for Certain
Exempt Organizations with Nondeductible
Lobbying Expenditures. For taxable years
beginning in 2023, the annual per person,
family, or entity dues limitation to qualify
for the reporting exception under § 6033(e)
(3) (and section 5.05 of Rev. Proc. 98-19,
1998-1 C.B. 547), regarding certain exempt
organizations with nondeductible lobbying
expenditures, is $132 or less.
.47 Notice of Large Gifts Received
from Foreign Persons. For taxable years
beginning in 2023, § 6039F authorizes the
Secretary of the Treasury or her delegate
to require recipients of gifts from certain
foreign persons to report these gifts if the
aggregate value of gifts received in the
taxable year exceeds $18,567.
.48 Persons Against Whom a Federal
Tax Lien Is Not Valid. For calendar year
2023, a federal tax lien is not valid against
(1) certain purchasers under § 6323(b)
(4) who purchased personal property in
a casual sale for less than $1,810, or (2)
a mechanic’s lien or under § 6323(b)(7)
who repaired or improved certain residen-
tial property if the contract price with the
owner is not more than $9,030.

November 7, 2022 454 Bulletin No. 2022–45
.49 Property Exempt from Levy. For
calendar year 2023, the value of property
exempt from levy under § 6334(a)(2) (fuel,
provisions, furniture, and other household
personal effects, as well as arms for per-
sonal use, livestock, and poultry) cannot
exceed $10,810. The value of property
exempt from levy under § 6334(a)(3)
(books and tools necessary for the trade,
business, or profession of the taxpayer)
cannot exceed $5,400.
.50 Exempt Amount of Wages, Salary,
or Other Income. For taxable years begin-
ning in 2023, the dollar amount used to
calculate the amount determined under
§ 6334(d)(4)(B) is $4,700.
.51 Interest on a Certain Portion of the
Estate Tax Payable in Installments. For an
estate of a decedent dying in calendar year
2023, the dollar amount used to determine the
“2-percent portion” (for purposes of calculat-
ing interest under § 6601(j)) of the estate tax
extended as provided in § 6166 is $1,750,000.
.52 Failure to File Tax Return. In the
case of any return required to be filed
in 2024, the amount of the addition to
tax under § 6651(a) for failure to file
an income tax return within 60 days of
the due date of such return (determined
with regard to any extensions of time
for filing) will not be less than the lesser
of $485 or 100 percent of the amount
required to be shown as tax on such
return.
.53 Failure to File Certain Information
Returns, Registration Statements, etc. For
returns required to be filed in 2024, the
penalty amounts under § 6652(c) are:
(1) for failure to file a return required
under § 6033(a)(1) (relating to returns by
exempt organization) or § 6012(a)(6) (relat-
ing to returns by political organizations):
ScenarioDaily Penalty Maximum Penalty
Organization (§ 6652(c)(1)(A))$20Lesser of $12,000 or 5%
of gross receipts of the
organization for the year.
Organization with gross receipts exceeding $1,208,500 (§ 6652(c)(1)(A))$120$60,000
Managers (§ 6652(c)(1)(B))$10$6,000
Public inspection of annual returns and reports (§ 6652(c)(1)(C))$20$12,000
Public inspection of applications for exemption and notice of status (§ 6652(c)(1)(D))$20No Limit
(2) for failure to file a return required
under § 6034 (relating to returns by
certain trust) or § 6043(b) (relating to ter-
minations, etc., of exempt organizations):
ScenarioDaily Penalty Maximum Penalty
Organization or trust (§ 6652(c)(2)(A))$10$6,000
Managers (§ 6652(c)(2)(B))$10$6,000
Split-Interest Trust (§ 6652(c)(2)(C)(ii))$20$12,000
Any trust with gross income exceeding $302,000 (§ 6652(c)(2)(C)(ii))$120$60,000
(3) for failure to file a disclosure required under § 6033(a)(2):
ScenarioDaily Penalty Maximum Penalty
Tax–exempt entity (§ 6652(c)(3)(A))$120$60,000
Failure to comply with written demand (§ 6652(c)(3)(B)(ii))$120$12,000
.54 Other Assessable Penalties With
Respect to the Preparation of Tax Returns
for Other Persons. In the case of any fail-
ure relating to a return or claim for refund
filed in 2024, the penalty amounts under
§ 6695 are:
ScenarioPer Return or Claim for RefundMaximum Penalty
Failure to furnish copy to taxpayer (§ 6695(a))$60$30,000
Failure to sign return (§ 6695(b))$60$30,000
Failure to furnish identifying number (§ 6695(c))$60$30,000
Failure to retain copy or list (§ 6695(d))$60$30,000
Failure to file correct information returns (§ 6695(e))$60 per return and item in return$30,000
Negotiation of check (§ 6695(f))$600 per checkNo limit
Failure to be diligent in determining eligibility for head of
household filing status, child tax credit, American Opportunity
tax credit, and earned income credit (§ 6695(g))
$600 per failureNo limit

Bulletin No. 2022–45 455 November 7, 2022
.55 Failure to File Partnership Return.
In the case of any return required to be
filed in 2024, the dollar amount used to
determine the amount of the penalty under
§ 6698(b)(1) is $235.
.56 Failure to File S Corporation
Return. In the case of any return required
to be filed in 2024, the dollar amount used
to determine the amount of the penalty
under § 6699(b)(1) is $235.
.57 Failure to File Correct Information
Returns. In the case of any failure relating
to a return required to be filed in 2024, the
penalty amounts under § 6721 are:
(1) for persons with average annual
gross receipts for the most recent three
taxable years of more than $5,000,000,
for failure to file correct information
returns:
ScenarioPenalty Per Return Calendar Year Maximum
General Rule (§ 6721(a)(1))$310$3,783,000
Corrected on or before 30 days after required filing date (§ 6721(b)(1))$60$630,500
Corrected after 30
th
day but on or before August 1, 2024 (§ 6721(b)(2))$120$1,891,500
(2) for persons with average annual
gross receipts for the most recent three
taxable years of $5,000,000 or less, for
failure to file correct information returns:
ScenarioPenalty Per Return Calendar Year Maximum
General Rule (§ 6721(d)(1)(A))$310$1,261,000
Corrected on or before 30 days after required filing date (§ 6721(d)(1)(B))$60$220,500
Corrected after 30
th
day but on or before August 1, 2024 (§ 6721(d)(1)(C))$120$630,500
(3) for failure to file correct informa-
tion returns due to intentional disregard
of the filing requirement (or the correct
information reporting requirement):
ScenarioPenalty Per Return Calendar Year
Maximum
Return other than a return required to be filed under
§§ 6045(a), 6041A(b), 6050H, 6050I, 6050J, 6050K, or
6050L (§ 6721(e)(2)(A))
Greater of (i) $630, or (ii) 10% of aggregate
amount of items required to be reported
correctly
No limit
Return required to be filed under §§ 6045(a), 6050K, or
6050L (§ 6721(e)(2)(B))
Greater of (i) $630, or (ii) 5% of aggregate
amount of items required to be reported
correctly
No limit
Return required to be filed under § 6050I(a) (§ 6721(e)(2)(C))Greater of (i) $31,520, or (ii) amount of cash
received up to $126,000
No limit
Return required to be filed under § 6050V (§ 6721(e)(2)(D))Greater of (i) $630, or (ii) 10% of the value
of the benefit of any contract with respect to
which information is required to be included on
the return
No limit
.58 Failure to Furnish Correct Payee
Statements. In the case of any failure relat-
ing to a statement required to be furnished
in 2024, the penalty amounts under § 6722
are:
(1) for persons with average annual
gross receipts for the most recent three
taxable years of more than $5,000,000,
for failure to furnish correct payee
statements:
ScenarioPenalty Per StatementCalendar Year
Maximum
General Rule (§ 6722(a)(1))$310$3,783,000
Corrected on or before 30 days after required furnishing date (§ 6722(b)(1))$60$630,500
Corrected after 30th day but on or before August 1, 2024 (§ 6722(b)(2))$120$1,891,500

November 7, 2022 456 Bulletin No. 2022–45
(2) for persons with average annual
gross receipts for the most recent 3 taxable
years of $5,000,000 or less, for failure to
furnish correct payee statements:
ScenarioPenalty Per StatementCalendar Year Maximum
General Rule (§ 6722(d)(1)(A))$310$1,261,000
Corrected on or before 30 days after required furnishing date (§ 6722(d)(1)(B))$60$220,500
Corrected after 30
th
day but on or before August 1, 2024 (§ 6722(d)(1)(C))$120$630,500
(3) for failure to furnish correct payee
statements due to intentional disregard
of the requirement to furnish a payee
statement (or the correct information
reporting requirement):
ScenarioPenalty Per StatementCalendar Year
Maximum
Payee statement other than a statement required under §§ 6045(b),
6041A(e) (in respect of a return required under § 6041A(b)),
6050H(d), 6050J(e), 6050K(b), or 6050L(c) (§ 6722(e)(2)(A))
Greater of (i) $630, or (ii) 10% of
aggregate amount of items required to be
reported correctly
No limit
Payee statement required under §§ 6045(b), 6050K(b), or
6050L(c) (§ 6722(e)(2)(B))
Greater of (i) $630, or (ii) 5% of aggregate
amount of items required to be reported
correctly
No limit
.59 Revocation or Denial of Passport
in Case of Certain Tax Delinquencies.
For calendar year 2023, the amount of a
serious delinquent tax debt under § 7345
is $59,000.
.60 Attorney Fee Awards. For fees
incurred in calendar year 2023, the attor-
ney fee award limitation under § 7430(c)
(1)(B)(iii) is $230 per hour.
.61 Periodic Payments Received Under
Qualified Long-Term Care Insurance
Contracts or Under Certain Life Insur-
ance Contracts. For calendar year 2023,
the stated dollar amount of the per diem
limitation under § 7702B(d)(4), regarding
periodic payments received under a qual-
ified long-term care insurance contract or
periodic payments received under a life
insurance contract that are treated as paid
by reason of the death of a chronically ill
individual, is $420.
.62 Qualified Small Employer Health
Reimbursement Arrangement. For tax-
able years beginning in 2023, to qualify
as a qualified small employer health reim-
bursement arrangement under § 9831(d),
the arrangement must provide that the total
amount of payments and reimbursements
for any year cannot exceed $5,850
($11,800 for family coverage).
SECTION 4. EFFECTIVE DATE
.01 General Rule. Except as provided
in section 4.02 of this revenue procedure,
this revenue procedure applies to taxable
years beginning in 2023.
.02 Calendar Year Rule. This reve-
nue procedure applies to transactions or
events occurring in calendar year 2023
for purposes of sections 3.08 (rehabil-
itation expenditures treated as separate
new building), 3.09 (low-income hous-
ing credit), 3.14 (transportation mainline
pipeline construction industry optional
expense substantiation rules for payments
to employees under accountable plans),
3.20 (private activity bonds volume cap),
3.21 (loan limits on agricultural bonds),
3.22 (general arbitrage rebate rules), 3.23
(safe harbor rules for broker commis-
sions on guaranteed investment contracts
or investments purchased for a yield
restricted defeasance escrow), 3.37 (expa-
triation to avoid taxes), 3.40 (debt instru-
ments arising out of sales or exchanges),
3.41 (unified credit against estate tax),
3.42 (valuation of qualified real property
in decedent’s gross estate), 3.43 (annual
exclusion for gifts), 3.44 (tax on arrow
shafts), 3.45 (passenger air transportation
excise tax), 3.48 (persons against whom a
federal tax lien is not valid), 3.49 (prop-
erty exempt from levy), 3.51 (interest on a
certain portion of the estate tax payable in
installments), 3.59 (revocation or denial of
passport in case of certain tax delinquen-
cies), 3.60 (attorney fee awards), and 3.61
(periodic payments received under quali-
fied long-term care insurance contracts or
under certain life insurance contracts) of
this revenue procedure.
SECTION 5. DRAFTING
INFORMATION
The principal author of this revenue
procedure is William Ruane of the Office
of Associate Chief Counsel (Income Tax
& Accounting). For further information
regarding this revenue procedure, contact
Mr. Ruane at (202) 317-4718 (not a toll-
free number) or Kyle Walker at (202) 317-
5394 (not a toll-free number).

Bulletin No. 2022–45 457 November 7, 2022
Part IV
Notice of Proposed
Rulemaking
User Fees Relating to
Enrolled Actuaries
REG-100719-21
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking
and notice of public hearing.
SUMMARY: This document contains
proposed amendments to the regulations
relating to imposing user fees for enrolled
actuaries. The proposed regulations
increase both the enrollment and renewal
of enrollment user fees for enrolled actu-
aries from $250.00 to $680.00. The pro-
posed regulations affect individuals who
apply to become an enrolled actuary or
seek to renew their enrollment. The Inde-
pendent Offices Appropriation Act of
1952 authorizes charging user fees.
DATES: Electronic or written comments
must be received by December 19, 2022.
The public hearing is being held by tele-
conference on January 9, 2023 at 10 a.m.
EST. Requests to speak and outlines
of topics to be discussed at the public
hearing must be received by December
19, 2022. If no outlines are received by
December 19, 2022, the public hearing
will be cancelled. Requests to attend the
public hearing must be received by 5:00
p.m. EST on January 5, 2023. The tele-
phonic hearing will be made accessible
to people with disabilities. Requests for
special assistance during the telephonic
hearing must be received by January 4,
2023.
ADDRESSES: Commenters are strongly
encouraged to submit public comments
electronically. Submit electronic submis-
sions via the Federal eRulemaking Portal
at www.regulations.gov (indicate IRS and
REG-100719-21) by following the online
instructions for submitting comments.
Once submitted to the Federal eRulemak-
ing Portal, comments cannot be edited
or withdrawn. Send paper submissions
to: CC:PA:LPD:PR (REG-100719-21),
Room 5203, Internal Revenue Service,
P.O. Box 7604, Ben Franklin Station,
Washington, D.C. 20044. The IRS will
publish any comments submitted to the
public docket.
For those requesting to speak during
the hearing, send an outline of topic sub-
missions electronically via the Federal
eRulemaking Portal at www.regulations.
gov (indicate IRS and REG-100719-21).
Individuals who want to testify by
telephone at the public hearing must send
an email to publichearings@irs.gov to
receive the telephone number and access
code for the hearing. The subject line
of the email must contain the regulation
number REG-100719-21 and the word
TESTIFY. For example, the subject line
may say: Request to TESTIFY at Hearing
for REG-100719-21. The email should
include a copy of the speaker’s public
comments and outline of topics. Individ-
uals who want to attend the public hear-
ing by telephone must also send an email
to publichearings@irs.gov to receive
the telephone number and access code
for the hearing. The subject line of the
email must contain the regulation number
REG-100719-21 and the word ATTEND.
For example, the subject line may say:
Request to ATTEND Hearing for REG-
100719-21. To request special assistance
during the telephonic hearing contact the
Publications and Regulations Branch of
the Office of Associate Chief Counsel
(Procedure and Administration) by send-
ing an email to publichearings@irs.gov
(preferred) or by telephone at (202) 317-
5177 (not a toll-free number).
FOR FURTHER INFORMATION CON-
TACT: Concerning the proposed regula-
tions, Carolyn M. Lee at (202) 317-6845;
concerning cost methodology, Michael
A. Weber at (202) 803-9738; concerning
submission of comments, the hearing, and
the access code to attend the hearing by
telephone, Regina Johnson at (202) 317-
5177 (not toll-free numbers), or publi-
chearings@irs.gov.
SUPPLEMENTARY INFORMATION:
Background and Explanation of
Provisions
This document contains proposed
amendments to 26 CFR part 300 regard-
ing user fees.
Regulations establish certain require-
ments for individuals who seek to provide
actuarial services under the Employee
Retirement Income Security Act of 1974
(ERISA) Pub. L. 93-406, Title III, § 3042,
Sept. 2, 1974, 88 Stat. 1002. To account
for its costs of providing enrolled actuary
enrollment and renewal of enrollment ser-
vices, the IRS charges a user fee to apply
for enrollment or renew enrollment as
an enrolled actuary. This proposal would
increase the amount of the user fee from
$250.00 per enrollment application or
renewal application to $680.00 per enroll-
ment application or renewal application.
A. Enrolled Actuaries
ERISA directed the Secretary of Labor
and the Secretary of the Treasury to estab-
lish a Joint Board for the Enrollment of
Actuaries (Joint Board). 29 U.S.C. 1241.
The Joint Board consists of three members
and one alternate member appointed by the
Secretary of the Treasury, two members
and one alternate member appointed by
the Secretary of Labor, and one non-voting
representative designated by the Director
of the Pension Benefit Guaranty Corpora-
tion. Pursuant to the Joint Board’s bylaws,
the Secretary of the Treasury appoints an
Executive Director who has the delegated
authority to administer the Joint Board’s
enrollment and renewal of enrollment
processes. The Secretary of the Treasury
delegated these functions to the IRS and
the costs of these activities are borne by
the IRS. The Executive Director, an IRS
Return Preparer Office (RPO) employee,
administers the enrollment and renewal of
enrollment processes for the Joint Board.
Pursuant to 29 U.S.C. 1242(a), the
Joint Board establishes reasonable stan-
dards and qualifications for persons per-
forming actuarial services and is empow-
ered to enroll such individuals who, upon

November 7, 2022 458 Bulletin No. 2022–45
application, satisfy these standards and
qualifications. The regulations at 20 CFR
Part 901, Subpart B prescribe eligibility
requirements for enrollment and renewal
of enrollment. An enrolled actuary is any
individual who has satisfied the standards
and qualifications as set forth in the reg-
ulations of the Joint Board and who has
been approved by the Joint Board to per-
form actuarial services required under
ERISA.
Before conferring status as an enrolled
actuary to an individual, the Joint Board
must verify the individual fulfills certain
requirements related to experience, basic
actuarial knowledge, and pension actu-
arial knowledge. 20 CFR §901.12(a).
The RPO Joint Board staff oversees this
verification as part of its responsibility
to administer the enrollment application
and renewal application processes for the
Joint Board. An applicant may be denied
enrollment for disreputable conduct (20
CFR §901.12(f)(1)), conviction of speci-
fied offenses (20 CFR §901.12(f)(2)), sub-
mitting false or misleading information
on the enrollment application (20 CFR
§901.12(f)(3)), or knowingly submitting
false or misleading information on any
report presenting actuarial information
to any person (id.). An individual apply-
ing for enrollment as an enrolled actuary
must submit a Form 5434, Joint Board
for the Enrollment of Actuaries – Appli-
cation for Enrollment, and pay the current
non-refundable $250.00 user fee. 20 CFR
§901.10(a).
Enrollment is for a three-year term. 20
CFR §901.1(k). Before the Joint Board
will renew an actuary’s enrollment, the
enrolled actuary must certify he or she has
satisfied continuing professional educa-
tion (CPE) requirements as prescribed by
the regulations of the Joint Board, includ-
ing a minimum of 36 (thirty-six) hours of
CPE in prescribed core and non-core sub-
ject matter courses during the three-year
enrollment cycle. 20 CFR §901.11(e).
Core subject matter is program content
and knowledge integral and necessary to
the satisfactory performance of pension
actuarial services and actuarial certifica-
tions under ERISA and the Internal Reve-
nue Code, and includes content concern-
ing the ethical standards of performance
for actuarial services. 20 CFR §901.11(f)
(1)(i). An individual applying to renew
enrollment as an enrolled actuary must
submit a Form 5434-A, Joint Board for
the Enrollment of Actuaries – Applica-
tion for Renewal of Enrollment, and pay
the current non-refundable $250.00 user
fee. 20 CFR §901.11(d). The RPO Joint
Board staff verifies the enrolled actuary’s
certification as part of its responsibilities
to administer the enrollment and renewal
of enrollment processes for the Joint
Board.
Section 330 of Title 31 of the United
States Code authorizes the Secretary of
the Treasury to regulate the practice of
representatives before the Department
of the Treasury (Treasury Department)
and requires that an individual seeking to
practice demonstrate necessary qualifi-
cations, competency, and good character
and reputation. The rules governing prac-
tice before the IRS are published in 31
CFR, Subtitle A, part 10, and reprinted
as Treasury Department Circular No. 230
(Circular 230). Under section 10.3(d)(1)
of Circular 230, any individual who is
enrolled as an actuary by the Joint Board
and who is not currently under suspen-
sion or disbarment from practice before
the IRS may practice before the IRS. Sec-
tion 10.3(d)(2) provides that an enrolled
actuary’s authority to practice before the
IRS is limited to matters involving cer-
tain provisions of the Internal Revenue
Code.
B. User Fee Authority
The Independent Offices Appropri-
ation Act of 1952 (IOAA) (31 U.S.C.
9701) authorizes each agency to pro-
mulgate regulations establishing the
charge for services the agency provides
(user fees). The IOAA states that the ser-
vices provided by an agency should be
self-sustaining to the extent possible. 31
U.S.C. 9701(a). The IOAA provides that
user fee regulations are subject to poli-
cies prescribed by the President. The pol-
icies are currently set forth in the Office
of Management and Budget (OMB) Cir-
cular A-25 (OMB Circular A-25), 58 FR
38142 (July 15, 1993).
Section 6a(1) of OMB Circular A-25
states that when a service offered by an
agency confers special benefits to iden-
tifiable recipients beyond those accruing
to the general public, the agency is to
charge a user fee to recover the full cost
of providing the service. Section 8e of
OMB Circular A-25 requires agencies to
review user fees biennially and update the
fees as necessary to reflect changes in the
cost of providing the underlying services.
During the biennial review, an agency
must calculate the full cost of providing
each service, taking into account all direct
and indirect costs to any part of the U.S.
government. Under section 6d(1) of OMB
Circular A-25, the full cost of providing
a service includes, but is not limited to,
an appropriate share of salaries, medical
insurance and retirement benefits, man-
agement costs, and physical overhead, and
other indirect costs, including rents, utili-
ties, and travel associated with providing
the service.
An agency should set the user fee at
an amount that recovers the full cost of
providing the service unless the agency
requests, and the OMB grants, an excep-
tion to the full-cost requirement. Under
section 6c(2) of OMB Circular A-25, the
OMB may grant exceptions when the
cost of collecting the fees would repre-
sent an unduly large part of the fee for
the activity or when any other condition
exists that, in the opinion of the agency
head, justifies an exception. When the
OMB grants an exception, the agency
does not collect the full cost of providing
the service and must fund the remaining
cost of providing the service from other
available funding sources. Consequently,
the agency subsidizes the cost of the ser-
vice to the recipients of reduced-fee ser-
vices even though the service confers a
special benefit on those recipients who
would otherwise be required to pay the
full cost of providing the service as pro-
vided for by the IOAA and OMB Circu-
lar A-25.
C. Enrolled Actuary User Fee
An individual who has been granted
new enrollment or renewal of enrollment
as an enrolled actuary by the Joint Board
may perform actuarial services under
ERISA and practice before the IRS as
provided by section 10.3(d) of Circular
230. The enrollment confers benefits on
individuals who are enrolled actuaries
beyond those that accrue to the general
public. Because these are specific benefits

Bulletin No. 2022–45 459 November 7, 2022
not available to the general public, the
IRS charges a user fee to recover the full
cost associated with the administration of
the enrollment and renewal of enrollment
processes.
Final regulations (TD 9370) pub-
lished in the Federal Register (72 FR
72606-01) on December 21, 2007, estab-
lished the current $250.00 user fee for
the enrollment application and renewal
of enrollment application processes for
enrolled actuaries. At that time, the Trea-
sury Department and the IRS determined
that a $250.00 user fee per application to
enroll or renew enrollment as an enrolled
actuary would recover the full direct and
indirect costs the government would incur
to administer the enrollment and renewal
of enrollment processes.
As required by OMB Circular A-25, the
IRS has conducted biennial reviewof this
user fee since it was established by regula-
tion in 2007. These reviews either resulted
in a user fee calculation of approximately
$250.00 or otherwise did not result in the
Treasury Department and the IRS increas-
ing the fee. In 2021 the IRS conducted a
biennial review and calculated its costs
associated with administering the enrolled
actuary enrollment and renewal of enroll-
ment processes. As discussed in Section
D of this preamble, during the review, the
IRS took into account increases in labor,
benefits, and overhead costs incurred in
connection with providing services to
individuals who enroll or renew enroll-
ment as enrolled actuaries since the user
fee was promulgated in 2007. The costs
include activities related to verifying that
an individual meets the requirements for
enrollment or renewal of enrollment as an
enrolled actuary. The RPO also took into
account a re-allocation of certain labor
costs in their methodology to include
costs associated with certain human cap-
ital matters, formalizing policies and pro-
cedures, and other administrative support.
The number of employees, the percentage
allocation of time spent by employees per-
forming activities directly related to the
enrollment or renewal of enrollment pro-
cesses, and the associated oversight and
support labor costs were increased from
those costs underlying the current $250.00
user fee.
The costs to the RPO Joint Board
staff of performing enrollment and
renewal of enrollment processes are the
same. The IRS determined that the full
cost of administering the enrollment
and renewal of enrollment processes
increased from $250.00 to $680.00
per enrollment or renewal of enroll-
ment. The proposed fee is an increase
of $143.33 per year for the three-year
enrollment period.
D. Calculation of User Fees Generally
The IRS follows generally accepted
accounting principles (GAAP) in calcu-
lating the full cost of administering the
enrolled actuary enrollment and renewal
of enrollment processes. The Federal
Accounting Standards Advisory Board
(FASAB) is the body that establishes
GAAP that apply for Federal reporting
entities, such as the IRS. FASAB pub-
lishes the FASAB Handbook of Fed-
eral Accounting Standards and Other
Pronouncements, as Amended (Cur-
rent Handbook), which is available at
https://files.fasab.gov/pdffiles/2022_%20
FASAB_%20Handbook.pdf. The Cur-
rent Handbook includes the Statement of
Federal Financial Accounting Standards
(SFFAS) 4: Managerial Cost Accounting
Standards and Concepts.
SFFAS 4 establishes internal costing
standards under GAAP to accurately mea-
sure and manage the full cost of Federal
programs, and the methodology below is
in accordance with SFFAS 4.
1. Cost Center Allocation
The IRS determines the cost of its
services and the activities involved in
providing them through a cost account-
ing system that tracks costs to organiza-
tional units. The lowest organizational
unit in the IRS’s cost accounting system
is a cost center. Cost centers are usually
separate offices that are distinguished by
subject-matter area of responsibility or
geographic region. All costs of operating
a cost center are recorded in the IRS’s cost
accounting system. The costs charged to a
cost center are the direct costs for the cost
center’s activities in addition to allocated
overhead. Some cost centers work on dif-
ferent services across the IRS and are not
fully dedicated to the services for which
the IRS charges user fees.
2. Cost Estimation of Direct Costs
The IRS uses various cost measurement
techniques to estimate the costs attribut-
able to the enrolled actuary enrollment and
renewal of enrollment processes. These
techniques include using various timekeep-
ing systems to measure the time required to
accomplish activities, or using information
provided by subject matter experts on the
time devoted to a program. To determine
the labor and benefits costs incurred to
provide the service of enrolling actuaries,
the IRS estimated the number of full-time
employees required to conduct activities
related to administering the enrollment and
renewal of enrollment processes. The num-
ber of full-time employees is based on both
current employment numbers and future
hiring estimates. Other direct costs associ-
ated with administering the enrollment and
renewal of enrollment processes include
travel, training, and supplies.
3. Overhead
When the indirect cost of a service or
activity is not specifically identified from
the cost accounting system, an overhead
rate is added to the identifiable direct
cost to arrive at full cost. Overhead is the
indirect cost of operating an organization
that is not specifically identifiable with a
single activity. Overhead includes costs
of resources that are jointly or commonly
consumed by one or more organizational
unit’s activities but are not specifically
identifiable to a single activity.
These costs can include:
• General management and administra-
tive services of sustaining and sup-
porting organizations.
• Facilities management and ground
maintenance services (security, rent,
utilities, and building maintenance).
• Procurement and contracting services.
• Financial management and account-
ing services.
• Information technology services.
• Services to acquire and operate prop-
erty, plants, and equipment.
• Publication, reproduction, graphics
and video services.
• Research, analytical, and statistical
services.
• Human resources/personnel services.
• Library and legal services.

November 7, 2022 460 Bulletin No. 2022–45
To calculate the overhead allocable
to a specific service, the IRS multiplies
an overhead rate by the estimated direct
costs of the service. The IRS calculates
the overhead rate annually based on the
Statement of Net Cost included in the IRS
annual financial statements. The financial
statements are audited by the Government
Accountability Office. The overhead rate
is the ratio of the IRS’s indirect costs
divided by direct costs of its organiza-
tional units. Indirect costs are labor, ben-
efits, and non-labor costs (excluding IT
related to taxpayer services, enforcement,
and business system modernization) from
the supporting and sustaining organiza-
tional units. Direct costs are labor, ben-
efits, and non-labor costs for the IRS’s
organizational units that interact directly
with taxpayers.
For the enrolled actuary user fee
review, an overhead rate of 58.83 percent
was used. The rate was calculated based
on the Fiscal Year (FY) 2020 Statement of
Net Cost as follows:
Total Indirect Costs $4,274,512,375
Total Direct Costs $7,265,460,800
Overhead Rate 58.83%
E. Calculation of Enrolled Actuary
Enrollment and Renewal of Enrollment
User Fees
1. Cost Estimate
The IRS projected the estimated costs
of direct labor and benefits based on the
actual salary and benefits of employees
who devote time to conducting enrolled
actuary enrollment and renewal of enroll-
ment processes, reduced to reflect the per-
centage of time each individual spends
on those activities. The RPO’s managers
estimated the percentage of time these
employees devote to conducting enrolled
actuary enrollment and renewal of enroll-
ment activities based on their knowledge
of actual program assignments. Four
employees devote an average of sixty-five
percent of their time over the three-year
enrollment cycle to enrolled actuary
enrollment or renewal of enrollment activ-
ities. Prior biennial review costing analy-
ses had understated the cost by only taking
into account an average of forty percent of
their time to enrolled actuary enrollment
or renewal of enrollment activities. Addi-
tional staffing costs include oversight and
support associated with these functions.
The baseline for the labor and benefits
estimate was the actual salary and bene-
fits for FY 2021. From this baseline, the
IRS estimated the direct labor and benefits
costs over the next three years using an
inflation factor for FYs 2022, 2023, and
2024. The IRS used a three-year projec-
tion because the increase in future labor
and benefits costs are reliably predictable
representations of the actual costs that will
be incurred by the RPO. These estimated
direct labor and benefits costs were then
reduced to reflect the percentage of time
each individual devoted to enrolled actu-
ary enrollment and renewal of enrollment
activities and are set out in the following
table:
YearEstimated costs for
direct labor and benefits
2022$546,457
2023$557,659
2024$569,101
Total$1,673,217
In addition, the IRS estimated $3,500
in direct costs for each year for travel,
training, and supplies, or $10,500 total in
this category for the three-year projection.
The total estimated direct costs for the
three years is $1,683,717. After estimating
the total direct costs, the IRS applied the
FY 2021 overhead rate of 58.83 percent
to the estimated direct costs to calculate
indirect costs of $990,531, for a total cost
for the three-year period of $2,674,248.
The calculation of the total cost of the
enrolled actuary enrollment and renewal
of enrollment program for 2022 through
2024 is shown below:
Direct Costs $1,683,717
Overhead at 58.83% + $990,531
Total Costs $2,674,248
2. Volume of Applications
The number of applicants during FYs
2018, 2019, and 2020 were 214, 132, and
3,584, respectively. The higher number
of applicants in 2020 follows the his-
torical norm of most renewals of enroll-
ment occurring every third year. The total
number of applications for the three years
was 3,930. The IRS used this historical
three-year volume to estimate the num-
ber of applicants for FYs 2022, 2023, and
2024.
3. Unit Cost per Application
To arrive at the total cost per applica-
tion, the IRS divided the estimated three-
year total of enrolled actuaries costs by the
total volume of applications expected over
the same three-year period to determine a
per-application cost of $680.00, as shown
below:
Total Costs $2,674,248
Number of Applications ÷ 3,930
Cost per Application $680
Special Analyses
I. Regulatory Planning and Review
These regulations are not significant
and are not subject to review under section
6(b) of Executive Order 12866 pursuant to
the Memorandum of Agreement (April 11,
2018) between the Treasury Department
and the Office of Management and Budget
regarding review of tax regulations.
II. Initial Regulatory Flexibility Analysis
When an agency issues a rulemaking
proposal, the Regulatory Flexibility Act
(5 U.S.C. chapter 6), (RFA) requires the
agency “to prepare and make available
for public comment an initial regulatory
flexibility analysis” that will “describe
the impact of the proposed rule on small
entities.” See 5 U.S.C. 603(a). Section
605 of the RFA provides an exception
to the requirement if the agency certi-
fies that the proposed rulemaking will
not have a significant economic impact
on a substantial number of small enti-
ties. A small entity is defined as a small
business, small nonprofit organization, or
small governmental jurisdiction. See 5
U.S.C. 601(3) through (6). The Treasury
Department and the IRS conclude that
the proposed regulations, if promulgated,
may have a significant economic impact
on a substantial number of small entities.
As a result, an initial regulatory flexibil-
ity analysis is required.

Bulletin No. 2022–45 461 November 7, 2022
Description of the reasons why action
by the agency is being considered.
The change in enrolled actuary user
fees is being considered in compliance
with Section 6a(1) of OMB Circular A-25,
which states that when a service offered
by an agency confers special benefits to
identifiable recipients beyond those accru-
ing to the general public, the agency is to
charge a user fee to recover the full cost
of providing the service. Enrollment as an
enrolled actuary confers special benefits to
identifiable recipients; such “identifiable
recipients” are new and renewing enrolled
actuaries authorized to provide pension
actuarial services and actuarial calculations
under ERISA and the Internal Revenue
Code. The IRS incurs costs associated with
enrollment and renewal of enrollment ver-
ification and approval processes. The Trea-
sury Department and the IRS previously
determined that the full cost to the IRS of
the enrollment and renewal of enrollment
processes was $250.00 for each enrollment
and each renewal of enrollment. In accor-
dance with OMB Circular A-25, the Trea-
sury Department and the IRS conducted a
biennial review of the enrolled actuary user
fee amount in 2021 and determined that the
full cost to the IRS of the enrollment and
renewal of enrollment processes for each
enrolled actuary candidate is $680.00 per
enrollment and renewal of enrollment, an
increase of $143.33 per year for the three-
year enrollment period.
Succinct statement of the objectives of,
and the legal basis for, the proposed
rule.
The objective of the proposed regula-
tions is to recover the costs to the gov-
ernment associated with providing the
services conferring the special benefit
that accrues to an individual whom the
Joint Board enrolls as a new or renewing
enrolled actuary. When performing its
duties, the RPO Joint Board staff conducts
enrollment and renewal of enrollment pro-
cesses including verifying that the individ-
ual applying for new or renewed enrolled
actuary status fulfills certain requirements
related to experience, basic actuarial
knowledge, and pension actuarial knowl-
edge. In addition, with respect to an indi-
vidual seeking to renew as an enrolled
actuary, the RPO Joint Board staff must
verify that the renewing enrolled actuary
properly certified that he or she satisfied
continuing professional education (CPE)
requirements as prescribed by the regula-
tions of the Joint Board. Section 6a(1) of
OMB Circular A-25 states that when a ser-
vice offered by an agency confers special
benefits to identifiable recipients beyond
those accruing to the general public, the
agency is to charge a user fee to recover
the full cost of providing the service. An
individual who is enrolled as an actuary
by the Joint Board is conferred the spe-
cial benefits of being authorized to per-
form actuarial services under ERISA and
to practice before the IRS as provided by
section 10.3(d) of Circular 230. These
benefits are not available to the general
public.
The legal basis for the fee for initial
enrollment and the fee for renewal of
enrollment as an enrolled actuary with the
Joint Board is section 9701 of title 31.
Description of and, where feasible, an
estimate of the number of small entities
to which the proposed rule will apply.
The proposed regulations affect actu-
aries who apply for enrollment as an
enrolled actuary or renewal of enrollment
with the Joint Board. Only individuals, not
businesses, can apply for new enrollment
or to renew enrolled actuary certification.
Therefore, the economic impact of these
regulations on any small entity generally
will be the result of an individual actuary
owning a small business, or a small busi-
ness employing an actuary and requiring
the individual to apply for enrolled actu-
ary status or renew as an enrolled actuary
with the Joint Board. An estimate of the
number of small entities to which the pro-
posed rule will apply is not available.
The appropriate NAICS codes for
enrolled actuaries are those that relate to
the performance of pension actuarial ser-
vices and actuarial certifications under
ERISA and the Internal Revenue Code:
NAICS code 524298, other insurance
related activities; NAICS code 525110,
employee benefit plans, retirement plans,
pension funds and plans; and NAICS
code 541611, administrative management
and general management consulting ser-
vices. The Small Business Administration
establishes size standards for concerns
considered to be small, as provided by
13 CFR 121.201. Pursuant to 13 CFR
121.201, concerns within NAICS 524298
are considered to be small if their annual
receipts are less than or equal to $27.0
million; NAICS 525110, $35.0 million;
and NAICS 541611, $21.5 million.
A description of the projected record-
keeping, and other compliance require-
ments of the proposed rule, including
an estimate of the classes of small enti-
ties that will be subject to the require-
ments and the type of professional
skills necessary for preparation of the
report or record.
No reporting or recordkeeping require-
ments are projected to be associated with
the proposed regulations.
Identification, to the extent practicable,
of all relevant Federal rules that may
duplicate, overlap, or conflict with the
proposed rule.
The IRS is not aware of any Federal
rules that duplicate, overlap, or conflict
with the proposed rule.
Description of any significant alterna-
tives to the proposed rule that accom-
plish the stated objectives of applicable
statutes and that minimize any signifi-
cant economic impact of the proposed
rule on small entities, including a dis-
cussion of significant alternatives.

The IOAA authorizes the govern-
ment to charge user fees for agency
services, subject to policies designated
by the President. OMB Circular A-25
implements presidential policies regard-
ing user fees and encourages user fees
when a government agency provides
services that confer a special benefit to
a member of the public. In the IOAA,
Congress has stated a preference that the
costs of providing such services should
be self-sustaining. OMB Circular A-25
expressly states that the agency provid-
ing such services generally must charge
a user fee to recover the full cost of pro-
viding the service.
The IRS, acting through the RPO
Joint Board staff, provides services

November 7, 2022 462 Bulletin No. 2022–45
which confer special benefits to the
enrolled actuaries who will be subject to
these user fees. Individuals who wish to
perform pension actuarial services and
actuarial certifications under ERISA and
the Internal Revenue Code and practice
before the IRS must satisfy the stan-
dards and qualifications as set forth in
the regulations of the Joint Board for
persons performing actuarial services
required under ERISA. Only after the
Joint Board verifies that an individual
satisfied the stated standards and qual-
ifications – either as a new enrolled
actuary applicant or a renewing enrolled
actuary – will the individual be enrolled
as an enrolled actuary. An enrolled actu-
ary must renew his or her certification
every three years to ensure the required
competence and compliance with ethical
standards of performance for actuarial
service.
Due to the costs of administering the
new enrollment and renewal of enrollment
processes, and the expressed preference in
the IOAA that government services con-
ferring special benefits be self-sustaining,
there is no viable alternative to imposing
a user fee.
III. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates
Reform Act of 1995 (UMRA) requires
that agencies assess anticipated costs and
benefits and take certain other actions
before issuing a final rule that includes
any Federal mandate that may result in
expenditures in any one year by a state,
local, or tribal government, in the aggre-
gate, or by the private sector, of $100 mil-
lion in 1995 dollars, updated annually for
inflation. This rule does not include any
Federal mandate that may result in expen-
ditures by state, local, or tribal govern-
ments, or by the private sector in excess of
that threshold.
IV. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency from publishing any
rule that has federalism implications if
the rule either imposes substantial, direct
compliance costs on state and local gov-
ernments, and is not required by statute,
or preempts state law, unless the agency
meets the consultation and funding
requirements of section 6 of the Execu-
tive Order. These proposed regulations do
not have federalism implications and do
not impose substantial direct compliance
costs on state and local governments or
preempt state law within the meaning of
the Executive Order.
Comments and Public Hearing
Before these proposed amendments
to the regulations are adopted as final
regulations, consideration will be given
to comments that are submitted timely
to the IRS as prescribed in the preamble
under the “ADDRESSES” section. The
Treasury Department and the IRS request
comments on all aspects of the proposed
regulations. Any comments submitted will
be made available at www.regulations.gov
and upon request.
A public hearing is being held by tele-
conference on January 9, 2023 beginning
at 10 a.m. EST. The rules of 26 CFR
601.601(a)(3) apply to the hearing. Per-
sons who wish to present oral comments
by telephone at the hearing must sub-
mit electronic or written comments and
an outline of the topics to be addressed
and the time to be devoted to each topic
by December 19, 2022 as prescribed in
the preamble under the “ADDRESSES”
section.
A period of 10 minutes will be allo-
cated to each person for making com-
ments. After the deadline for receiving
outlines has passed, the IRS will prepare
an agenda containing the schedule of
speakers. Copies of the agenda will be
made available at www.regulations.gov,
search IRS and REG-100719-21. Copies
of the agenda will also be available by
emailing a request to publichearings@
irs.gov. Please put “REG-100719-21
Agenda Request” in the subject line of
the email.
Drafting Information
The principal author of these regu-
lations is Carolyn M. Lee, Office of the
Associate Chief Counsel (Procedure and
Administration). Other personnel from
the Treasury Department and the IRS
participated in the development of these
regulations.
List of Subjects in 26 CFR Part 300
Reporting and recordkeeping require-
ments, User fees.
Accordingly, the Treasury Department
and the IRS propose to amend 26 CFR
part 300 as follows:
PART 300 – USER FEES
1. The authority citation for part 300
continues to read as follows:
Authority: 31 U.S.C. 9701.
2. Amend §300.7 by revising para-
graphs (b) and (d) to read as follows:
§300.7 Enrollment of enrolled actuary
fee.
* * * * *
(b) Fee. The fee for initially enroll-
ing as an enrolled actuary with the Joint
Board for the Enrollment of Actuaries is
$680.00.
* * * * *
(d) Applicability date. This section is
applicable beginning [DATE 30 DAYS
AFTER DATE OF PUBLICATION OF
THE FINAL RULE IN THE FEDERAL
REGISTER].
3. Amend §300.8 by revising para-
graphs (b) and (d) to read as follows:
§300.8 Renewal of enrollment of
enrolled actuary fee.
* * * * *
(b) Fee. The fee for renewal of enroll-
ment as an enrolled actuary with the Joint
Board for the Enrollment of Actuaries is
$680.00.
* * * * *
(d) Applicability date. This section is
applicable beginning [DATE 30 DAYS
AFTER DATE OF PUBLICATION OF
THE FINAL RULE IN THE FEDERAL
REGISTER].
Paul J. Mamo,
Assistant Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on Octo-
ber 4, 2022, 8:45 a.m., and published in the issue of
the Federal Register for October 5, 2022, 87 F.R.
60357)

Bulletin No. 2022–45 463 November 7, 2022
Notice of Proposed
Rulemaking
Exclusion From Gross
Income of Previously Taxed
Earnings and Profits, and
Adjustments to Basis of
Stock in Controlled Foreign
Corporations and of Other
Property
REG-121509-00
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Withdrawal of notice of pro-
posed rulemaking.
SUMMARY: This document withdraws a
notice of proposed rulemaking published in
the Federal Register on August 29, 2006.
The notice of proposed rulemaking relates
to the exclusion from gross income of pre-
viously taxed earnings and profits under
section 959 of the Internal Revenue Code
(the “Code”) and related basis adjustments
under section 961 of the Code.
DATES: The proposed regulations are
withdrawn on October 21, 2022.
FOR FURTHER INFORMATION CON-
TACT: Joshua P. Roffenbender, (202)
317-6934, or Chadwick Rowland, (202)
317-6937 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
On August 29, 2006, the Treasury
Department and the IRS issued a notice
of proposed rulemaking relating to the
exclusion from gross income of previ-
ously taxed earnings and profits under
section 959 and related basis adjustments
under section 961 (71 FR 51155), correc-
tions to which were published in the Fed-
eral Register on December 8, 2006 (71
FR 71116) (together, the “2006 proposed
regulations”). On December 14, 2018, the
Treasury Department and the IRS issued
Notice 2019-01 (2019-02 I.R.B. 275),
which announced an intent to withdraw
the 2006 proposed regulations and issue a
new notice of proposed rulemaking under
sections 959 and 961 (the “new proposed
regulations”).
This document withdraws the 2006
proposed regulations. Those proposed
regulations were never finalized, never
went into effect, and did not indicate that
taxpayers could rely on them. Withdraw-
ing the proposed regulations at this point
will help prevent possible abuse or other
misuse of them—such as inappropriate
basis adjustments in certain stock acquisi-
tions to which section 304(a)(1) applies—
while the Treasury Department and the
IRS continue to develop the new proposed
regulations. The IRS may, where appro-
priate, challenge taxpayer positions giving
rise to inappropriate results.
List of Subjects in 26 CFR Part 1
Income Taxes, Reporting and record-
keeping requirements.
Withdrawal of a Notice of Proposed
Rulemaking
Accordingly, under the authority of
26 U.S.C. 7805, the notice of proposed
rulemaking (REG-121509-00) published
in the Federal Register on August 29,
2006 (71 FR 51155), corrections to which
were published in the Federal Register
on December 8, 2006 (71 FR 71116), is
withdrawn.
Douglas W. O’Donnell,
Deputy Commissioner for Services
and Enforcement.
(Filed by the Office of the Federal Register on
T.B.D., and published in the issue of the Federal
Register for T.B.D.)

Bulletin No. 2022–45 i November 7, 2022
Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus,
if an earlier ruling held that a principle
applied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspended is used in rare situations
to show that the previous published rul-
ings will not be applied pending some
future action such as the issuance of new
or amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.
—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

November 7, 2022 ii Bulletin No. 2022–45
Numerical Finding List
1
Bulletin 2022–45
Announcements:
2022-14, 2022-31 I.R.B. 136
2022-15, 2022-31 I.R.B. 136
2022-16, 2022-33 I.R.B. 144
2022-17, 2022-35 I.R.B. 179
2022-18, 2022-36 I.R.B. 190
2022-19, 2022-36 I.R.B. 191
2022-20, 2022-38 I.R.B. 238
Notices:
2022-29, 2022-28 I.R.B. 66
2022-30, 2022-28 I.R.B. 70
2022-31, 2022-29 I.R.B. 85
2022-32, 2022-32 I.R.B. 137
2022-33, 2022-34 I.R.B. 147
2022-34, 2022-34 I.R.B. 150
2022-35, 2022-36 I.R.B. 184
2022-36, 2022-36 I.R.B. 188
2022-37, 2022-37 I.R.B. 234
2022-38, 2022-39 I.R.B. 239
2022-39, 2022-40 I.R.B. 264
2022-40, 2022-40 I.R.B. 266
2022-42, 2022-41 I.R.B. 276
2022-44, 2022-41 I.R.B. 277
2022-43, 2022-42 I.R.B. 303
2022-45, 2022-42 I.R.B. 307
2022-41, 2022-43 I.R.B. 304
2022-46, 2022-43 I.R.B. 306
2022-47, 2022-43 I.R.B. 312
2022-48, 2022-43 I.R.B. 316
2022-49, 2022-43 I.R.B. 321
2022-50, 2022-43 I.R.B. 325
2022-51, 2022-43 I.R.B. 331
2022-52, 2022-43 I.R.B. 337
2022-53, 2022-45 I.R.B. 437
2022-54, 2022-45 I.R.B. 439
2022-55, 2022-45 I.R.B. 443
Proposed Regulations:
REG-130975-08, 2022-28 I.R.B. 71
REG 130675-17, 2022-30 I.R.B. 104
REG-125693-19, 2022-39 I.R.B. 241
REG-110368-22, 2022-44 I.R.B. 405
REG-100719-21, 2022-45 I.R.B. 457
REG-121509-00, 2022-45 I.R.B. 463
Revenue Procedures:
2022-25, 2022-27 I.R.B. 3
2022-28, 2022-27 I.R.B. 65
2022-26, 2022-29 I.R.B. 90
2022-32, 2022-30 I.R.B. 101
Revenue Procedures:—(Continued)
2022-30, 2022-31 I.R.B. 112
2022-29, 2022-33 I.R.B. 141
2022-34, 2022-33 I.R.B. 143
2022-35, 2022-40 I.R.B. 270
2022-36, 2022-40 I.R.B. 274
2022-19, 2022-41 I.R.B. 282
2022-31, 2022-43 I.R.B. 339
2022-37, 2022-43 I.R.B. 377
2022-38, 2022-45 I.R.B. 445
Revenue Rulings:
2022-12, 2022-27 I.R.B. 1
2022-13, 2022-30 I.R.B. 99
2022-14, 2022-31 I.R.B. 110
2022-15, 2022-35 I.R.B. 152
2022-17, 2022-36 I.R.B. 182
2022-18, 2022-40 I.R.B. 262
2022-19, 2022-44 I.R.B. 379
2022-20, 2022-45 I.R.B. 407
Treasury Decisions:
9963, 2022-34 I.R.B. 145
9964, 2022-35 I.R.B. 172
9965, 2022-37 I.R.B. 192
9966, 2022-44 I.R.B. 380
9967, 2022-44 I.R.B. 385
9968, 2022-45 I.R.B. 409
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2021–27 through 2021–52 is in Internal Revenue Bulletin
2021–52, dated December 27, 2021.

Bulletin No. 2022–45 iii November 7, 2022
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2022–45
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2021–27 through 2021–52 is in Internal Revenue Bulletin
2021–52, dated December 27, 2021.

Internal Revenue Service
Washington, DC 20224
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